8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report: June 16, 2006
(Date of earliest event reported)

LIBBEY INC.

(Exact name of registrant as specified in its charter)

Delaware	1-12084	34-1559357
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

300 Madison Avenue
Toledo, Ohio 43604
(Address of principal executive offices, including zip code)

(419) 325-2100
(Registrant’s telephone number, including area code)

          Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.01. Entry into a Material Definitive Agreement.
	Item 2.01. Completion of Acquisition or Disposition of Assets.
	Item 2.03. Creation of a Direct Financial Obligation or an Obligation under Off-Balance Sheet Arrangements of a Registrant.
	Item 3.02. Unregistered Sales of Equity Securities.
	Item 7.01. Regulation FD Disclosure.
	Item 9.01. Exhibits
SIGNATURE
Exhibit Index
Credit Agreement
Indenture
Registration Rights Agreement
Indenture
Form of Warrants
Registration Rights Agreement
Intercreditor Agreement
Transition Services Agreement
Consent of Independent Registered Public Accounting Firm
Text of Press Release dated 6/16/06
Text of Press Release dated 6/21/06
Financial Statements
Unaudited Pro Forma Consolidated and Combined Financial Information

Item 1.01. Entry into a Material Definitive Agreement.

On June 16, 2006, Libbey Inc. (“Libbey”) completed its previously announced acquisition from Vitro, S.A. de C.V. (“Vitro”) of Vitro’s 51% equity interest in Crisa Libbey S.A. de C.V., a Mexican sociedad anónima de capital variable, Vitrocrisa Holding, S. de R.L. de C.V., a Mexican sociedad de responsabilidad limitada de capital variable (limited liability company), Vitrocrisa S. de R.L. de C.V., a Mexican sociedad de responsabilidad limitada de capital variable, Vitrocrisa Comercial, S. de R.L. de C.V., a Mexican sociedad de responsabilidad limitada de capital variable, and Crisa Industrial, L.L.C., a Delaware limited liability company (collectively the “Acquired Companies” or “Crisa”), bringing Libbey’s ownership in Crisa to 100% (the “Crisa Acquisition”). On June 16, 2006, Libbey also completed its previously announced refinancing of substantially all of its existing indebtedness and of Crisa’s existing indebtedness (the “Refinancing”), as described below.

Second Amendment to Crisa Purchase Agreement

On June 16, 2006, Libbey’s wholly-owned subsidiaries Libbey Mexico, S. de R.L. de C.V., a Mexican sociedad de responsabilidad limitada de capital variable, Libbey Europe B.V., a Netherlands besloten vennootschap met beperkte aansprakelijkheid (limited liability company) (“Libbey Europe”), and LGA3 Corp., a Delaware corporation (collectively, the “Purchasers”), entered into a Limited Waiver and Second Amendment (the “Second Amendment”) to the Purchase Agreement, dated April 2, 2006 (as amended, the “Crisa Purchase Agreement”), as amended by the First Amendment to the Crisa Purchase Agreement, dated May 31, 2006, with Vitro, Crisa Corporation, a Delaware corporation (together with Vitro, the “Sellers”), and the Acquired Companies. Libbey joined in the Second Amendment for purposes of guaranteeing obligations of the Purchasers under the Crisa Purchase Agreement.

Pursuant to the Second Amendment, the Sellers agreed, among other things, to (1) waive a closing condition regarding the release of Vitro from certain third-party guarantees of Crisa and, in connection therewith, extend beyond June 16, 2006 the obligations of the Purchasers to terminate certain of Vitro’s guarantees with respect to Crisa’s third-party contractual obligations; and (2) extend the due date for certain intercompany payables owing by Crisa to Vitro from January 15, 2007 to January 15, 2008. In addition, the Purchasers agreed, pursuant to the Second Amendment, that the amount of intercompany payables to be forgiven by Vitro would be reduced from $2,500,000 to $400,000 and that Libbey would guarantee Crisa’s obligations under certain contracts, including the lease agreement relating to a distribution center located on the Plant I Real Property (as defined in the Crisa Purchase Agreement).

Transition Services Agreement

On June 16, 2006, in connection with the closing of the Crisa Acquisition, the Acquired Companies entered into a Transition Services Agreement (the “Transition Services Agreement”) with Vitro, whereby Vitro agreed to provide operations, technology, management and other services to Crisa for up to three years. A copy of the Transition Services Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.

ABL Facility

On June 16, 2006, Libbey Glass Inc., a wholly owned subsidiary of Libbey (“Libbey Glass”), and Libbey Europe, each as a borrower, entered into a Credit Agreement (the “ABL Facility”) for borrowings of up to $150 million, subject to the exercise of a commitment increase feature and certain borrowing base restrictions, with Libbey, as a loan guarantor, the other loan parties party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent with respect to the U.S. Loans, J.P. Morgan Europe Limited, as

Administrative Agent with respect to the Netherlands Loans, LaSalle Bank Midwest National Association, as Syndication Agent, Wells Fargo Foothill, LLC and Fifth Third Bank, as Co-Documentation Agents, and J.P. Morgan Securities Inc., as Sole Bookrunner and Sole Lead Arranger. A copy of the ABL Facility is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated by reference herein.

All borrowings under the ABL Facility are secured by a first priority security interest in (i) substantially all assets of (A) Libbey Glass and (B) substantially all of Libbey Glass’s present and future direct and indirect domestic subsidiaries, (ii) (A) 100% of the stock of Libbey Glass, (B) 100% of the stock of substantially all of Libbey Glass’s present and future direct and indirect domestic subsidiaries, (C) 100% of the non-voting stock of substantially all of Libbey Glass’s first-tier present and future foreign subsidiaries and (D) 65% of the voting stock of substantially all of Libbey Glass’s first-tier present and future foreign subsidiaries, and (iii) substantially all proceeds and products of the property and assets described in clauses (i) and (ii) of this sentence. Additionally, borrowings by Libbey Europe under the ABL Facility are (a) secured by a first priority security interest in (i) substantially all of the assets of Libbey Europe, the parent of Libbey Europe and certain of its subsidiaries, (ii) 100% of the stock of Libbey Europe and certain subsidiaries of Libbey Europe, and (iii) substantially all proceeds and products of the property and assets described in clauses (i) and (ii) of this sentence.

Floating Rate Senior Secured Notes

On June 16, 2006, Libbey Glass closed its previously announced private placement of $306 million aggregate principal amount of floating rate senior secured notes due 2011 (the “Senior Secured Notes”).

The Senior Secured Notes are governed by an Indenture, dated June 16, 2006 (the “Senior Secured Notes Indenture”), between Libbey Glass, Libbey, the Subsidiary Guarantors party thereto and The Bank of New York Trust Company, N.A., as trustee. A copy of the Senior Secured Notes Indenture is filed as Exhibit 4.2 to this Current Report on Form 8-K and is incorporated by reference herein.

Payments under the Senior Secured Notes are secured by a second priority security interest, subject to permitted liens, in the collateral that secures all of the indebtedness of Libbey Glass and Libbey Europe under the ABL Facility. The collateral securing the Senior Secured Notes does not include the assets of Libbey Glass subsidiaries that secure the ABL Facility but are not guarantors under the Senior Secured Notes Indenture.

In connection with the sale of the Senior Secured Notes, Libbey Glass and Libbey entered into a registration rights agreement, dated June 16, 2006 (the “Senior Secured Notes Registration Rights Agreement”), with the subsidiary guarantors under the Senior Secured Notes Indenture and the Initial Purchasers of the Senior Secured Notes. A copy of the Senior Secured Notes Registration Rights Agreement is filed as Exhibit 4.4 to this Current Report on Form 8-K and is incorporated by reference herein.

16% Senior Subordinated Secured Pay-in-Kind Notes and Warrants

On June 16, 2006, Libbey Glass and Libbey closed their previously announced private placement of units consisting of $102 million aggregate principal amount of 16% senior subordinated secured pay-in-kind notes due 2011 (the “PIK Notes”) and detachable warrants to purchase 485,309 shares of Libbey common stock (the “Warrants”). The Warrants are exercisable at a price of $11.248 per share of Libbey common stock. A copy of the Warrant is filed as Exhibit 4.7 to this Current Report on Form 8-K and is incorporated by reference herein.

The PIK Notes are governed by an Indenture, dated June 16, 2006 (the “PIK Indenture”), between Libbey Glass, Libbey, the Subsidiary Guarantors party thereto and Merrill Lynch PCG, Inc (the “Unit Purchaser”). A

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copy of the PIK Indenture is filed as Exhibit 4.5 to this Current Report on Form 8-K and is incorporated by reference herein.

Payments under the PIK Notes are secured by a third priority security interest, subject to permitted liens, in the collateral that secures all of the indebtedness of Libbey Glass and Libbey Europe under the ABL Facility. The collateral securing the PIK Notes does not include the assets of Libbey Glass subsidiaries that secure the ABL Facility but are not guarantors under the PIK Indenture.

In connection with the sale of the Warrants, Libbey entered into a registration rights agreement, dated June 16, 2006 (the “Warrant Registration Rights Agreement”), with the Unit Purchaser. A copy of the Warrant Registration Rights Agreement is filed as Exhibit 4.8 to this Current Report on Form 8-K and is incorporated by reference herein.

Intercreditor Agreement

On June 16, 2006, Libbey Glass entered into an intercreditor agreement (the “Intercreditor Agreement”) with the collateral agent under the ABL Facility, the trustee for the holders of the Senior Secured Notes, the Unit Purchaser and the loan parties party thereto. The Intercreditor Agreement governs the relative priorities (and certain other rights) of the lenders under the ABL Facility, the holders of the Senior Secured Notes and the holders of the PIK Notes in respect of the collateral. A copy of the Intercreditor Agreement is filed as Exhibit 4.9 to this Current Report on Form 8-K and is incorporated by reference herein.

Item 2.01. Completion of Acquisition or Disposition of Assets.

Crisa Acquisition

On June 16, 2006, pursuant to the terms of the Crisa Purchase Agreement, the Purchasers closed the acquisition of the Sellers’ 51% interest in the Acquired Companies. A description of the terms of the Crisa Acquisition, and copies of the Crisa Purchase Agreement and certain ancillary agreements included as exhibits thereto, are described in, and attached as, exhibits to Amendment No. 1 to Libbey’s Current Report on Form 8-K/A filed with the Securities Exchange Commission on April 5, 2006, which is incorporated by reference herein. As a result of the closing of the Crisa Acquisition, Libbey’s indirect ownership interest in the Acquired Companies increased from 49%, which represented a non-controlling share in Crisa, to 100%.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under Off-Balance Sheet Arrangements of a Registrant.

ABL Facility

On June 16, 2006, Libbey Glass and Libbey Europe entered into the previously announced ABL Facility. The information provided in Item 1.01 under “ABL Facility” is incorporated by reference herein.

Floating Rate Senior Secured Notes

On June 16, 2006, Libbey Glass closed its previously announced private placement of the Senior Secured Notes. The information provided in Item 1.01 under “Floating Rate Senior Secured Notes” is incorporated by reference herein.

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16% Senior Subordinated Secured Pay-in-Kind Notes and Warrants

On June 16, 2006, Libbey Glass closed its previously announced private placement of the PIK Notes. The information provided in Item 1.01 under “16% Senior Subordinated Secured Pay-in-Kind Notes and Warrants” is incorporated by reference herein.

Item 3.02. Unregistered Sales of Equity Securities.

16% Senior Subordinated Secured Pay-in-Kind Notes and Warrants

On June 16, 2006, Libbey closed its previously announced private placement of the Warrants. The information provided in Item 1.01 under “16% Senior Subordinated Secured Pay-in-Kind Notes and Warrants” is incorporated by reference herein.

Item 7.01. Regulation FD Disclosure.

In a press release issued on June 16, 2006, Libbey announced the closing of the previously announced private placements of the Senior Secured Notes, the PIK Notes and the Warrants, the entry into the ABL Facility and the closing of the Crisa Acquisition and the Refinancing. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

In a press release issued on June 21, 2006, Libbey announced certain details related to the Crisa Acquisition and the Refinancing, and provided outlook information for the second quarter of Libbey’s fiscal year ended December 31, 2006 and for Libbey’s fiscal year ended December 31, 2007. A copy of the press release is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference herein.

This information is furnished pursuant to Item 7.01 of this Current Report on Form 8-K and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, unless Libbey specifically incorporates it by reference in a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934. By filing this Current Report on Form 8-K and furnishing this information, Libbey makes no admission as to the materiality of any information in this report that is required to be disclosed solely by reason of Regulation FD.

Item 9.01. Exhibits

(a) Financial Statements of Businesses Acquired.

The following financial information of Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries, Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C., (and the accompanying notes) is filed as Exhibit 99.3 to this Current Report on Form 8-K:

• Audited combined balance sheets at December 31, 2005 and unaudited condensed combined balance sheets as of March 31, 2006;

• Audited combined statements of operations for the year ended December 31, 2005 and unaudited condensed combined statements of operations for the three months ended March 31, 2006 and March 31, 2005;

• Audited combined statements of changes in stockholders’ equity for the year ended December 31, 2005; and

4

• Audited combined statements of cash flows for the year ended December 31, 2005 and unaudited condensed combined statements of cash flows for the three month periods ended March 31, 2006 and March 31, 2005.

The independent registered public accounting firm’s report related to the financial information set forth in this Item 9.01(a) is filed as Exhibit 23.1 to this Current Report on Form 8-K.

(b) Pro Forma Financial Information.

The following unaudited pro forma consolidated and combined financial information is filed as Exhibit 99.4 to this Current Report on Form 8-K:

• Unaudited pro forma consolidated and combined balance sheet as of March 31, 2006, giving effect to the Crisa Acquisition and the Refinancing as if they had occurred on March 31, 2006; and

• Unaudited pro forma consolidated and combined statements of operations for the year ended December 31, 2005, the three months ended March 31, 2005 and March 31, 2006 and the twelve months ended March 31, 2006, giving effect to the Crisa Acquisition and the Refinancing as if they had occurred on January 1, 2005.

(d) Exhibits.

4.1	Credit Agreement, dated June 16, 2006, among Libbey Glass Inc. and Libbey Europe B.V., Libbey Inc., the other loan parties party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., J.P. Morgan Europe Limited, LaSalle Bank Midwest National Association, Wells Fargo Foothill, LLC, Fifth Third Bank, and J.P. Morgan Securities Inc., as Sole Bookrunner and Sole Lead Arranger.
4.2	Indenture, dated June 16, 2006, among Libbey Glass Inc., Libbey Inc., the Subsidiary Guarantors party thereto and The Bank of New York Trust Company, N.A., as trustee.
4.3	Form of Floating Rate Senior Secured Note due 2011 (included in Exhibit 4.2).
4.4	Registration Rights Agreement, dated June 16, 2006, among Libbey Glass Inc., Libbey Inc., the Subsidiary Guarantors party thereto and the Initial Purchasers named therein.
4.5	Indenture, dated June 16, 2006, among Libbey Glass Inc., Libbey Inc., the Subsidiary Guarantors party thereto and Merrill Lynch PCG, Inc.
4.6	Form of 16% Senior Subordinated Secured Pay-in-Kind Note due 2011 (included in Exhibit 4.5).
4.7	Warrant, issued June 16, 2006.
4.8	Registration Rights Agreement, dated June 16, 2006, among Libbey Inc. and Merrill Lynch PCG, Inc.
4.9	Intercreditor Agreement, dated June 16, 2006, among Libbey Glass Inc., JPMorgan Chase Bank, N.A., The Bank of New York Trust Company, N.A., Merrill Lynch PCG, Inc. and the Loan Parties party thereto.
10.1	Transition Services Agreement, dated June 16, 2006, among Crisa Libbey S.A. de C.V., Vitrocrisa Holding, S. de R.L. de C.V., Vitrocrisa S. de R.L. de C.V., Vitrocrisa Comercial, S. de R.L. de C.V., Crisa Industrial, L.L.C. and Vitro S.A de C.V.

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23.1	Consent of Independent Registered Public Accounting Firm.
99.1	Text of Press Release dated June 16, 2006.
99.2	Text of Press Release dated June 21, 2006.
99.3	Financial statements of Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries, Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C.
99.4	Unaudited Pro Forma Consolidated and Combined Financial Information.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: June 21, 2006

LIBBEY INC.
By:	/s/ Scott M. Sellick
	Name:	Scott M. Sellick
	Title:	Vice President, Chief Financial Officer (Principal Accounting Officer)

Exhibit Index

Exhibit No.	Description	Page No.
4.1	Credit Agreement, dated June 16, 2006, among Libbey Glass Inc. and Libbey Europe B.V., Libbey Inc., the other loan parties party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., J.P. Morgan Europe Limited, LaSalle Bank Midwest National Association, Wells Fargo Foothill, LLC, Fifth Third Bank, and J.P. Morgan Securities Inc., as Sole Bookrunner and Sole Lead Arranger.
4.2	Indenture, dated June 16, 2006, among Libbey Glass Inc., Libbey Inc., the Subsidiary Guarantors party thereto and The Bank of New York Trust Company, N.A., as trustee.
4.3	Form of Floating Rate Senior Secured Note due 2011 (included in Exhibit 4.2).
4.4	Registration Rights Agreement, dated June 16, 2006, among Libbey Glass Inc., Libbey Inc., the Subsidiary Guarantors party thereto and the Initial Purchasers named therein.
4.5	Indenture, dated June 16, 2006, among Libbey Glass Inc., Libbey Inc., the Subsidiary Guarantors party thereto and Merrill Lynch PCG, Inc.
4.6	Form of 16% Senior Subordinated Secured Pay-in-Kind Note due 2011 (included in Exhibit 4.5).
4.7	Warrant, issued June 16, 2006.
4.8	Registration Rights Agreement, dated June 16, 2006, among Libbey Inc. and Merrill Lynch PCG, Inc.
4.9	Intercreditor Agreement, dated June 16, 2006, among Libbey Glass Inc., JPMorgan Chase Bank, N.A., The Bank of New York Trust Company, N.A., Merrill Lynch PCG, Inc. and the Loan Parties party thereto.
10.1	Transition Services Agreement, dated June 16, 2006, among Crisa Libbey S.A. de C.V., Vitrocrisa Holding, S. de R.L. de C.V., Vitrocrisa S. de R.L. de C.V., Vitrocrisa Comercial, S. de R.L. de C.V., Crisa Industrial, L.L.C. and Vitro S.A de C.V.
23.1	Consent of Independent Registered Public Accounting Firm.
99.1	Text of Press Release dated June 16, 2006.
99.2	Text of Press Release dated June 21, 2006.
99.3	Financial statements of Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries, Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C.
99.4	Unaudited Pro Forma Consolidated and Combined Financial Information.

EX-4.1

EXHIBIT 4.1

EXECUTION COPY

CREDIT AGREEMENT

dated as of

June 16, 2006

among

LIBBEY GLASS INC.

and

LIBBEY EUROPE B.V.,

each as a Borrower,

LIBBEY INC., as a Loan Guarantor,

The Other Loan Parties Party Hereto,

The Lenders Party Hereto

and

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent with respect to the US Loans

J.P. MORGAN EUROPE LIMITED,
as Administrative Agent with respect to the Netherlands Loans

LASALLE BANK MIDWEST NATIONAL ASSOCIATION,
as Syndication Agent

WELLS FARGO FOOTHILL, LLC
FIFTH THIRD BANK
as Co-Documentation Agents

J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Sole Lead Arranger

CHASE BUSINESS CREDIT

TABLE OF CONTENTS

	Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms		1
SECTION 1.02. Classification of Loans and Borrowings		34
SECTION 1.03. Terms of Usage		34
SECTION 1.04. Accounting Terms; GAAP		35
ARTICLE II
The Credits
SECTION 2.01. Commitments		35
SECTION 2.02. Loans and Borrowings		37
SECTION 2.03. Requests for Borrowings		38
SECTION 2.04. Protective Advances		38
SECTION 2.05. Swingline Loans		39
SECTION 2.06. Letters of Credit		41
SECTION 2.07. Funding of Borrowings		45
SECTION 2.08. Interest Elections		45
SECTION 2.09. Reduction or Termination of Commitments		47
SECTION 2.10. Repayment and Amortization of Loans; Evidence of Debt		47
SECTION 2.11. Prepayment of Loans		48
SECTION 2.12. Fees		49
SECTION 2.13. Interest		50
SECTION 2.14. Alternate Rate of Interest		51
SECTION 2.15. Increased Costs		51
SECTION 2.16. Break Funding Payments		52
SECTION 2.17. Taxes		53
SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs		54
SECTION 2.19. Mitigation Obligations; Replacement of Lenders		56
SECTION 2.20. Returned Payments		57
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers		58
SECTION 3.02. Authorization; Enforceability		58
SECTION 3.03. Governmental Approvals; No Conflicts		58
SECTION 3.04. Financial Condition; No Material Adverse Change		58
SECTION 3.05. Properties		59
SECTION 3.06. Litigation and Environmental Matters		59
SECTION 3.07. Compliance with Laws and Agreements		59
SECTION 3.08. Investment Company Status		60
SECTION 3.09. Taxes		60
SECTION 3.10. ERISA		60

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	Page
SECTION 3.11. Disclosure		60
SECTION 3.12. Reserved		60
SECTION 3.13. Solvency		60
SECTION 3.14. Insurance		61
SECTION 3.15. Capitalization and Subsidiaries		61
SECTION 3.16. Security Interest in Collateral		61
SECTION 3.17. Employment Matters		61
SECTION 3.18. Common Enterprise		61
SECTION 3.19. Intellectual Property		62
SECTION 3.20. Federal Regulations		62
SECTION 3.21. Senior Indebtedness		62
ARTICLE IV
Conditions
SECTION 4.01. Effective Date		62
SECTION 4.02. Each Credit Event		66
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements; Borrowing Base and Other Information		67
SECTION 5.02. Notices of Material Events		70
SECTION 5.03. Existence; Conduct of Business		71
SECTION 5.04. Payment of Obligations		71
SECTION 5.05. Maintenance of Properties		71
SECTION 5.06. Books and Records; Inspection Rights		71
SECTION 5.07. Compliance with Laws		72
SECTION 5.08. Use of Proceeds		72
SECTION 5.09. Insurance		72
SECTION 5.10. [Reserved]		72
SECTION 5.11. Appraisals		72
SECTION 5.12. Depository Banks		72
SECTION 5.13. Environmental Laws		72
SECTION 5.14. Additional Collateral; Further Assurances		73
SECTION 5.15. Postclosing Mortgaged Properties		74
SECTION 5.16. Interest Rate Protection		75
SECTION 5.17. Post-Closing Matters		75
SECTION 5.18. USA PATRIOT Act		75
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness		75
SECTION 6.02. Liens		78
SECTION 6.03. Fundamental Changes		79
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions		79
SECTION 6.05. Asset Sales		81
SECTION 6.06. Sale and Leaseback Transactions		82

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	Page
SECTION 6.07. Swap Agreements		82
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness		82
SECTION 6.09. Transactions with Affiliates		83
SECTION 6.10. Restrictive Agreements		83
SECTION 6.11. Amendment of Material Documents		84
SECTION 6.12. Optional Payments and Modifications of Certain Debt Instruments		84
SECTION 6.13. Capital Expenditures		84
SECTION 6.14. Changes in Fiscal Periods		85
SECTION 6.15. Financial Covenants		85
ARTICLE VII
Events of Default
ARTICLE VIII
The Administrative Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices		90
SECTION 9.02. Waivers; Amendments		91
SECTION 9.03. Expenses; Indemnity; Damage Waiver		93
SECTION 9.04. Successors and Assigns		94
SECTION 9.05. Survival		97
SECTION 9.06. Counterparts; Integration; Effectiveness		97
SECTION 9.07. Severability		97
SECTION 9.08. Right of Setoff		98
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process		98
SECTION 9.10. WAIVER OF JURY TRIAL		98
SECTION 9.11. Headings		99
SECTION 9.12. Confidentiality		99
SECTION 9.13. Several Obligations; Nonreliance; Violation of Law		100
SECTION 9.14. USA PATRIOT Act		100
SECTION 9.15. Disclosure		100
SECTION 9.16. Appointment for Perfection		100
SECTION 9.17. Interest Rate Limitation		100
SECTION 9.18. Judgment Currency		100
SECTION 9.19. Netherlands Loans		101
SECTION 9.20. Several Liability of Netherlands Loan Parties		101
SECTION 9.21. Euro Loans		101
ARTICLE X
Loan Guaranty
SECTION 10.01. Guaranty		102
SECTION 10.02. Guaranty of Payment		102
SECTION 10.03. No Discharge or Diminishment of Loan Guaranty		103
SECTION 10.04. Defenses Waived		103

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	Page
SECTION 10.05. Rights of Subrogation		104
SECTION 10.06. Reinstatement; Stay of Acceleration		104
SECTION 10.07. Information		104
SECTION 10.08. Termination		104
SECTION 10.09. Taxes		104
SECTION 10.10. Maximum Liability		104
SECTION 10.11. Contribution		105
SECTION 10.12. Liability Cumulative		106
SECTION 10.13. Effect of Netherlands Civil Code		106
ARTICLE XI
The Borrower Representative
SECTION 11.01. Appointment; Nature of Relationship		106
SECTION 11.02. Powers		106
SECTION 11.03. Employment of Agents		107
SECTION 11.04. Notices		107
SECTION 11.05. Successor Borrower Representative		107
SECTION 11.06. Execution of Loan Documents; Borrowing Base Certificate		107
SECTION 11.07. Reporting		107

SCHEDULES:

Commitment Schedule
Schedule 3.05 — Properties
Schedule 3.06 — Disclosed Matters
Schedule 3.14 — Insurance
Schedule 3.15 — Capitalization and Subsidiaries
Schedule 5.17 — Post-Closing Matters
Schedule 6.01 — Existing Indebtedness
Schedule 6.02 — Existing Liens
Schedule 6.04 — Existing Investments
Schedule 6.10 — Existing Restrictions

EXHIBITS:

Exhibit A — Form of Assignment and Assumption
Exhibit B — [Reserved]
Exhibit C — Form of US Borrowing Base Certificate
Exhibit D — Form of Netherlands Borrowing Base Certificate
Exhibit E — Form of Increasing Lender Supplement
Exhibit F — Form of New Lender Supplement
Exhibit G — Form of Compliance Certificate
Exhibit H — Form of Joinder Agreement
Exhibit I — Form of Aggregate Borrowing Base Certificate
Exhibit J — Form of US Mortgage
Exhibit K — Form of Netherlands Mortgage
Exhibit L — Form of Borrowing Notice
Exhibit M — Form of Affidavit of Payment of Mortgage Recording Taxes

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          CREDIT AGREEMENT dated as of June 16, 2006 (as it may be amended or modified from time to time, this “Agreement”), among LIBBEY GLASS INC. and LIBBEY EUROPE B.V., as Borrowers, LIBBEY INC., as a Loan Guarantor, the other Loan Parties party thereto, the Lenders party hereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, LASALLE BANK MIDWEST NATIONAL ASSOCIATION, as Syndication Agent, and WELLS FARGO FOOTHILL, LLC AND FIFTH THIRD BANK, as Co-Documentation Agents.

          The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

          SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

          “ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

          “Account” has the meaning assigned to such term in the US Security Agreement and, with respect to the Netherlands Loan Parties, “Receivables” as defined in the Deed of Disclosed Pledges of Receivables and Deed of Undisclosed Pledges of Receivables.

          “Account Debtor” means any Person obligated on an Account.

          “Acquisition” means the acquisition by Holdings through its Subsidiaries of the remaining 51% of the capital stock of Vitrocrisa Holdings, S. de R.L. de C.V. and related companies that is not yet owned by Holdings as well as certain assets associated with such related companies from Vitro, S.A. de C.V. and one of its Affiliates pursuant to the Acquisition Agreement.

          “Acquisition Agreement” means the Purchase Agreement dated as of April 2, 2006, and as amended on May 31, 2006 and June 16, 2006, in each case, among Crisa Libbey S.A. de C.V., Vitrocrisa Holding, S. de R.L. de C.V., Vitrocrisa S. de R.L. de C.V., Vitrocrisa Comercial, S. de R.L. de C.V., Crisa Industrial, L.L.C., Libbey Mexico, S. de R.L. de C.V., the Netherlands Borrower, LGA3 Corporation, Vitro, S.A. de C.V. and one of its affiliates.

          “Adjusted LIBO Rate” means, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

          “Administrative Agent” means, in the case of the US Borrower and the US Loans, JPMorgan Chase Bank, N.A., and in the case of the Netherlands Borrower and the Netherlands Loans, J.P. Morgan Europe Limited, each in its capacity as administrative agent for the Lenders hereunder.

          “Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

          “Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

          “Aggregate Availability” means, with respect to all the Borrowers, at any time, an amount equal to the sum of (a) the US Borrower’s Availability and (b) the Netherlands Borrower’s Availability.

          “Aggregate Borrowing Base Certificate” means a certificate, signed and certified as accurate and complete by a Financial Officer of the Borrower Representative, in substantially the form of Exhibit I or another form which is acceptable to the Administrative Agent in its sole discretion.

          “Aggregate Credit Exposure” means, at any time, the aggregate Credit Exposure of all the Lenders.

          “Agreement Currency” has the meaning set forth in Section 9.18(b).

          “Alternate Base Rate” means, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus ¹/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

          “Applicable Percentage” means, with respect to any Lender, at any time, (a) with respect to Revolving Loans, LC Exposure or Swingline Loans, a percentage equal to a fraction the numerator of which is such Lender’s Revolving Commitment then in effect and the denominator of which is the aggregate Revolving Commitment of all Revolving Lenders (if the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon such Lender’s share of the aggregate Revolving Exposures at that time), (b) with respect to Revolving Loans made to the Netherlands Borrower pursuant to the Revolving Netherlands Sublimit, a percentage equal to a fraction the numerator of which is such Lender’s Revolving Netherlands Sublimit then in effect and the denominator of which is the aggregate Revolving Netherlands Sublimit of all Revolving Lenders (if the Revolving Netherlands Sublimit has terminated or expired, the Applicable Percentages shall be determined based upon such Lender’s share of the aggregate Revolving Netherlands Exposures at that time) and (c) with respect to Protective Advances or with respect to the Aggregate Credit Exposure, a percentage based upon its share of the Aggregate Credit Exposure and the unused Commitments.

          “Applicable Rate” means, for any day, with respect to any ABR or Eurocurrency Loan, or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “ABR Spread”, “Eurocurrency Spread” or “Commitment Fee Rate”, as the case may be, based upon the Aggregate Availability as of the most recent determination date, provided that until the delivery to the Administrative Agent, pursuant to Section 5.01, of an Aggregate Borrowing Base Certificate and a Borrowing Base Certificates for each Borrower for the sixth full calendar month ending after the Effective Date, the “Applicable Rate” shall be the applicable rate per annum set forth below in Category 2:

Aggregate	Eurocurrency			ABR			Commitment
Availability	Spread			Spread			Fee Rate
Category 1 ³ $100,000,000		1.50	%		0	%		0.25	%
Category 2 < $100,000,000 but ³ $50,000,000		1.75	%		0	%		0.25	%
Category 3 < $50,000,000		2.00	%		0.25	%		0.25	%

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          For purposes of the foregoing, (a) the Applicable Rate shall be determined as of the end of each fiscal quarter based upon the most recent Aggregate Borrowing Base Certificate and Borrowing Base Certificates delivered pursuant to Section 5.01 and (b) each change in the Applicable Rate resulting from a change in the Aggregate Availability shall be effective during the period commencing on and including the Reset Date immediately succeeding the end of the last month of such fiscal quarter for which the Aggregate Borrowing Base Certificate and Borrowing Base Certificates received indicate such change and ending on the date immediately preceding the effective date of the next such change, provided that the Aggregate Availability shall be deemed to be in Category 3 at the option of the Administrative Agent or at the request of the Required Lenders (a) if the Borrowers fail to deliver the Aggregate Borrowing Base Certificate and Borrowing Base Certificates required to be delivered pursuant to Section 5.01 and (b) such failure shall have continued unremedied for three (3) consecutive days following notice of such actual failure from the Administrative Agent (provided, that no such notice shall be required during the existence of an Event of Default of the type described in paragraphs (h) or (i) in Article VIII), and shall continue to be so deemed in Category 3 during the period from the Reset Date immediately succeeding the end of such fiscal quarter for which such Aggregate Borrowing Base Certificate and Borrowing Base Certificates were required to be delivered until the later of (x) five days after and (y) the Reset Date immediately succeeding, in each case, the date on which such Aggregate Borrowing Base Certificate and Borrowing Base Certificates have been delivered in accordance with Section 5.01 in all respects other than the original due date therefore.

          “Approved Fund” has the meaning assigned to such term in Section 9.04.

          “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent and in the case of such Assignment and Assumption not substantially in the form of Exhibit A, the Borrower Representative.

          “Availability” means at any time, with respect to the US Borrower, U.S. General Availability at such time and, with respect to the Netherlands Borrower, the Netherlands Availability at such time.

          “Available Commitment” means, at any time, the difference of (a) the total Commitments then in effect minus (b) the aggregate (USD Equivalent) amount of the Revolving Exposures of all Revolving Lenders at such time.

          “Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.

          “Banking Services” means each and any of the following bank services provided to any Loan Party by any Lender or any of its Affiliates: (a) commercial credit cards, (b) stored value cards and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts, interstate depository network services and international treasury management services).

          “Banking Services Obligations” with respect to any Loan Party means any and all obligations of such Loan Party, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

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          “Banking Services Reserves” means all Reserves which the Administrative Agent from time to time establishes in its Permitted Discretion for Banking Services then provided or outstanding.

          “Board” means the Board of Governors of the Federal Reserve System of the United States of America.

          “Borrower” or “Borrowers” means, individually or collectively, the US Borrower and the Netherlands Borrower.

          “Borrower Representative” means the US Borrower, in its capacity as contractual representative of the Borrowers pursuant to Article XI.

          “Borrowing” means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurocurrency Loans, as to which a single Interest Period is in effect, (b) a Swingline Loan of the same type and (c) a Protective Advance of the same type.

          “Borrowing Base” means, at any time, with respect to each Borrower, the US Borrowing Base at such time; provided, that with respect to the Netherlands Borrower, “Borrowing Base” in respect of Borrowings pursuant to the Revolving Netherlands Sublimit means the Netherlands Borrowing Base.

          “Borrowing Base Certificate” means, individually or collectively, the US Borrowing Base Certificate and the Netherlands Borrowing Base Certificate.

          “Borrowing Date” means any Business Day specified by a Borrower as a date on which such Borrower requests the relevant Lenders to make Loans hereunder.

          “Borrowing Notice” means a notice substantially in the form of Exhibit L by the Borrower Representative requesting any Revolving Borrowing pursuant to Section 2.03 or such other form satisfactory to the Administrative Agent.

          “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in Chicago (or, with respect to notices in respect of or Borrowings or payments of Loans made to the Netherlands Borrower, London) are authorized or required by law to remain closed; provided that, when used in connection with a Eurocurrency Loan, the term “Business Day” shall also exclude (a) with respect to a Eurocurrency Loan denominated in dollars, any day on which banks are not open for dealings in dollar deposits in the London interbank market and (b) with respect to a Loan denominated in Euros, (i) any day on which banks are not open for dealings in or Euro deposits in the London interbank market and (ii) any day on which the TARGET payment system is not open for the settlement of payment in Euro.

          “Calculation Date”: (a) the last calendar day of each month (or, if such day is not a Business Day, the next succeeding Business Day) and (b) at any time when an Event of Default shall have occurred and be continuing, any other Business Day which the Administrative Agent may determine in its sole discretion to be a Calculation Date.

          “Capital Expenditures” means, without duplication, any cash expenditure for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of Holdings and its Subsidiaries prepared in accordance with GAAP; provided that Capital Expenditures shall exclude (i) the purchase price paid in connection with any acquisition of a Person or of all or substantially all of the assets of any Person or a division of any Person, (ii)

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expenditures made with insurance proceeds and (iii) proceeds of any asset disposition that are reinvested as contemplated in Section 2.11.

          “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

          “Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof but excluding any employee benefit plan of such Person or its subsidiaries), of Equity Interests representing more than 30% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of Holdings; (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of Holdings by Persons who were neither (i) nominated by the board of directors of Holdings nor (ii) appointed by directors so nominated; (c) the acquisition of direct or indirect Control of Holdings by any Person or group; (d) Holdings shall cease to own, free and clear of all Liens or other encumbrances other than Liens created pursuant to the Collateral Documents, directly or indirectly, all of the outstanding voting Equity Interests of each Borrower on a fully diluted basis; or (e) a Specified Change in Control shall occur.

          “Change in Law” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

          “Chase” means JPMorgan Chase Bank, N.A., a national banking association, in its individual capacity, and its successors.

          “Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Swingline Loans or Protective Advances.

          “Code” means the Internal Revenue Code of 1986, as amended from time to time.

          “Co-Documentation Agents” has the meaning assigned to such term in the preamble.

          “Collateral” means, with respect to the US Borrower and the Netherlands Borrower, US Collateral and Netherlands Collateral, respectively. Unless otherwise specified, “Collateral” shall refer to the Collateral with respect to the Borrowers.

          “Collateral Access Agreement” has the meaning assigned to such term in the Security Agreement.

          “Collateral Documents” means, collectively, the US Collateral Documents and the Netherlands Collateral Documents.

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          “Collection Account” has the meaning assigned to the term “Collection Account” in the US Security Agreement.

          “Commitment” means, with respect to each Lender, such Lender’s Revolving Commitment and Revolving Netherlands Sublimit, together with the commitment of such Lender to acquire participations in Protective Advances hereunder. The initial amounts of each Lender’s Commitments are set forth on the Commitment Schedule, as such Commitment Schedule may be amended in connection with a Commitment increase effected in accordance with Section 2.01(c) or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitments, as applicable.

          “Commitment Schedule” means the Schedule attached hereto identified as such.

          “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

          “Credit Exposure” means, as to any Lender at any time, the sum of (a) such Lender’s Revolving Exposure at such time, plus (b) an amount equal to its Applicable Percentage, if any, of the aggregate principal amount of Protective Advances outstanding at such time.

          “Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

          “Deposit Account Control Agreement” has the meaning assigned to such term in the Security Agreement.

          “Disclosed Matters” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.06.

          “Document” has the meaning assigned to such term in the Security Agreements.

          “dollars” or “$” refers to lawful money of the United States of America.

          “EBITDA” means, for any period, Net Income for such period plus (a) without duplication and to the extent deducted in determining Net Income for such period, the sum of (i) Interest Expense for such period, (ii) income Tax expense for such period, (iii) all amounts attributable to depreciation and amortization expense for such period, (iv) any extraordinary or non-recurring non-cash charges for such period and (v) any other non-cash charges for such period, minus (b) without duplication and to the extent included in Net Income, (i) any cash payments made during such period in respect of non-cash charges described in clause (a)(v) taken in a prior period and (ii) any extraordinary gains and any non-cash items of income for such period, all calculated for Holdings and its Subsidiaries on a consolidated basis in accordance with GAAP.

          “Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02) and the initial funding of the Revolving Loans occurs.

          “Eligible Accounts” means, at any time, with respect to each Borrower and any Loan Party, the Accounts of such Borrower or other Loan Party which the Administrative Agent determines in its Permitted Discretion are eligible as the basis for the extension of Revolving Loans, Swingline Loans

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and the issuance of Letters of Credit hereunder. Without limiting the Administrative Agent’s discretion provided herein, Eligible Accounts shall not include any Account:

          (a) which is not subject to a first priority perfected security interest in favor of the Administrative Agent;

          (b) which is subject to any Lien other than (i) a Lien in favor of the Administrative Agent and (ii) a Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent;

          (c) with respect to which (i) the scheduled due date is more than 60 days after the original invoice date, (ii) is unpaid more than 90 days after the date of the original invoice therefor, or (iii) which has been written off the books of such Borrower or Loan Party or otherwise designated as uncollectible; provided, that the aggregate amount of accounts with a scheduled due date of more than 30 days after the original invoice date which remain unpaid after such scheduled due date shall not exceed $1,000,000.

          (d) which is owing by an Account Debtor for which more than 50% of the Accounts owing from such Account Debtor and its Affiliates, other than Accounts arising from customer chargebacks, are ineligible pursuant to clause (c) above;

          (e) which is owing by an Account Debtor to the extent the aggregate amount of Accounts owing from such Account Debtor and its Affiliates to Loan Parties exceeds 20% of the aggregate amount of Eligible Accounts of all Loan Parties;

          (f) with respect to which any covenant, representation, or warranty contained in this Agreement or in the Security Agreement has been materially breached or is not true in any material respect;

          (g) which (i) does not arise from the sale of goods or performance of services in the ordinary course of business, (ii) is not evidenced by an invoice or other documentation satisfactory to the Administrative Agent which has been sent to the Account Debtor, (iii) represents a progress billing, (iv) is contingent upon such Loan Party’s completion of any further performance, (v) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any other repurchase or return basis or (vi) relates to payments of interest;

          (h) for which the goods giving rise to such Account have not been shipped to the Account Debtor or for which the services giving rise to such Account have not been performed by such Loan Party;

          (i) with respect to which any check or other instrument of payment has been returned uncollected for any reason;

          (j) which is owed by an Account Debtor which has currently (i) applied for, suffered, or consented to the appointment of any receiver, custodian, trustee, or liquidator of its assets, (ii) has had possession of all or a material part of its property taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had filed against it, any request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or voluntary or involuntary case under any state or federal bankruptcy laws (other than post-petition accounts payable of an Account Debtor that is a debtor-in-possession under the

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Bankruptcy Code and reasonably acceptable to the Administrative Agent), (iv) has admitted in writing its inability, or is generally unable to, pay its debts as they become due, (v) become insolvent, or (vi) ceased operation of its business;

          (k) which is owed by any Account Debtor which has sold all or a substantially all of its assets;

          (l) which is owed by an Account Debtor which (A) in the case of a US Loan Party, (i) does not maintain its chief executive office in the U.S. or Canada or (ii) is not organized under applicable law of the U.S., any state of the U.S., Canada, or any province of Canada or (B) in the case of a Netherlands Loan Party, (i) does not maintain its chief executive office in The Netherlands or any other Member State of the European Union (as constituted prior to May 1, 2004) satisfactory to the Administrative Agent or is not organized under applicable law of The Netherlands or any other Member State of the European Union (as constituted prior to May 1, 2004) satisfactory to the Administrative Agent unless, in each case, such Account is backed by a Letter of Credit acceptable to the Administrative Agent which is in the possession of, has been assigned to and is directly drawable by the Administrative Agent;

          (m) which is owed in any currency other than U.S. dollars or Euros.

          (n) which is owed by (i) the government (or any department, agency, public corporation, or instrumentality thereof) of any country other than the U.S. unless such Account is backed by a Letter of Credit acceptable to the Administrative Agent which is in the possession of the Administrative Agent, or (ii) the government of the U.S., or any department, agency, public corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other steps necessary to perfect the Lien of the Administrative Agent in such Account have been complied with to the Administrative Agent’s satisfaction;

          (o) which is owed by any Affiliate, employee, officer or director of any Loan Party;

          (p) which, for any Account Debtor, exceeds a credit limit determined by the Administrative Agent, to the extent of such excess;

          (q) which is owed by an Account Debtor or any Affiliate of such Account Debtor to which such Loan Party is indebted, but only to the extent of such indebtedness or is subject to any security, deposit, progress payment, retainage or other similar advance made by or for the benefit of an Account Debtor, in each case to the extent thereof;

          (r) which is subject to any counterclaim, deduction, defense, setoff or dispute but only to the extent of any such counterclaim, deduction, defense, setoff or dispute;

          (s) which is evidenced by any promissory note, chattel paper, or instrument;

          (t) which is owed by an Account Debtor located in any jurisdiction which requires filing of a “Notice of Business Activities Report” or other similar report in order to permit such Loan Party to seek judicial enforcement in such jurisdiction of payment of such Account, unless such Loan Party has filed such report or qualified to do business in such jurisdiction;

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          (u) with respect to which such Loan Party has made any agreement with the Account Debtor for any reduction thereof, other than discounts and adjustments given in the ordinary course of business, or any Account which was partially paid and such Loan Party created a new receivable for the unpaid portion of such Account;

          (v) which does not comply in all material respects with the requirements of all applicable laws and regulations, whether Federal, state or local, including without limitation the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board;

          (w) which is for goods that have been sold under a purchase order or pursuant to the terms of a contract or other agreement or understanding (written or oral) that indicates or purports that any Person other than such Loan Party has or has had an ownership interest in such goods, or which indicates any party other than such Loan Party as payee or remittance party;

          (x) which was created on cash on delivery terms; or

          (y) which the Administrative Agent determines may not be paid by reason of the Account Debtor’s inability to pay or which the Administrative Agent otherwise determines is unacceptable for any reason whatsoever.

          In determining the amount of an Eligible Account, the face amount of an Account may, in the Administrative Agent’s Permitted Discretion, be reduced by, without duplication, to the extent not reflected in such face amount or as otherwise taken into account in clause (p) or (r) above, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that such Loan Party may be obligated to rebate to an Account Debtor pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of such Account but not yet applied by such Loan Party to reduce the amount of such Account.

          “Eligible Equipment” means, with respect to each Borrower and any other Loan Party, the equipment owned by such Borrower or other Loan Party described in the most recent appraisal received by the Administrative Agent in respect of such Loan Party and meeting each of the following requirements:

          (a) such Loan Party has good title to such equipment;

          (b) such Loan Party has the right to subject such equipment to a Lien in favor of the Administrative Agent; such equipment is subject to a first priority perfected Lien in favor of the Administrative Agent and is free and clear of all other Liens of any nature whatsoever (except for Permitted Encumbrances which do not have priority over the Lien in favor of the Administrative Agent);

          (c) the full purchase price for such equipment has been paid by such Loan Party;

          (d) such equipment is located on premises (i) owned by such Loan Party, which premises are subject to a first priority perfected Lien in favor of the Administrative Agent, or (ii) leased by such Loan Party or, subject to such Loan Party’s compliance with Section 5.15, constituting Non-Mortgaged Properties of such Loan Party where (x) with respect to any leased

9

property, the lessor has delivered to the Administrative Agent a Collateral Access Agreement; provided however that notwithstanding the foregoing, equipment located on leased property with respect to which no Collateral Access Agreement shall have been delivered shall be eligible, and no Reserve referred to in clause (y) of this clause (d) shall be taken, for 75 days following the Effective Date; or (y) a Reserve without duplication with respect to any Reserves to such facility relating to Eligible Inventory for three months of rent, charges, and other amounts due or to become due with respect to such facility has been established by the Administrative Agent in its Permitted Discretion;

          (e) such equipment is in good working order and condition (ordinary wear and tear excepted) and is used or held for use by such Loan Party in the ordinary course of business of such Loan Party;

          (f) such equipment is not subject to any agreement which restricts the ability of such Loan Party to use, sell, transport or dispose of such equipment or which restricts the Administrative Agent’s ability to take possession of, sell or otherwise dispose of such equipment; and

          (g) unless the premises on which such equipment is located are subject to a first priority perfected Lien in favor of the Administrative Agent, or, subject to compliance with Section 5.15, constituting Non-Mortgaged Properties, such equipment does not constitute “fixtures” under the applicable laws of the jurisdiction in which such equipment is located.

          “Eligible Inventory” means, at any time, with respect to each Borrower and any Loan Party, the Inventory of such Borrower or Loan Party which the Administrative Agent determines in its Permitted Discretion is eligible as the basis for the extension of Revolving Loans, Swingline Loans and the issuance of Letters of Credit hereunder. Without limiting the Administrative Agent’s discretion provided herein, Eligible Inventory shall not include any Inventory:

          (a) which is not subject to a first priority perfected Lien in favor of the Administrative Agent;

          (b) which is subject to any Lien other than (i) a Lien in favor of the Administrative Agent and (ii) a Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent;

          (c) which is, in the Administrative Agent’s Permitted Discretion, slow moving, obsolete, unmerchantable, defective, used, unfit for sale, not salable at prices approximating at least the cost of such Inventory in the ordinary course of business;

          (d) with respect to which any covenant, representation, or warranty contained in this Agreement or the Security Agreement has been materially breached or is not true in any material respect and which does not conform in all material respects to all standards imposed by any Governmental Authority;

          (e) in which any Person other than such Borrower or Loan Party shall (i) have any direct or indirect ownership, interest or title to such Inventory or (ii) be indicated on any purchase order or invoice with respect to such Inventory as having or purporting to have an interest therein;

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          (f) which is not finished goods, raw materials, packaging and shipping materials or which constitutes work-in-process, spare or replacement parts, subassemblies, manufacturing supplies, samples, prototypes, displays or display items, bill-and-hold goods, goods that are returned or marked for return, repossessed goods, defective or damaged goods, goods held on consignment, or goods which are not of a type held for sale in the ordinary course of business;

          (g) which is not located in the U.S. or, with respect to Inventory of a Netherlands Loan Party, The Netherlands or is in transit with a common carrier from vendors and suppliers , provided that, up to $2,000,000 of Inventory in transit from vendors and suppliers may be included as eligible pursuant to this clause (g) so long as (i) the Administrative Agent shall have received (1) a true and correct copy of the bill of lading and other shipping documents for such Inventory, (2) evidence of satisfactory casualty insurance naming the Administrative Agent as loss payee and otherwise covering such risks as the Administrative Agent may reasonably request, and (3) if the bill of lading is (A) non-negotiable, a duly executed Collateral Access Agreement from the applicable customs broker for such Inventory or (B) negotiable, confirmation that the bill is issued in the name of the Borrower or Loan Party and consigned to the order of the Administrative Agent, and an acceptable agreement has been executed with such Borrower’s or Loan Party’s customs broker, in which the customs broker agrees that it holds the negotiable bill as agent for the Administrative Agent and has granted the Administrative Agent access to the Inventory and (ii) the common carrier is not an Affiliate of the applicable vendor or supplier;

          (h) which is located in any location leased by such Borrower or Loan Party unless (i) the lessor has delivered to the Administrative Agent a Collateral Access Agreement; provided however that notwithstanding the foregoing, inventory located on leased property with respect to which no Collateral Access Agreement shall have been delivered shall be eligible, and no Reserve referred to in clause (ii) of this clause (h) shall be taken, for 75 days following the Effective Date; or (ii) a Reserve without duplication of any other Reserve with respect to such facility relating to Eligible Equipment for three months rent, charges, and other amounts due or to become due with respect to such facility has been established by the Administrative Agent in its Permitted Discretion;

          (i) which is located in any third party warehouse or is in the possession of a bailee (other than a third party processor) and is not evidenced by a Document (other than bills of lading to the extent permitted pursuant to clause (g) above), unless (i) such warehouseman or bailee has delivered to the Administrative Agent a Collateral Access Agreement and such other documentation as the Administrative Agent may require provided however that notwithstanding the foregoing any such inventory with respect to which no Collateral Access Agreement shall have been delivered shall be eligible, and no Reserve referred to in clause (ii) of this clause (i) shall be taken, for 75 days following the Effective Date; or (ii) a Reserve for three months of charges and other amounts due or to become with respect to such facility has been established by the Administrative Agent in its Permitted Discretion;

          (j) which is being processed offsite at a third party location or outside processor, or is in-transit to or from said third party location or outside processor;

          (k) which is a discontinued product or component thereof;

          (l) which is the subject of a consignment by such Borrower or Loan Party as consignor;

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          (m) which is perishable;

          (n) which contains or bears any intellectual property rights licensed to such Borrower or Loan Party unless the Administrative Agent is satisfied that it may sell or otherwise dispose of such Inventory without (i) infringing the rights of such licensor, (ii) violating any contract with such licensor, or (iii) incurring any liability with respect to payment of royalties other than royalties incurred pursuant to sale of such Inventory under the current licensing agreement; or

          (o) which is not reflected in a current perpetual inventory report of such Borrower or Loan Party (unless such Inventory is reflected in a report to the Administrative Agent as “in transit” Inventory);

          (p) for which reclamation rights have been asserted by the seller until such Inventory is in the seller’s possession; or

          (q) which the Administrative Agent otherwise determines is unacceptable for any reason whatsoever.

          “Eligible Real Property” means the real property owned by a Borrower and any Loan Party (i) that is acceptable in the Permitted Discretion of the Administrative Agent for inclusion in the Borrowing Base of such Borrower, (ii) in respect of which an appraisal report has been delivered to the Administrative Agent in form, scope and substance reasonably satisfactory to the Administrative Agent, (iii) in respect of which the Administrative Agent is satisfied that all actions necessary or desirable in order to create perfected first priority Lien on such real property have been taken, including, the filing and recording of Mortgages, (iv) in respect of which an environmental assessment report has been completed and delivered to the Administrative Agent in form and substance satisfactory to the Administrative Agent, (v) which is adequately protected by fully-paid valid title insurance with endorsements and in amounts acceptable to the Administrative Agent, insuring that the Administrative Agent, for the benefit of the Lenders, shall have a perfected first priority Lien on such real property, evidence of which shall have been provided in form and substance satisfactory to the Administrative Agent, and (vi) if required by the Administrative Agent: (A) either (i) an ALTA survey has been delivered for which all necessary fees have been paid and which is dated no more than 30 days prior to the date on which the applicable Mortgage is recorded, certified to the Administrative Agent and the issuer of the title insurance policy in a manner satisfactory to the Administrative Agent by a land surveyor duly registered and licensed in the state in which such Eligible Real Property is located and acceptable to the Administrative Agent, and shows all buildings and other improvements, any offsite improvements, the location of any easements, parking spaces, rights of way, building setback lines and other dimensional regulations and the absence of encroachments, either by such improvements or on to such property, and other defects, other than encroachments and other defects acceptable to the Administrative Agent or (ii) the title insurance policy referred to in clause (v) above shall not contain an exception for any matter shown by a survey (except to the extent an existing survey has been provided and specifically incorporated into such title insurance policy); (B) in respect of which local counsel for the Agreement in states in which the Eligible Real Property is located have delivered a letter of opinion with respect to the enforceability and perfection of the Mortgages and any related fixture filings in form and substance reasonably satisfactory to the Administrative Agent; and (C) in respect of which such Borrower or Loan Party shall have used its reasonable best efforts to obtain estoppel certificates executed by all tenants of such Eligible Real Property and such other consents, agreements and confirmations of lessors and third parties have been delivered as the Administrative Agent may deem necessary or desirable, together with evidence that all other actions that the Administrative Agent may deem necessary or desirable in order to create perfected first priority Liens on the property described in the Mortgages have been taken.

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          “EMU Legislation” means legislative measures of the European Union (including, without limitation, the European Council regulations) for the introduction of, changeover to or operation of the Euro in one or more member states.

          “Environmental Laws” means all applicable laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material.

          “Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any Borrower or any Subsidiary resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

          “Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests (however designated) in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

          “ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with a Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

          “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by any Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by any Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by any Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

          “Euro Sublimit” means an amount equal to $75,000,000.

          “Eurocurrency”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by

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reference to the Adjusted LIBO Rate or another rate of interest reasonably determined by the Administrative Agent.

          “Euros” or “€” means the single currency of Participating Member States introduced in accordance with the provision of Article 123 of the Treaty and, in respect of all payments to be made under this Agreement in Euros, means immediately available, freely transferable funds.

          “Event of Default” has the meaning assigned to such term in Article VII.

          “Exchange Rate” means, with respect to Euros on a particular date, the rate at which such currency may be exchanged into dollars, as set forth on such date on the applicable Reuters currency page with respect to such currency. In the event that such rate does not appear on the applicable Reuters currency page, the Exchange Rate with respect to such currency shall be determined by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agent and the Borrower Representative or, in the absence of such agreement, such Exchange Rate shall instead be Chase’s spot rate of exchange in the London interbank or other market where its foreign currency exchange operations in respect of such currency are then being conducted, at or about noon, Local Time, at such date for the purchase of dollars with such alternative currency, for delivery two Business Days later; provided, that if at the time of any such determination, for any reason, no such spot rate is being quoted, the Administrative Agent may use any reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error.

          “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of any Borrower hereunder, (a) income or franchise Taxes imposed on (or measured by) its net income by the United States of America (or any political subdivision thereof), or by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits Taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which any Borrower is located, (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by a Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender’s failure to comply with Section 2.17(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrowers with respect to such withholding tax pursuant to Section 2.17(a) and (d) any amount withheld from any payment made to a Lender under this Agreement that is attributable to such Lender’s failure to comply with Section 2.17(g).

          “Fair Market Value Differential” means with respect to any sale, transfer or disposition of any asset of a Loan Party to a Subsidiary that is not a Loan Party the difference between the fair market value of such asset sold, transferred and disposed of and the cash proceeds received by such Loan Party from such Subsidiary that is not a Loan Party.

          “Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

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          “Financial Officer” means the chief financial officer, principal accounting officer, treasurer, assistant treasurer or controller of a Loan Party.

          “Fixed Charge Coverage Ratio” means, the ratio, determined as of the end of each of fiscal quarter of Holdings for the most-recently ended four fiscal quarters, of (a) EBITDA minus the unfinanced portion of Capital Expenditures to (b) Fixed Charges, all calculated for Holdings and its Subsidiaries on a consolidated basis in accordance with GAAP.

          “Fixed Charges” means, with reference to any period, without duplication, cash Interest Expense, plus (i) scheduled principal payments on Indebtedness made during such period, plus (ii) expense for Taxes paid in cash, plus (iii) dividends or distributions paid by Holdings in cash, plus (iv) Capital Lease Obligation payments, plus (v) cash contributions to any Plan in excess of expenses and, with respect to any cash contribution to any Plan made in 2007 and 2008 (to the extent the date any such cash contribution is required to be paid is extended to 2008 in accordance with applicable legislation), minus the Traex Sale Net Proceeds, if any (provided that for any period the aggregate amount of such cash contributions shall not be reduced to an amount less than $0), all calculated for Holdings and its Subsidiaries on a consolidated basis.

          “Foreign Lender” means, with respect to a Borrower, any Lender that is organized under the laws of a jurisdiction other than a jurisdiction in which the Borrower is organized or a resident for Tax purposes. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

          “Foreign Subsidiary” has the meaning set forth in Section 1.3 of the U.S. Security Agreement.

          “Funding Account” has the meaning assigned to such term in Section 4.01(h).

          “GAAP” means generally accepted accounting principles in the United States of America.

          “Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other public entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

          “Grants of Security Interests in Intellectual Property” means, collectively, the Grant of Security Interest in Patent Rights, the Grant of Security Interest in Trademark Rights and the Grant of Security Interest in Copyright Rights to be filed with the United States Patent and Trademark Office.

          “Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of

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credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

          “Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.

          “Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

          “Holdings” means Libbey Inc., a Delaware corporation.

          “Increased Facility Closing Date” means any Business Day designated as such in an Increasing Lender Supplement.

          “Increasing Lender Supplement” means an agreement substantially in the form of Exhibit E between one or more Borrowers and a Lender, satisfactory to the Administrative Agent.

          “Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable and accrued liabilities with respect to obligations owing to employees in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, provided, however, that such Indebtedness, if not assumed, shall be valued at the lower of fair market value of such property on the amount of such Indebtedness incurred, (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (j) obligations under any liquidated earn-out and (k) any other Off-Balance Sheet Liability. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

          “Indemnified Taxes” means Taxes other than Excluded Taxes.

          “Information Memorandum” means the Confidential Information Memorandum dated May 2006, relating to the Borrowers and the Transactions.

          “Intellectual Property” means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, technology, know-how and processes, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

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          “Intercreditor Agreement” means the Intercreditor Agreement, dated as of June 16, 2006, among the US Borrower, the Administrative Agent, the trustee under the Second Lien Senior Notes Indenture and the purchaser of the Third Lien Senior Notes.

          “Interest Election Request” means a request by the Borrower Representative to convert or continue a Revolving Borrowing in accordance with Section 2.07.

          “Interest Expense” means, with reference to any period, total interest expense (including that attributable to Capital Lease Obligations) of Holdings and its Subsidiaries for such period with respect to all outstanding Indebtedness of Holdings and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net expenses under Swap Agreements in respect of interest rates to the extent such net expenses are allocable to such period in accordance with GAAP), calculated on a consolidated basis for Holdings and its Subsidiaries for such period in accordance with GAAP.

          “Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline Loan), the first Business Day of each April, July, October and January and the Maturity Date, (b) with respect to any Eurocurrency Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period and the Maturity Date and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid and the Maturity Date.

          “Interest Period” means (a) with respect to any Eurocurrency Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower Representative may elect; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurocurrency Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a Eurocurrency Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

          “Inventory” has the meaning assigned to such term in the US Security Agreement and, with respect to the Netherlands Loan Parties, “Movables” as defined in the Deed of Disclosed Pledges of Movables in so far as it constitutes inventory for the purposes hereof.

          “Issuing Bank” means Chase, in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.06(i) or if Chase is unable to issue a requested Letter of Credit, subject to Chase’s consent (not to be unreasonably withheld), any other Lender that upon request by the Borrower Representative consents to be an Issuing Bank hereunder. The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

          “Joinder Agreement” has the meaning assigned to such term in Section 5.14.

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          “Judgment Currency” has the meaning set forth in Section 9.18(b).

          “LC Collateral Account” has the meaning assigned to such term in Section 2.06(j).

          “LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of Credit.

          “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the US Borrower at such time. The LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

          “Lenders” means the Persons listed on the Commitment Schedule and any other Person that shall have become a party hereto pursuant to a New Lender Supplement or an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

          “Letter of Credit” means any letter of credit issued pursuant to this Agreement.

          “Libbey Europe Sublimit” means an amount equal to $75,000,000.

          “LIBO Rate” means, with respect to any Eurocurrency Borrowing made in dollars or Euros, for any Interest Period, the rate appearing on Page 3750 of the Dow Jones Market Service (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar or Euro deposits, as applicable, in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar or Euro deposits, as applicable, with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurocurrency Borrowing for such Interest Period shall be the rate at which dollar or Euro deposits, as applicable, of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period. It is understood and acknowledged that the LIBO Rate with respect to borrowings in dollars may be different from the LIBO Rate with respect to borrowings in Euros.

          “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

          “Loan Documents” means this Agreement, any promissory notes issued pursuant to the Agreement, any Increasing Lender Supplement, any New Lender Supplement, any Letter of Credit applications, the Collateral Documents, the Intercreditor Agreement, the Loan Guaranty, any Collateral Access Agreement, any Deposit Account Control Agreement, and all Borrowing Base Certificates and Borrowing Notices. Any reference in the Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements

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           or other modifications thereto, and shall refer to the Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

          “Loan Guarantor” means each of the US Loan Guarantors and the Netherlands Loan Guarantors.

          “Loan Guaranty” means Article X of this Agreement.

          “Loan Parties” means the Netherlands Loan Parties and the U.S. Loan Parties.

          “Loans” means the loans and advances made by the Lenders pursuant to this Agreement, including Swingline Loans and Protective Advances.

          “Local Time” means, with respect to any Borrowing or payment made by the US Borrower or the Netherlands Borrower, Chicago time and London time, respectively.

          “Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations or financial condition of Holdings and its Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform any of its material obligations under the Loan Documents to which it is a party, (c) the Administrative Agent’s Liens (on behalf of itself and the Lenders) on the Collateral or the priority of such Liens, or (d) the rights of or benefits available to the Administrative Agent, the Issuing Bank or the Lenders hereunder.

          “Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of a Swap Agreement of any Loan Party or any of its Subsidiaries in an aggregate principal amount exceeding $5,000,000. For purposes of determining Material Indebtedness, the “obligations” of Holdings or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that Holdings or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

          “Maturity Date” means December 16, 2010, or any earlier date on which the Commitments are permanently reduced to zero or otherwise terminated pursuant to the terms hereof.

          “Maximum Liability” has the meaning assigned to such term in Section 10.10.

          “Moody’s” means Moody’s Investors Service, Inc.

          “Mortgages” means any mortgage, deed of trust or other agreement which conveys or evidences a Lien in favor of the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, on real property of a Loan Party, including any amendment, modification or supplement thereto.

          “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

          “Netherlands Availability” means, with respect to the Netherlands Borrower, at any time, an amount equal to (a) the lesser of the Revolving Netherlands Sublimit and the Netherlands Borrowing Base at such time minus (b) the aggregate amount of the Revolving Netherlands Exposures of all Revolving Lenders at such time; provided that such Netherlands Availability will at no time exceed the difference of (x) the sum of the total Revolving Commitments minus (y) the Aggregate Credit Exposure at such time; and provided, further, that such Netherlands Availability will at no time exceed the

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difference of (i) the Libbey Europe Sublimit minus (ii) the aggregate amount of the Credit Exposures of all Lenders at such time relating to the Netherlands Borrower.

          “Netherlands Banking Act” means the Netherlands Act on the Supervision of the Credit System 1992 (Wet toezicht kredietwezen 1992).

          “Netherlands Borrower” means Libbey Europe B.V., a limited liability company incorporated in The Netherlands.

          “Netherlands Borrowing Base” means, at any time, the sum of (a) 85% of the Netherlands Loan Parties’ Eligible Accounts at such time, plus (b) the lesser of (i) 65% of the Netherlands Loan Parties’ Eligible Inventory, valued at the lower of cost or market value, determined on a first-in-first-out basis, at such time and (ii) the product of 85% multiplied by the Netherlands Loan Parties’ Net Orderly Liquidation Value percentage identified in the most recent inventory appraisal ordered by the Administrative Agent multiplied by the Netherlands Loan Parties’ Eligible Inventory, valued at the lower of cost or market value, determined on a first-in-first-out basis, at such time, minus (c) Reserves without duplication of the Reserves with respect to the US Borrowing Base related to the Netherlands Loan Parties, plus (d) the Netherlands Loan Parties’ PP&E Component. The maximum amount of the Netherlands Borrowing Base which is attributable to Inventory is $12,500,000. The Administrative Agent may, in its Permitted Discretion, reduce the advance rates set forth above, adjust Reserves or reduce one or more of the other elements used in computing the Netherlands Borrowing Base.

          “Netherlands Borrowing Base Certificate” means a certificate, signed and certified as accurate and complete by a Financial Officer of the Borrower Representative, in substantially the form of Exhibit D or another form which is acceptable to the Administrative Agent in its sole discretion.

          “Netherlands Central Bank” means the central bank of The Netherlands (De Nederlandsche Bank).

          “Netherlands Collateral” means any and all property owned, leased or operated by a Person covered by the Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of the Administrative Agent, on behalf of itself and the Lenders, to secure any Netherlands Secured Obligations.

          “Netherlands Collateral Documents” means, collectively, the Netherlands Security Agreements, the Netherlands Mortgages and any other documents granting a Lien upon the Netherlands Collateral as security for payment of the Netherlands Secured Obligations.

          “Netherlands Exemption Regulation” means the Exemption Regulation to the Netherlands Banking Act of the Minister of Finance (Vrijstellingsregeling Wtk 1992), as amended from time to time.

          “Netherlands Loan Guarantors” means the US Borrower’s Subsidiaries that are organized under the laws of The Netherlands (other than the Netherlands Borrower).

          “Netherlands Loan Party” means the Netherlands Borrower, each Netherlands Loan Guarantor party hereto and the Netherlands Security Agreement, and any other Person organized under the laws of The Netherlands who becomes a party to this Agreement and the Netherlands Security Agreement pursuant to a Joinder Agreement.

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          “Netherlands Loans” means the loans and advances made by the Lenders to the Netherlands Borrower pursuant to this Agreement, including Protective Advances made with respect to the Netherlands Borrower.

          “Netherlands Mortgage” means each Mortgage in respect of owned real property located in the Netherlands of a Netherlands Loan Party.

          “Netherlands Obligations” means all obligations in respect of unpaid principal of and accrued and unpaid interest on the Netherlands Loans, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of any Netherlands Loan Party to the Lenders or to any Lender, the Administrative Agent or any indemnified party arising under any Loan Document.

          “Netherlands Secured Obligations” means all Netherlands Obligations, together with all (i) Banking Services Obligations of the Netherlands Borrower or any Netherlands Loan Guarantor and (ii) Swap Obligations of the Netherlands Borrower or any Netherlands Loan Guarantor owing to one or more Lenders or their respective Affiliates; provided that at or prior to the time that any transaction relating to such Swap Obligation is executed, the Lender party thereto (other than Chase) shall have delivered written notice to the Administrative Agent that such a transaction has been entered into and that it constitutes a Netherlands Secured Obligation entitled to the benefits of the Collateral Documents.

          “Netherlands Security Agreement” means each of that certain Deed of Disclosed Pledges of Receivables, Deed of Undisclosed Pledges of Receivables, Deed of Non-Possessory Pledges of Receivables, Deed of Disclosed Pledges of Receivables, Deed of Undisclosed Pledges of Receivables, Deed of Pledges of Intellectual Property Rights, Deed of Disclosed Pledges of Financial Rights, those certain Deeds of Pledges of Shares and those certain Deeds of Mortgages, dated as of the date hereof, between, as the case may be, the Netherlands Borrower, Netherlands Loan Guarantors and the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, and any other pledge or security agreement entered into, after the date of this Agreement by the Netherlands Borrower or any Netherlands Loan Guarantor (as required by this Agreement or any other Loan Document) as the same may be amended, restated or otherwise modified from time to time.

          “Netherlands Swingline Rate” means the rate (adjusted for statutory reserve requirements for Eurocurrency liabilities) for Eurocurrency deposits for a period of one day quoted by JPMorgan Chase Bank, N.A., London Branch, plus the Applicable Rate for such Eurocurrency Loan plus 1% .

          “Net Income” means, for any period, the consolidated net income (or loss) of Holdings and its Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with Holdings or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary) in which Holdings or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by Holdings or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary.

          “Net Orderly Liquidation Value” means, with respect to Inventory, Equipment or intangibles of any Person, the orderly liquidation value thereof as determined in a manner acceptable to the Administrative Agent by an appraiser acceptable to the Administrative Agent, net of all costs of liquidation thereof.

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          “Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable professional and consulting fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event and (iii) the amount of all Taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by a Financial Officer).

          “New Lender” has the meaning assigned to such term in Section 2.01(c)(iii).

          “New Lender Supplement” means an agreement substantially in the form of Exhibit F among one or more Borrowers and a New Lender, satisfactory to the Administrative Agent.

          “Non-Consenting Lender” has the meaning assigned to such term in Section 2.19(b).

          “Non-Mortgaged Property” has the meaning set forth in Section 3.05.

          “Non-Paying Guarantor” has the meaning assigned to such term in Section 10.11.

          “Non-Restricted Deposit Accounts” means payroll and fiduciary accounts, accounts of Subsidiaries that are not Loan Parties, employee benefits, withholding tax, escrow and customs accounts and accounts for retail stores and other purposes (with an aggregate amount on deposit in all such accounts not to exceed $1,000,000; provided that if at any time any such account shall have on deposit $500,000 or more, such account shall cease to be a “Non-Restricted Deposit Account” and shall be subject to a control agreement pursuant to Section 7.1(a) of the Security Agreement).

          “Obligated Party” has the meaning assigned to such term in Section 10.02.

          “Obligations” means, with respect to the US Borrower and the Netherlands Borrower, US Obligations and Netherlands Obligations, respectively. Unless otherwise specified, “Obligations” shall refer to the Obligations with respect to the Borrowers.

          “Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation under any so-called “synthetic lease” transaction entered into by such Person, or (c) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheets of such Person (other than operating leases). For purposes of this Agreement, the outstanding principal amount of Off-Balance Sheet Liabilities shall be deemed equal to the amount of those liabilities that would be outstanding if the transaction was structured as an on balance sheet secured financing.

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          “Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.

          “Participant” has the meaning set forth in Section 9.04.

          “Participating Member States” means a member of the European Union that adopts or has adopted the Euro as its currency in accordance with EMU Legislation.

          “Paying Guarantor” has the meaning assigned to such term in Section 10.11.

          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

          “Permitted Acquisition” means the acquisition by the US Borrower, directly or through a Subsidiary, of an interest (whether of stock or of assets) in any other Person, provided that all of the following conditions shall have been satisfied: (a) such other Person shall operate a similar business or reasonable extension thereof or reasonably related thereto to that of Holdings and its Subsidiaries, (b) no Default or Event of Default shall have occurred and be continuing and none shall exist as a result of and after giving effect thereto, (c) if the US Borrower shall merge or amalgamate with such other Person, the US Borrower shall be the surviving party of such merger or amalgamation, (d) if such Person shall become a Subsidiary of the US Borrower, such new Subsidiary shall, if required by Section 5.14 hereof become a US Loan Party or a Netherlands Loan Party as applicable and take such further actions required by Section 5.14, (e) the Borrower shall have delivered to the Administrative Agent a certificate demonstrating that, both immediately prior to and immediately after giving effect to such acquisition, Aggregate Availability exceeds $35,000,000 and (f) the aggregate amount expended (whether in cash, assumed indebtedness, deferred payments or other consideration) by the US Borrower and its Subsidiaries for all Permitted Acquisitions shall not exceed $25,000,000.

          “Permitted Discretion” means a determination made in good faith and in the exercise of commercially reasonable (from the perspective of a secured asset-based lender) business judgment.

          “Permitted Encumbrances” means:

          (a) Liens imposed by law for Taxes that are not yet due or are being contested in compliance with Section 5.04;

          (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.04;

           (c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

           (d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds, customs duties, and other obligations of a like nature, in each case in the ordinary course of business;

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           (e) judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;

           (f) survey exceptions, encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building codes or other restrictions (including minor defects or irregularities in title and similar encumbrances) as to the use of real properties that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of Holdings or any of its Subsidiaries;

           (g) (1) non-exclusive licenses and sublicenses of Intellectual Property granted in the ordinary course of business, provided, that no such license or sublicense may be granted that would reasonably be expected to constitute an abandonment of any Loan Party’s or any Subsidiary’s trade name or trade marks or other similar Intellectual Property if such abandonment would materially interfere with the business of Holdings and its Subsidiaries; or (2) leases or subleases not otherwise prohibited under this Agreement and the other Loan Documents granted to others not interfering in any material respect in the business of Holdings or any of its Subsidiaries;

           (h) Liens arising solely by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies with respect to the deposit accounts constituting Non-Restricted Accounts or set forth on Schedule 6.02;

           (i) Liens arising from precautionary Uniform Commercial Code financing statement filings regarding operating leases permitted hereunder describing the leased property and proceeds thereof as collateral; and

           (j) any interest or title of a lessor in the leased property under any Capital Lease Obligation permitted pursuant to Section 6.01 or any operating lease entered into by or binding upon a Loan Party or a Subsidiary in the ordinary course of its business and covering only the asset so leased and the personal property thereon and proceeds thereof;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

          “Permitted Investments” means:

           (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

           (b) marketable general obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition of the United States (provided that the full faith and credit of the United States is pledged in support thereof) and, at the time of acquisition having a credit rating of “A” or better from S&P or Moody’s;

           (c) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, a credit rating of A-2 or the equivalent thereof from S&P or P-2 or the equivalent thereof from Moody’s;

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           (d) investments in certificates of deposit, banker’s acceptances and time deposits maturing within 270 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

           (e) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clauses (a), (b) and (d) above and entered into with a financial institution satisfying the criteria described in clause (d) above;

           (f) money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000; and

           (g) in the case of any Foreign Subsidiary, (i) marketable direct obligations issued by, or unconditionally guaranteed by, the sovereign nation in which such Foreign Subsidiary is organized and is conducting business or issued by any agency of such sovereign nation and backed by the full faith and credit of such sovereign nation, in each case maturing within one year from the date of acquisition, so long as the indebtedness of such sovereign nation is rated at least A by S&P or A2 by Moody’s or carries an equivalent rating from a comparable foreign rating agency or (ii) investments of the type and maturity described in clauses (b) through (f) above of foreign obligors, which investments or obligors have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies.

          “Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

          “Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

          “Postclosing Mortgaged Property” means each Non-Mortgaged Property other than 1600 Justo Penn Road, Laredo, Texas and 101 Traex Plaza, Dane, Wisconsin; provided, that the property located at 101 Traex Plaza, Dane, Wisconsin, shall not be deemed a Postclosing Mortgaged Property unless a definitive letter of intent with respect to the sale of such property has not been executed and delivered to the Administrative Agent on or before December 31, 2006.

          “PP&E Component” shall mean, at the time of any determination, with respect to all of the applicable Loan Parties, an aggregate amount equal to the lesser of (i) 50% of the fair market value of such Loan Parties’ Eligible Real Property plus 75% of the net orderly liquidation value of such Loan Parties’ Eligible Equipment less Reserves and (ii) $25,000,000.

          “Prepayment Event” means, without duplication:

           (a) any sale, transfer or other disposition (including pursuant to a sale and leaseback transaction) of any property or asset of any Loan Party, other than dispositions described in Section 6.05(a); or

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           (b) any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Loan Party.

          “Prime Rate” means the rate of interest per annum publicly announced from time to time by Chase as its prime rate; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

          “Professional Market Party” means a professional market party (professionele marktpartij) as defined in the Netherlands Exemption Regulation 1992 (Vrijstellingsregeling Wtk 1992), dated 26 June 2002 (as amended from time to time), which at the date of this Agreement includes, without limitation: (i) individuals or entities who or which are subject to supervision by a supervisory authority in any country to lawfully operate on the financial markets; (ii) individuals or entities lawfully engaging in regulated activities on the financial markets without being subject to supervision by a supervisory authority (e.g. exempt credit and financial institutions, insurance companies, investment firms, collective investment schemes and their management companies, pension funds and their management companies, commodity dealers and special purpose vehicles); (iii) the Dutch government (de Staat der Nederlanden), De Nederlandsche Bank, a foreign government body being part of a central government, a foreign central bank, Dutch or foreign regional, local or other decentralized governmental institutions, international treaty organizations and supranational organizations; (iv) entities meeting at least two of the following criteria according to their most recent consolidated or non-consolidated annual accounts: (1) an average of at least 250 employees during the financial year, (2) total assets of at least €43,000,000 according to its balance sheet, and (3) annual net turnover of at least €50,000,000; (v) entities with their registered office in The Netherlands which at their request to be considered as qualified investors (within the meaning of Directive 2003/71/EC) have been entered in the register of qualified investors maintained by the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten); (vi) individuals who are resident in The Netherlands and meeting at least two of the following criteria and who at their request to be considered as qualified investors have been entered in the register of qualified investors: (1) they have carried out at least 10 sizeable transactions on the financial markets in each of the preceding four calendar quarters, (2) the size of their securities portfolio is at least €500,000, and (3) they have worked for at least one year in the financial sector in a position which requires knowledge of investment in securities; (vii) entities whose sole corporate purpose is to invest in securities; (vii) special purpose vehicles in securitization transactions provided that they issued securities; (viii) subsidiaries of a Professional Market Party referred to under (i) through (vii) above provided such subsidiaries are subject to prudential supervision on a consolidated basis as a result of the supervision exercised over such Professional Market Party; (ix) enterprises or entities with total assets of at least €500,000,000 (or the dollar equivalent thereof) according to their balance sheet at the end of the financial year immediately preceding the date they extend credit hereunder to a Netherlands Borrower or the date they become a Lender of a Netherlands Loan; (x) enterprises, entities or individuals with a net equity (eigen vermogen) of at least €10,000,000 (or the dollar equivalent thereof) who or which on average performed activities on the financial markets twice a month during the two consecutive years immediately preceding the date that they extend credit hereunder to a Netherlands Borrower or the date that they become a Lender of a Netherlands Loan (xi) an entity which has a credit rating from a rating agency which in the opinion of De Nederlandsche Bank is acceptable or which issues securities with a credit rating from a rating agency which in the opinion of De Nederlandsche Bank is acceptable; and (xii) such other individuals and entities designated as professional market party (professionele marktpartij) by the competent Netherlands authorities after the date hereof by any amendment of the applicable regulations.

          “Projections” has the meaning assigned to such term in Section 5.01(f).

          “Protective Advance” has the meaning assigned to such term in Section 2.04.

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          “Real Estate Reserve” means a $5,000,000 Reserve, which Reserve may be adjusted in the Administrative Agent’s Permitted Discretion after the Administrative Agent shall have received satisfactory Phase II Environmental Reports with respect to the Specified Properties.

          “Register” has the meaning set forth in Section 9.04.

          “Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

          “Report” means reports prepared by the Administrative Agent or another Person showing the results of appraisals, field examinations or audits pertaining to the Borrowers’ assets from information furnished by or on behalf of the Borrowers, after the Administrative Agent has exercised its rights of inspection pursuant to this Agreement, which Reports may be distributed to the Lenders by the Administrative Agent.

          “Required Lenders” means, at any time, Lenders having Credit Exposure (USD Equivalent) and unused Commitments representing more than 50% of the sum of the total Credit Exposure (USD Equivalent) and unused Commitments at such time and based on the Exchange Rate in effect at such time.

          “Required Swap Agreements” has the meaning set forth in Section 5.15.

          “Requirement of Law”: as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

          “Reserves” means any and all reserves which the Administrative Agent deems necessary, in its Permitted Discretion, to maintain (including, without limitation, an availability reserve, reserves for accrued and unpaid interest on the Secured Obligations, Banking Services Reserves, reserves for rent at locations leased by any Loan Party and for consignee’s, warehousemen’s and bailee’s charges, reserves for dilution of Accounts, reserves for Inventory shrinkage, reserves for customs charges and shipping charges related to any Inventory in transit, reserves for Swap Obligations, reserves for contingent liabilities of any Loan Party, reserves for uninsured losses of any Loan Party, reserves for uninsured, underinsured, un-indemnified or under-indemnified liabilities or potential liabilities with respect to any litigation and reserves for Taxes, fees, assessments, and other governmental charges) with respect to the Collateral or any Loan Party.

          “Reset Date” means the second Business Day following each Calculation Date, provided that, in connection with any Calculation Date designated pursuant to clause (b) of the definition thereof, the applicable Reset Date shall be such Calculation Date.

          “Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in any Loan Party or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the US Borrower or any option, warrant or other right to acquire any such Equity Interests in the US Borrower.

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          “Restriction Commencement Date” means a date on which a Restriction Trigger Event shall have occurred.

          “Restriction Period” means the period commencing on a Restriction Commencement Date and ending on a Restriction Release Date.

          “Restriction Period Grid” means the table set forth below setting forth the applicable Restriction Trigger Amounts and Restriction Release Amounts with respect to each provision of the Loan Documents wherein the term “Restriction Period” is used:

Relevant Provision	Restriction Trigger Amount			Restriction Release Amount
Section 5.01 of the Credit Agreement		$	30,000,000	$	40,000,000
Section 6.08 of the Credit Agreement		$	25,000,000	$	40,000,000
Section 6.15 of the Credit Agreement		$	15,000,000	$	25,000,000
Article VII of the US Security Agreement		$	25,000,000	$	35,000,000

          “Restriction Release Amount” means, with respect to each provision of the Loan Documents wherein the term “Restriction Period” is used, the amount set forth in the Restriction Period Grid opposite the reference to such provision.

          “Restriction Release Date” means a date on which a Restriction Release Event shall have occurred.

          “Restriction Release Event” means that the sum of (i) the Aggregate Availability plus (ii) the aggregate amount of cash or Permitted Investments subject to a first priority perfected security interest in favor of the Administrative Agent pursuant to the Loan Documents is greater than or equal to the applicable Restriction Release Amount as of any Reset Date and during the period of thirty (30) consecutive days immediately succeeding such Reset Date.

          “Restriction Trigger Amount” means, with respect to each provision of the Loan Documents wherein the term “Restriction Period” is used, the amount set forth in the Restriction Period Grid opposite the reference to such provision.

          “Restriction Trigger Event” means that both (a) as of any Reset Date the sum of (i) the Aggregate Availability plus (ii) the aggregate amount of cash or Permitted Investments subject to a first priority perfected security interest in favor of the Administrative Agent pursuant to the Loan Documents fails to be equal to or greater than the applicable Restriction Trigger Amount and (b) such failure shall have continued unremedied for three (3) consecutive days following notice of such failure from the Administrative Agent (provided, that no such notice shall be required during the existence of an Event of Default of the type described in paragraphs (h) or (i) in Article VIII).

          “Revolving Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum possible aggregate amount of such Lender’s Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time

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pursuant to Section 2.09, (b) increased from time to time pursuant to Section 2.01(c) and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Revolving Commitment, or in the New Lender Supplement, pursuant to which such Lender shall have assumed its Commitment, as applicable. The initial aggregate amount of the Lenders’ Revolving Commitments is $150,000,000.

          “Revolving Euro Exposure” means, with respect to any Lender as it relates to any Borrower at any time, the Revolving Exposure of such Lender as it relates to such Borrower at such time that is denominated in Euros.

          “Revolving Exposure” means, with respect to any Lender as it relates to any Borrower at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans to such Borrower, in each case, and its LC Exposure with respect to any Letter of Credit requested by such Borrower and an amount equal to its Applicable Percentage of the aggregate principal amount of Swingline Loans to such Borrower, in each case, at such time.

          “Revolving Lender” means, as of any date of determination, a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Exposure.

          “Revolving Loan” means a Loan made pursuant to Section 2.01(a).

          “Revolving Netherlands Sublimit” means, with respect to each Lender, the obligation, if any, of such Lender to make Revolving Loans hereunder to the Netherlands Borrower based on the Netherlands Borrowing Base, expressed as an amount representing the maximum possible aggregate amount of such Lender’s Revolving Exposure hereunder, as such obligation may be (a) reduced from time to time pursuant to Section 2.09, (b) increased from time to time pursuant to Section 2.01(c) and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s Revolving Netherlands Sublimit is set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Revolving Netherlands Sublimit, or in the New Lender Supplement, pursuant to which such Lender shall have assumed its Commitment, as applicable. The initial aggregate amount of the Lenders’ Revolving Netherlands Sublimit is $25,000,000.

          “Revolving Netherlands Exposure” means, with respect to any Lender as it relates to the Netherlands Borrower, at any time, the sum of the principal amount of such Lender’s Netherlands Loans outstanding at such time made pursuant to the Revolving Netherlands Sublimit.

          “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc.

          “Second Lien Registration Rights Agreement” means the Registration Rights Agreement dated as of June 16, 2006 entered into by Holdings, the US Borrower, certain of the US Loan Guarantors, JPMorgan Securities Inc., Bear Stearns & Co. Inc. and BNY Capital Markets, Inc. in connection with the issuance of the Second Lien Senior Notes, together with all instruments and other agreements entered into by the US Borrower or such US Loan Guarantors in connection therewith.

          “Second Lien Senior Notes” means the Floating Rate Senior Secured Notes due 2011 of the US Borrower issued on the Effective Date pursuant to the Second Lien Senior Notes Indenture.

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          “Second Lien Senior Notes Indenture” means the Indenture dated as of June 16, 2006 entered into by the US Borrower, certain of the US Loan Guarantors and The Bank of New York Trust Company, N.A., as trustee, in connection with the issuance of the Second Lien Senior Notes, together with all instruments and other agreements entered into by the US Borrower or such US Loan Guarantors in connection therewith.

          “Secured Obligations” means, collectively, the US Secured Obligations and Netherlands Secured Obligations.

          “Security Agreement” means, with respect to the US Borrower and the Netherlands Borrower, the US Security Agreement and the Netherlands Security Agreement, respectively. Unless otherwise specified, “Security Agreement” shall refer to the US Security Agreement and the Netherlands Security Agreement, collectively.

          “Senior Notes” means, collectively, the Second Lien Senior Notes and the Third Lien Senior Notes.

          “Senior Notes Indentures” means, collectively, the Second Lien Senior Notes Indenture and the Third Lien Senior Notes Indenture.

          “Settlement” has the meaning assigned to such term in Section 2.05(d).

          “Settlement Date” has the meaning assigned to such term in Section 2.05(d).

          “Solvent” mean, with respect to each Loan Party, at any time that (i) the fair value of the assets of such Loan Party, at a fair valuation, at such time exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of such Loan Party at such time are greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) such Loan Party at such time is able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) such Loan Party at such time does not have unreasonably small capital with which to conduct the business in which it is engaged as such business is then conducted and is proposed to be conducted thereafter.

          “Specified Change in Control” means a “Change of Control” (or any other defined term having a similar purpose) as defined in the Senior Notes Indentures.

          “Specified Properties” means the owned real property of the US Borrower located in (i) Toledo, Ohio, (ii) Shreveport, Louisiana, and (iii) Syracuse, New York.

          “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

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          “Subordinated Indebtedness” of a Person means any Indebtedness of such Person the payment of which is contractually subordinated to payment of the Secured Obligations to the reasonable written satisfaction of the Administrative Agent; provided, that the Senior Notes shall not be deemed to be Subordinated Indebtedness for purposes hereof.

          “subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held by the parent or one or more subsidiaries of the parent.

          “Subsidiary” means with respect to any Loan Party any direct or indirect subsidiary of such Loan Party.

          “Supermajority Lenders” means, at any time, Lenders having Revolving Exposure and unused Revolving Commitments representing 66 2/3% or more of the sum of the total Revolving Exposure and unused Revolving Commitment.

          “Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrowers or the Subsidiaries shall be a Swap Agreement.

          “Swap Obligations” of a Person means any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Swap Agreements, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction.

          “Swingline Lender” means JPMorgan Chase Bank, N.A. in its capacity as lender of Swingline Loans hereunder.

          “Swingline Loan” means a Loan made pursuant to Section 2.05.

          “Syndication Agent” has the meaning assigned to such term in the preamble.

          “Taxable Advance” has the meaning assigned to such term in Section 2.17(h).

          “Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

          “Third Lien Senior Notes” means the Senior Subordinated Secured Pay-in-Kind Notes due 2011 issued on the Effective Date pursuant to the Third Lien Senior Notes Indenture.

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          “Third Lien Senior Notes Indenture” means the Indenture dated as of June 16, 2006 entered into by the US Borrower and certain of the US Loan Guarantors in connection with the issuance of the Third Lien Senior Notes, together with all instruments and other agreements entered into by the US Borrower or such US Loan Guarantors in connection therewith.

          “Transactions” means the execution, delivery and performance by the Loan Parties of this Agreement, the borrowing of Loans and other credit extensions, the use of the proceeds thereof and the issuance of Letters of Credit hereunder, the guarantees made hereunder by any Loan Guarantor and, to the extent utilized by any Borrower, any increase of Commitments.

          “Traex Sale” means sales, transfers and dispositions of the business and related assets currently conducted by the Traex Company.

          “Traex Sale Net Proceeds” means, for any period, the Net Proceeds received by any Loan Party in connection with the Traex Sale minus any amount of such Net Proceeds deducted from the calculation of Fixed Charges in any prior period.

          “Treaty” means the Treaty establishing the European Economic Community, being the Treaty of Rome of March 25, 1957, as amended by the Single European Act 1987, the Maastricht Treaty (which was signed at Maastricht on February 7, 1992 and came into force on November 1, 1993), the Amsterdam Treaty (which was signed at Amsterdam on October 2, 1997 and came into force on May 1, 1999) and the Nice Treaty (which was signed at Nice on February 26, 2001), each as amended from time to time and as referred to in legislative measures of the European Union for the introduction of, changeover to or operating of the Euro in one or more member states.

          “2007 ERISA Reserve” means a Reserve in the amount of $5,000,000 on the date hereof, increasing by $1,000,000 per month (commencing with the delivery of the Borrowing Base Certificate for the month of June 2006) up to a total of $10,000,000, as may be reduced by the Administrative Agent in its Permitted Discretion, which Reserve shall apply until the later of September 15, 2007 and the date on which the payment of the relevant Plan contribution occurs (which payment is currently expected to occur on or about September 15, 2007); provided that any amount so reserved shall be available to the Borrower to make such Plan contribution.

          “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate, the Alternate Base Rate or another rate of interest reasonably determined by the Administrative Agent, and whether such Loan or Borrowing is made in dollars or Euros.

          “UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.

          “United States” and “U.S.” means the United States of America.

          “Unliquidated Obligations” means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (i) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (ii) any other obligation (including any guarantee or any indemnification obligation) that is contingent in nature at such time; or (iii) an obligation to provide collateral to secure any of the foregoing types of obligations.

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          “US Borrower” means Libbey Glass Inc., a Delaware corporation.

          “US Borrowing Base” means, at any time, the sum of (a) 85% of the Eligible Accounts at such time of all US Loan Parties other than Holdings, plus (b) the lesser of (i) 65% of such Loan Parties’ Eligible Inventory, valued at the lower of cost or market value, determined on a first-in-first-out basis, at such time and (ii) the product of 85% multiplied by such US Loan Parties’ Net Orderly Liquidation Value percentage identified in the most recent inventory appraisal ordered by the Administrative Agent multiplied by such US Loan Parties’ Eligible Inventory, valued at the lower of cost or market value, determined on a first-in-first-out basis, at such time, minus (c) Reserves without duplication of any Reserves with respect to the Netherlands Borrowing Base (including, but not limited to, (i) the 2007 ERISA Reserve and (ii) the Real Estate Reserve) related to such US Loan Parties, plus (d) such US Loan Parties’ PP&E Component. The maximum amount of the US Borrowing Base attributable to Inventory, together with Inventory attributable to the Netherlands Borrowing Base, is $75,000,000. The maximum amount of the US Borrowing Base attributable to the PP&E Component, together with the PP&E Component attributable to the Netherlands Borrowing Base, is $25,000,000. The Administrative Agent may, in its Permitted Discretion, reduce the advance rates set forth above, adjust Reserves or reduce one or more of the other elements used in computing the US Borrowing Base.

          “US Borrowing Base Certificate” means a certificate, signed and certified as accurate and complete by a Financial Officer of the Borrower Representative, in substantially the form of Exhibit C or another form which is acceptable to the Administrative Agent in its sole discretion.

          “US Collateral” means any and all property owned, leased or operated by a Person covered by the US Collateral Documents and any and all other property of any US Loan Party, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of the Administrative Agent, on behalf of itself and the Lenders, to secure any Secured Obligations.

          “US Collateral Documents” means, collectively, the US Security Agreement, the US Mortgages, the Grants of Security Interests in Intellectual Property and any other documents granting a Lien upon the US Collateral as security for payment of the Secured Obligations.

          “US General Availability” means, at any time, an amount equal to the difference of (a) the lesser of the total Revolving Commitments and the US Borrowing Base at such time minus (b) the total Revolving Exposure (excluding Revolving Netherlands Exposures) at such time; provided that such US General Availability will at no time exceed the difference of (x) the sum of the total Revolving Commitments minus (y) the Aggregate Credit Exposure at such time.

          “US Loan Guarantors” means the US Borrower’s domestic Subsidiaries and Holdings.

          “US Loan Party” means the US Borrower, the US Loan Guarantors party hereto and the US Security Agreement, and any other Person (other than a Netherlands Loan Party) who becomes a party to this Agreement and the US Security Agreement pursuant to a Joinder Agreement and their successors and assigns.

          “US Loans” means the loans and advances made by the Lenders to the US Borrower pursuant to this Agreement, including Swingline Loans and Protective Advances.

          “US Mortgage” means each Mortgage in respect of real property of a US Loan Party.

          “US Non-Paying Guarantor” has the meaning assigned to such term in Section 10.11(a).

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          “US Paying Guarantor” has the meaning assigned to such term in Section 10.11(a).

          “US Obligations” means all obligations in respect of unpaid principal of and accrued and unpaid interest (including without limitation any Post-Petition Interest (as defined in the Intercreditor Agreement)) on the US Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations (not constituting or arising in respect of principal or interest or LC Disbursements) of any US Loan Party to the Lenders or to any Lender, the Administrative Agent, the Issuing Bank or any indemnified party arising under any Loan Document.

          “US Secured Obligations” means all US Obligations, together with all (i) Banking Services Obligations of the US Borrower or any US Loan Guarantor and (ii) Swap Obligations of the US Borrower or any US Loan Guarantor owing to one or more Lenders or their respective Affiliates; provided that at or prior to the time that any transaction relating to such Swap Obligation is executed, the Lender party thereto (other than Chase) shall have delivered written notice to the Administrative Agent that such a transaction has been entered into and that it constitutes a US Secured Obligation entitled to the benefits of the US Collateral Documents.

          “US Security Agreement” means that certain Pledge and Security Agreement, dated as of the date hereof, between the US Borrower, the US Loan Guarantors and the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, and any other pledge or security agreement entered into, after the date of this Agreement by any other US Loan Guarantor (as required by this Agreement or any other Loan Document), or any other Person, as the same may be amended, restated or otherwise modified from time to time.

          “USD Equivalent” means, with respect to any amount of Euros, on any date, the amount of dollars that may be purchased with such amount of Euros at the Exchange Rate in effect on such date.

          “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

          SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by Class and Type (e.g., a “Eurocurrency Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurocurrency Borrowing”) or by Class and Type (e.g., a “Eurocurrency Revolving Borrowing”).

          SECTION 1.03. Terms of Usage. (a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document or contractual obligation herein shall, unless otherwise specified, be construed as referring to such agreement, instrument or other document or contractual obligation as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or any other Loan Document), (b) any reference herein to any Person shall be construed to include such Person’s successors and permitted assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this

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Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

          (b) In this Agreement, where it relates to a Netherlands entity, reference to (i) a winding-up, administration or dissolution includes a Netherlands entity being declared bankrupt (failliet verklaard) or dissolved (ontbonden); (ii) a moratorium includes surséance van betaling and granted a moratorium includes surséance verleend; (iii) any step or procedure taken in connection with insolvency proceedings includes a Netherlands entity having filed a notice under Section 36 of the Tax Collection Act of the Netherlands (Invorderingswet 1990) or Section 16d of the Social Insurance Coordination Act of the Netherlands (Coördinatiewet Sociale Verzekeringen); (iv) a trustee in bankruptcy includes a curator; (v) an administrator includes a bewindvoerder; and (vi) an attachment includes a beslag.

          SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower Representative notifies the Administrative Agent that the Borrowers request an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower Representative that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

ARTICLE II

THE CREDITS

          SECTION 2.01. Commitments.

          (a) (A) Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving Loans to each Borrower from time to time during the Availability Period in dollars or Euros, as requested by such Borrower, in an aggregate principal amount that will not result in (i) the USD Equivalent of such Lender’s Revolving Exposure with respect to the Borrowers exceeding such Lender’s Revolving Commitment, (ii) the USD Equivalent of the Aggregate Credit Exposures with respect to the Borrowers exceeding the sum of the total Revolving Commitments, (iii) the USD Equivalent of the total Revolving Exposures (excluding Revolving Netherlands Exposures) exceeding the US Borrowing Base, (iv) the USD Equivalent of the total Revolving Euro Exposures with respect to the Borrowers exceeding the Euro Sublimit, (v) the USD Equivalent of such Lender’s Revolving Netherlands Exposure with respect to the Netherlands Borrower exceeding such Lender’s Revolving Netherlands Sublimit, (vi) the USD Equivalent of the total Revolving Netherlands Exposures with respect to the Netherlands Borrower exceeding the sum of the total Revolving Netherlands Sublimit, (vii) the USD Equivalent of the total Revolving Netherlands Exposures exceeding the Netherlands Borrowing Base or (viii) the USD Equivalent of the total Revolving Exposures relating to the Netherlands Borrower exceeding the Libbey Europe Sublimit, subject to the Administrative Agent’s authority, in its sole discretion, to make Protective Advances pursuant to the terms of Section 2.04. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Revolving Loans. Subject to Section 2.14, each Borrowing made in Euros shall be comprised entirely of Eurocurrency Loans.

           (B) Not later than noon, Local Time, on the second Business Day preceding the Borrowing Date with respect to each Borrowing (or, in the case of an ABR Borrowing at a

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time when Eurocurrency Loans made in Euros shall be outstanding, promptly on such Borrowing Date), the Administrative Agent shall determine the Exchange Rate with respect to Euros as of such date and give notice thereof to the relevant Borrower and the relevant Lenders. The Exchange Rate so determined shall become effective on such Borrowing Date for the purposes of determining availability under the Commitments with respect to such Borrowing (it being understood that such availability shall be calculated and determined by applying such Exchange Rate to the aggregate principal amount of Loans made in Euros which are outstanding on such Borrowing Date).

          (b) Not later than 2:00 p.m., New York City time, on each Calculation Date (so long as any Eurocurrency Loans made in Euros shall be outstanding), the Administrative Agent shall determine the Exchange Rate with respect to Euros as of such Calculation Date and give notice thereof to the relevant Borrowers and the relevant Lenders. The Exchange Rate so determined shall become effective on the next succeeding Reset Date. If, on any Reset Date, (i) the USD Equivalent of the total Revolving Euro Exposures relating to the Borrowers exceeds the Euro Sublimit, (ii) the USD Equivalent of the total Revolving Netherlands Exposures relating to the Netherlands Borrower exceeds the sum of the total Revolving Netherlands Sublimit, (iii) the USD Equivalent of the total Revolving Exposures (excluding Revolving Netherlands Exposure) relating to the Borrowers exceeds the US Borrowing Base, (iv) the USD Equivalent of the total Revolving Netherlands Exposure relating to the Netherlands Borrower exceeds the Netherlands Borrowing Base or (v) the USD Equivalent of the total Revolving Exposures relating to the Netherlands Borrower exceeds the Libbey Europe Sublimit, then each such Borrower shall, within three Business Days after notice thereof from the Administrative Agent, prepay its Revolving Loans in an aggregate USD Equivalent amount equal, when taken together with any contemporaneous prepayment by the other Borrower, to any such excess (such calculation to be made using the Exchange Rate that is effective on such Reset Date); provided that any such prepayment shall be accompanied by accrued interest to the extent required by Section 2.13 but shall be without premium or penalty of any kind (other than any payments required under Section 2.16).

          (c) (A) Any Borrower and any one or more Lenders (including New Lenders (as defined herein)) may, with the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed), at any time after the Effective Date, agree that such Lenders shall obtain or increase the amount of their Commitments by executing and delivering to the Administrative Agent an Increasing Lender Supplement specifying (a) the amount of such increase, (b) the sub-amount of such increase, if any, constituting a Revolving Netherlands Sublimit and (c) the applicable Increased Facility Closing Date. Notwithstanding the foregoing, without the consent of the Required Lenders, (i) the aggregate amount of the Commitments may not be increased by an amount greater than $30,000,000 (it being understood that the total amount of all increases shall not exceed $30,000,000 in the aggregate without such consent of the Required Lenders), (ii) each increase effected pursuant to this paragraph shall be in a minimum amount of at least $5,000,000 and (iii) no more than two Increased Facility Closing Dates may be selected by the Borrowers during the term of this Agreement. No increase in the Commitments (or in the Commitment of any Lender), shall become effective under this paragraph unless, (A) on the proposed date of the effectiveness of such increase, the conditions set forth in paragraphs (a) and (b) of Section 4.02 shall be satisfied (or waived in accordance with Section 9.02), (B) no Default or Event of Default shall have occurred and be occurring and (C) the Administrative Agent shall have received an Increasing Lender Supplement or New Lender Supplement with a certification to this effect. No Lender shall have any obligation to participate in any increase described in this paragraph unless it agrees in writing to do so in its sole discretion. The Administrative Agent shall promptly give notice to all Lenders of any such increase.

          (B) Any additional bank, financial institution or other entity which, with the consent of the relevant Borrower or Borrowers and the Administrative Agent, elects to become a

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“Lender” under this Agreement in connection with any transaction described in Section 2.01(c)(i) shall execute a New Lender Supplement whereupon such bank, financial institution or other entity (a “New Lender”) shall become a Lender for all purposes and to the same extent as if originally a party hereto and shall be bound by and entitled to the benefits of this Agreement.

           (C) On each Increased Facility Closing Date, (i) each New Lender and/or the Lender(s) that have increased their Commitments shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other relevant Lenders, as being required in order to cause, after giving effect to such increase and the use of such amounts to make payments to such other relevant Lenders, each Lender’s portion of the outstanding Loans of all the Lenders to equal its then effective Applicable Percentage of such outstanding Loans, and (ii) the Borrower shall be deemed to have repaid and reborrowed all outstanding Loans as of the date of any increase in the Commitments (with such reborrowing to consist of the Types of Loans, with related Interest Periods if applicable, specified in a notice delivered by the Borrower in accordance with the requirements of Section 2.03). The deemed payments made pursuant to clause (ii) of the immediately preceding sentence in respect of each Eurocurrency Loan shall be subject to indemnification by the Borrower pursuant to the provisions of Section 2.16 if the deemed payment occurs other than on the last day of any related Interest Period.

          SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments of the applicable Class. Any Protective Advance and any Swingline Loan shall be made in accordance with the procedures set forth in Section 2.04 and 2.05.

          (b) Subject to Section 2.14, each Revolving Borrowing shall be comprised entirely of ABR Loans or Eurocurrency Loans as the Borrower Representative may request in accordance herewith, provided that all Eurocurrency Borrowings made on the Effective Date must be made in accordance with Section 2.03(b). Each Swingline Loan to the US Borrower shall be an ABR Loan and each Swingline Loan to the Netherlands Borrower shall bear interest at the Netherlands Swingline Rate. Each Lender at its option may make any Eurocurrency Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the applicable Borrowers to repay such Loan in accordance with the terms of this Agreement.

          (c) At the commencement of each Interest Period for any Eurocurrency Borrowing, such Borrowing shall be in an aggregate (USD Equivalent) amount that is an integral multiple of $500,000 and not less than $2,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate (USD Equivalent) amount that is an integral multiple of $500,000 and not less than $1,000,000; provided that an ABR Borrowing may be in an aggregate (USD Equivalent) amount that is equal to the entire unused balance of the total Revolving Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e). Each Swingline Loan shall be in an amount that is an integral multiple of $100,000 and not less than $500,000. Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of 10 Eurocurrency Borrowings outstanding.

          (d) Notwithstanding any other provision of this Agreement, the Borrower Representative shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

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          SECTION 2.03. Requests for Borrowings. To request a Borrowing, the Borrower Representative shall notify the Administrative Agent of such request either by submitting a Borrowing Notice (delivered by hand or facsimile) signed by the Borrower Representative or by telephone (a) in the case of a Eurocurrency Borrowing, not later than noon, Local Time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than noon, Local Time, on the date of the proposed Borrowing; provided, that with respect to any Eurocurrency Borrowing proposed to be made on the Effective Date, the Administrative Agent shall not later than noon, Local Time, three Business Days prior to the Effective Date have received a Borrowing Notice and a funding indemnity side letter by each Borrower requesting such Borrowing for the benefit of the Administrative Agent and each Lender reasonably satisfactory to the Administrative Agent, and in case such notice and side letter are not so received by such time, the Borrower shall be deemed to have requested the USD Equivalent of ABR Loans denominated in dollars in lieu of such Eurocurrency Loans; and provided, further, that any such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e) may be given not later than 9:00 a.m., Chicago time, on the date of the proposed Borrowing. Each such telephonic Borrowing Notice shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of a written Borrowing Notice signed by the Borrower Representative. Each such telephonic and written Borrowing Notice shall specify the following information in compliance with Section 2.01:

     (i) the name of the applicable Borrower;

     (ii) the aggregate amount of the requested Borrowing and a breakdown of the separate wires comprising such Borrowing;

     (iii) the date of such Borrowing, which shall be a Business Day;

     (iv) whether such Borrowing is to be made in dollars or Euros;

     (v) whether such Borrowing is to be made pursuant to the Revolving Netherlands Sublimit;

     (vi) whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and

     (vii) in the case of a Eurocurrency Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period.”

If no election as to the Type of Borrowing is specified in such Borrowing Notice, then the requested Borrowing shall be, in the case of a Borrowing requested to be made in dollars, an ABR Borrowing and, in the case of a Borrowing requested to be made in Euros, a Eurocurrency Borrowing with an Interest Period of one month. If no Interest Period is specified with respect to any requested Eurocurrency Revolving Borrowing, then the applicable Borrower(s) shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Notice in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

          SECTION 2.04. Protective Advances. (a) Subject to the limitations set forth below, the Administrative Agent is authorized by the Borrowers and the Lenders, from time to time in the Administrative Agent’s sole discretion (but shall have absolutely no obligation to), to make Loans to the Borrowers in dollars or Euros, on behalf of all Lenders, which the Administrative Agent, in its Permitted

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Discretion, deems necessary or desirable (i) to preserve or protect the Collateral, or any portion thereof, (ii) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and other Obligations, or (iii) to pay any other amount chargeable to or required to be paid by any Borrower pursuant to the terms of this Agreement, including payments of reimbursable expenses (including costs, fees, and expenses as described in Section 9.03) and other sums payable under the Loan Documents (any of such Loans are herein referred to as “Protective Advances”); provided that, the aggregate USD Equivalent amount of Protective Advances outstanding at any time shall not at any time exceed $10,000,000; provided further that, the USD Equivalent amount of Aggregate Credit Exposure shall not exceed the sum of the total Revolving Commitments; provided further that, the USD Equivalent of any Lender’s Revolving Exposure shall not exceed such Lender’s Revolving Commitment. Protective Advances may be made even if the conditions precedent set forth in Section 4.02 have not been satisfied. Protective Advances with respect to the US Borrower shall be secured by liens in favor of the Administrative Agent for the benefit of itself, the Issuing Lenders and the Lenders on and to the US Collateral and shall constitute Obligations of the US Borrower. Protective Advances with respect to the Netherlands Borrower shall be secured by the Liens in favor of the Administrative Agent for the benefit of itself, the Issuing Lenders and the Lenders in and to the Collateral and shall constitute Obligations of the Netherlands Borrower hereunder. All Protective Advances shall be, in the case of a Borrowing made in dollars, ABR Borrowings and, in the case of a Borrowing made in Euros, bear interest at an interest rate reasonably determined by the Administrative Agent to compensate the applicable Lenders for such Borrowing in Euros for the applicable period. The Administrative Agent’s authorization to make Protective Advances may be revoked at any time by the Required Lenders. Any such revocation must be in writing and shall become effective prospectively upon the Administrative Agent’s receipt thereof. At any time that there is sufficient Availability with respect to the Borrower on whose behalf a Protective Advance was made and the conditions precedent set forth in Section 4.02 have been satisfied, the Administrative Agent may request the Revolving Lenders to make a Revolving Loan to such Borrower (including, with respect to the Netherlands Borrower, pursuant to the Revolving Netherlands Sublimit) to repay such Protective Advance. At any other time the Administrative Agent may require the Lenders to fund their risk participations described in Section 2.04(b).

     (b) Upon the making of a Protective Advance by the Administrative Agent (whether before or after the occurrence of a Default), each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Administrative Agent without recourse or warranty, an undivided interest and participation in such Protective Advance in proportion to its Applicable Percentage. From and after the date, if any, on which any Lender is required to fund its participation in any Protective Advance purchased hereunder, the Administrative Agent shall promptly distribute to such Lender, such Lender’s Applicable Percentage of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Protective Advance.

     SECTION 2.05. Swingline Loans. (a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrowers, from time to time during the Availability Period, in dollars to the US Borrower or in Euros to the Netherlands Borrower, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding the USD Equivalent of $15,000,000, (ii) the USD Equivalent of the Aggregate Credit Exposures with respect to the Borrowers exceeding the sum of the total Revolving Commitments, (iii) the USD Equivalent of the total Revolving Exposures with respect to the US Borrower exceeding the US Borrowing Base, (iv) the USD Equivalent of the total Revolving Netherlands Exposure with respect to the Netherlands Borrower exceeding the Netherlands Borrowing Base, or (v) the USD Equivalent of the total Revolving Euro Exposures with respect to the Borrowers exceeding the Euro Sublimit.; provided that (x) the Netherlands Borrower shall not be permitted to borrow more than €7,500,000 in Swingline Loans, (y) the Swingline Lender shall not be required to make

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a Swingline Loan to refinance an outstanding Swingline Loan, and (z) no Swingline Loans shall be made if any Lender or any Borrower has provided written notice to the Administrative Agent of the occurrence of a Default, unless such Default is waived pursuant to Section 9.02. Subject to Section 2.14, each Swingline Borrowing made in Euros shall be comprised entirely of Swingline Loans bearing interest at the Netherlands Swingline Rate. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Swingline Loans. To request a Swingline Loan, the Borrower Representative shall notify the Administrative Agent of such request by telephone (confirmed by facsimile), in the case of Swingline loans denominated in dollars, not later than noon, Chicago time, or in the case of Swingline Loans denominated in Euros, no later than 11:00 a.m., London time, on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower Representative. The Swingline Lender shall make each Swingline Loan available to the Borrowers by means of a credit to the applicable Funding Account(s) (provided, that such credit shall instead be, in the case at the time of such Borrowing full cash dominion is in effect pursuant to Article VII of the US Security Agreement, to the Collection Account) by 2:00 p.m., Chicago time in the case of the US Borrower, and 11:00 a.m., London time in the case of the Netherlands Borrower, on the requested date of such Swingline Loan.

          (b) The Swingline Lender may (i) on same Business Day written notice given to the Administrative Agent not later than 11:00 a.m., Chicago time, in the case of Swingline Loans denominated in dollars, or (ii) on three Business Day’s written notice given to the Administrative Agent not later than 11:00 a.m., London time, in the case of Swingline Loans denominated in Euros, require the Revolving Lenders to acquire participations in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate dollar and/or Euro amount of Swingline Loans in which Revolving Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Revolving Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or increase, reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Revolving Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Revolving Lenders. The Administrative Agent shall notify the Borrower Representative of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the US Borrower (or other party on behalf of such Borrower) in respect of a Swingline Loan made in dollars after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Revolving Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the US Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the US Borrower of any default in the payment thereof. Any amounts received by the Swingline Lender from the Netherlands

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Borrower (or other party on behalf of such Borrower) in respect of a Swingline Loan made in Euros after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Revolving Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Netherlands Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Netherlands Borrower of any default in the payment thereof.

          (c) Upon the making of a Swingline Loan (whether before or after the occurrence of a Default (which has been waived) and regardless of whether a Settlement has been requested with respect to such Swingline Loan), each Revolving Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Swingline Lender without recourse or warranty, an undivided interest and participation in such Swingline Loan in proportion to its Applicable Percentage of the Revolving Commitment. The Swingline Lender may, at any time, require the Revolving Lenders to fund their participations. From and after the date, if any, on which any Revolving Lender is required to fund its participation in any Swingline Loan purchased hereunder, the Administrative Agent shall promptly distribute to such Lender, such Lender’s Applicable Percentage of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Loan.

          (d) The Administrative Agent, on behalf of the Swingline Lender, shall request settlement (a “Settlement”) with the Revolving Lenders on at least a weekly basis or on any date that the Administrative Agent elects, by notifying the Revolving Lenders of such requested Settlement by facsimile, telephone, or e-mail no later than 12:00 noon Chicago time, in the case of Swingline Loans denominated in dollars, or 12:00 p.m., London time, in the case of Swingline Loans denominated in Euros, on the date of such requested Settlement (the “Settlement Date”). Each Revolving Lender (other than the Swingline Lender, in the case of the Swingline Loans) shall transfer the amount of such Revolving Lender’s Applicable Percentage of the outstanding principal amount of the applicable Loan with respect to which Settlement is requested to the Administrative Agent, to such account of the Administrative Agent as the Administrative Agent may designate, not later than 2:00 p.m., Chicago time, in the case of Swingline Loans denominated in dollars, or 2:00 p.m., London time, in the case of Swingline Loans denominated in Euros, on such Settlement Date. Settlements may occur during the existence of a Default and whether or not the applicable conditions precedent set forth in Section 4.02 have then been satisfied. Such amounts transferred to the Administrative Agent shall be applied against the amounts of the Swingline Lender’s Swingline Loans with respect to the applicable Borrower and, together with Swingline Lender’s Applicable Percentage of such Swingline Loan, shall constitute Revolving Loans of such Revolving Lenders, respectively. If any such amount is not transferred to the Administrative Agent by any Revolving Lender on such Settlement Date, the Swingline Lender shall be entitled to recover such amount on demand from such Lender together with interest thereon as specified in Section 2.07.

          SECTION 2.06. Letters of Credit. (a) General. Subject to the terms and conditions set forth herein, the Borrower Representative may request the issuance of Letters of Credit for its own account, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the US Borrower to, or entered into by the US Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

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          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), The US Borrower shall hand deliver or facsimile (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent (prior to noon, Chicago time, at least three Business Days prior to the requested date of issuance, amendment, renewal or extension or such shorter period as the Issuing Bank may agree) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the US Borrower also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the US Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $30,000,000, (ii) the USD Equivalent of the Aggregate Credit Exposures with respect to the Borrowers shall not exceed the sum of the total Revolving Commitments and (iii) the USD Equivalent of the total Revolving Exposures (excluding Revolving Netherlands Exposures) shall not exceed the US Borrowing Base. No Letter of Credit shall be issued if any Lender or any Borrower has provided written notice to the Administrative Agent of the occurrence of a Default, unless such Default is waived pursuant to Section 9.02

          (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit and (ii) the date that is five Business Days prior to the Maturity Date; provided, that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (ii) above).

          (d) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Revolving Lenders, the Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the US Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the US Borrower for any reason. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or increase, reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

          (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the US Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than noon, Chicago time, on the date that such LC Disbursement is made, if the US Borrower shall have received notice of such LC Disbursement prior to 9:00 a.m., Chicago time, on such date, or, if such notice has not been received by the US Borrower prior to such time on such date, then not later than noon, Chicago time, on (i) the

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Business Day that the US Borrower receives such notice, if such notice is received prior to 9:00 a.m., Chicago time, on the day of receipt, or (ii) the Business Day immediately following the day that the US Borrower receives such notice, if such notice is not received prior to such time on the day of receipt; provided that, the US Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the US Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing. If the US Borrower fails to make such payment when due, the Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the payment then due from the US Borrower in respect thereof and such Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Revolving Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the US Borrower, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Revolving Lenders. Promptly following receipt by the Administrative Agent of any payment from the US Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear. Any payment made by a Revolving Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the US Borrower of its obligation to reimburse such LC Disbursement.

          (f) Obligations Absolute. The US Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the US Borrower’s obligations hereunder. Neither the Administrative Agent, the Revolving Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the US Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the US Borrower to the extent permitted by applicable law) suffered by the US Borrower that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or wilful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept

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and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

          (g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the applicable Borrower by telephone (confirmed by facsimile) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the US Borrower of its obligation to reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.

          (h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then, unless the US Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the US Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that, if the US Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.13(d) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.

          (i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any time by written agreement among the US Borrower, the Administrative Agent and the successor Issuing Bank. The Administrative Agent shall notify the Revolving Lenders of any such replacement of the Issuing Bank. At the time any such replacement shall become effective, the US Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b). From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

          (j) Cash Collateralization. If any Event of Default shall occur and be continuing, on the Business Day that the US Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Revolving Lenders with LC Exposure representing greater than 50% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the US Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Revolving Lenders (the “LC Collateral Account”), an amount in cash equal to 103% of the LC Exposure as of such date plus accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to any Borrower described in clause (h) or (i) of Article VII. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Secured Obligations. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account and the US Borrower hereby grants the Administrative Agent a security interest in the LC Collateral Account. Other

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than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the US Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the US Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Lenders with LC Exposure representing greater than 50% of the total LC Exposure), be applied to satisfy other Secured Obligations. If the US Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the US Borrower within three Business Days after all such Defaults have been cured or waived.

          SECTION 2.07.    Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 1:00 p.m., Local Time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders in an amount equal to such Lender’s Applicable Percentage; provided that Swingline Loans shall be made as provided in Section 2.05. The Administrative Agent will make such Loans available to the applicable Borrower by promptly crediting the amounts so received, in like funds, to the Funding Account(s); provided that (A) Loans made to finance the reimbursement of (i) an LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing Bank and (ii) a Protective Advance shall be retained by the Administrative Agent, and (B) in the case at the time of such Borrowing full cash dominion is in effect pursuant to Article VII of the US Security Agreement, all Loans to the US Borrower shall be credited to the Collection Account.

          (b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the applicable Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower requesting such Borrowing severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the applicable Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case such Borrower, with respect to a Borrowing made in dollars, the interest rate applicable to ABR Loans and, with respect to a Borrowing made in Euros, at an interest rate applicable to Eurocurrency Borrowings having an Interest Period of one month. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

          SECTION 2.08.    Interest Elections. (a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing Notice in accordance with the terms hereof and, in the case of a Eurocurrency Borrowing, shall have an initial Interest Period as specified in such Borrowing Notice. Thereafter, the Borrower Representative may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurocurrency Borrowing, may elect Interest Periods therefor, all as provided in this Section; provided that, subject to Section 2.14, Borrowings made in Euros may not be converted to a different Type. The Borrower Representative may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each

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such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Borrowings or Protective Advances, which may not be converted or continued.

          (b) To make an election pursuant to this Section, the Borrower Representative shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Notice would be required under Section 2.03 if the Borrowers were requesting a Revolving Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower Representative.

          (c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

                    (i) the Borrower and the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

     (ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

     (iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and

     (iv) if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurocurrency Borrowing but does not specify an Interest Period, then the Borrowers shall be deemed to have selected an Interest Period of one month’s duration.

          (d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

          (e) If the Borrower Representative fails to deliver a timely Interest Election Request with respect to a Eurocurrency Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall, in the case of a Borrowing made in dollars, be converted to an ABR Borrowing and, in the case of a Borrowing made in Euros, converted to a Eurocurrency Borrowing with an Interest Period of one month. Notwithstanding any contrary provision hereof, if a Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower Representative, then, so long as a Default is continuing (i) no outstanding Borrowing made in dollars may be converted to or continued as a Eurocurrency Borrowing and (ii) unless repaid, each Eurocurrency Borrowing shall, in the case of a Borrowing made in dollars, be converted to an ABR Borrowing and, in the case of a Borrowing made in Euros, continued with an Interest Period of one month, in each case, at the end of the Interest Period applicable thereto.

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          SECTION 2.09.    Reduction or Termination of Commitments. (a) Unless previously terminated, all Commitments shall terminate on the Maturity Date.

          (b) The Borrowers shall have the right, upon not less than three Business Days’ notice to the Administrative Agent, from time to time, to reduce the amount of the Commitments; provided that no such reduction of Commitments shall be permitted if, after giving effect thereto and to any prepayments of the Loans made on the effective date thereof, the Availability with respect to either Borrower would be less than zero. Any such reduction shall be in an amount equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently the Commitments then in effect.

          (c) The Borrowers may at any time terminate the Commitments upon (i) the payment in full of all outstanding Loans, together with accrued and unpaid interest thereon and on any Letters of Credit, (ii) the cancellation and return of all outstanding Letters of Credit (or alternatively, with respect to each such Letter of Credit, the furnishing to the Administrative Agent of a cash deposit (or at the discretion of the Administrative Agent a back up standby letter of credit satisfactory to the Administrative Agent) equal to 103% of the LC Exposure as of such date), (iii) the payment in full of the accrued and unpaid fees and (iv) the payment in full of all outstanding reimbursable expenses and other Obligations together with accrued and unpaid interest thereon.

          (d) The Borrower Representative shall notify the Administrative Agent of any election to terminate the Commitments under paragraph (c) of this Section at least three Business Days prior to the effective date of such termination or such shorter period as may be agreed by the Administrative Agent, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower Representative pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower Representative may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower Representative (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination of the Commitments shall be permanent.

          SECTION 2.10.    Repayment and Amortization of Loans; Evidence of Debt (a) Each Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan made to such Borrower on the Maturity Date, (b) the US Borrower unconditionally promises to pay to the Administrative Agent the then unpaid amount of each Protective Advance on the earlier of the Maturity Date and demand by the Administrative Agent, (c) the US Borrower hereby unconditionally promises to pay to the Swingline Lender the then unpaid principal amount of each Swingline Loan in dollars on the earlier of the Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least four Business Days after such Swingline Loan is made and (d) the Netherlands Borrower hereby unconditionally promises to pay the Swingline Lender the then unpaid principal amount of each Swingline Loan in Euros on the earlier of the Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least four Business Days after such Swingline Loan is made.

          (b) At all times that full cash dominion is in effect pursuant to Article VII of the US Security Agreement, on each Business Day, the Administrative Agent shall apply all immediately available funds credited to the Collection Account in respect of each applicable Borrower the previous Business Day first with respect to the U.S. Borrower, to prepay any Protective Advances that may be outstanding, second to prepay the Revolving Loans (including Swing Line Loans) made to such Borrower and third to cash collateralize outstanding LC Exposure in respect of such Borrower.

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          (c) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of each Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

          (d) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from each Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

          (e) The entries made in the accounts maintained pursuant to paragraph (c) or (d) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of any Borrower to repay the Loans in accordance with the terms of this Agreement.

          (f) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower to which such Loan is made shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns) except to the extent that such Lender returns such promissory note or notes for cancellation and requests that such Loans be evidenced as set forth in Section 2.10(c) and (d).

          SECTION 2.11.    Prepayment of Loans. (a) Each Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with paragraph (f) of this Section.

          (b) Notwithstanding Section 2.10(b), and without limitation thereof, except to the extent resulting from changes of the Exchange Rate for Euros after the immediately preceding Reset Date, in the event and on such occasion that (i) the USD Equivalent of the Aggregate Credit Exposure with respect to the Borrowers exceeds the sum of the total Revolving Commitments, (ii) the USD Equivalent of the Revolving Exposures (excluding Revolving Netherlands Exposure) exceeds the US Borrowing Base, (iii) the USD Equivalent of the total Revolving Euro Exposures with respect to the Borrowers exceeds the Euro Sublimit, (iv) the USD Equivalent of the total Revolving Netherlands Exposure with respect to the Netherlands Borrower exceeds the sum of the total Revolving Netherlands Sublimit, (v) the USD Equivalent of the total Revolving Netherlands Exposure relating to the Netherlands Borrower exceeds the Netherlands Borrowing Base or (vi) the USD Equivalent of the total Revolving Exposures relating to the Netherlands Borrower exceeds the Libbey Europe Sublimit then each such Borrower shall prepay its Revolving Loans, LC Exposure and/or Swingline Loans in an aggregate USD Equivalent amount equal, when taken together with any contemporaneous prepayment by the other Borrower, to such excess.

          (c) In the event and on each occasion that any Net Proceeds are received by or on behalf of any Loan Party in respect of any Prepayment Event, the Borrowers shall, immediately after such Net Proceeds are received by any Loan Party, prepay the Obligations as set forth in Section 2.11(d) below in an aggregate amount equal to 100% of such Net Proceeds; provided that any Net Proceeds received in respect of a Prepayment Event arising with respect to assets of the Netherlands Borrower or any of its

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Subsidiaries organized under the laws of the Netherlands shall only be applied to the mandatory prepayment of the Netherlands Loans.

          (d) All such amounts pursuant to Section 2.11(c) shall be applied, first to prepay any Protective Advances with respect to the applicable Borrower that may be outstanding, pro rata, and second to prepay the Revolving Loans (including Swing Line Loans) without any reduction in Revolving Commitments.

          (e) The Borrower Representative shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by facsimile) of any prepayment hereunder other than any prepayment pursuant to Section 2.10(b) or 2.11(b) (i) in the case of prepayment of a Eurocurrency Borrowing, not later than noon, Local Time, three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than noon, Local Time, one Business Day before the date of the prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than noon, Local Time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09. Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13.

          SECTION 2.12.    Fees. (a) The US Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee, which shall accrue at the Applicable Rate on the average daily amount of such Lender’s Applicable Percentage of the Available Commitment during the period from and including the Effective Date to but excluding the date on which the Lenders’ Commitments terminate. Accrued commitment fees shall be payable in arrears on the first day of each April, July, October and January and on the date on which the Commitments terminate, commencing on the first such date to occur after the date hereof. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed.

          (b) The US Borrower agrees to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the same Applicable Rate used to determine the interest rate applicable to Eurocurrency Revolving Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Revolving Commitment terminates and the date on which such Revolving Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of each calendar month shall be payable on the third Business Day following such last day, commencing on July 16, 2006; provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on

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which the Commitments terminate shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within 10 Business Days after written demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed.

          (c) The Borrowers jointly and severally agree to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrowers and the Administrative Agent.

          (d) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders. Fees paid shall not be refundable under any circumstances.

          SECTION 2.13.    Interest. (a) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.

          (b) The Loans comprising each Eurocurrency Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

          (c) Each Protective Advance shall bear interest at the Alternate Base Rate plus the Applicable Rate for Revolving Loans plus 2%; provided that any Protective Advance made in Euros shall bear interest at an interest rate reasonably determined by the Administrative Agent to compensate the applicable Lenders for such Borrowing in Euros for the applicable period plus 2%.

          (d) Notwithstanding the foregoing, during the occurrence and continuance of (A) an Event of Default, upon notice by the Required Lenders to the Borrower Representative (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 9.02 requiring the consent of “each Lender affected thereby” for reductions in interest rates) or (B) a Default of the type described in Section 8(a), (h) or (i), (X) all Loans shall bear interest at 2% plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section and (Y) any participation fee payable pursuant to Section 2.12 with respect to participations in Letters of Credit shall accrue at 2% plus the Applicable Rate used to determine the interest rate applicable to Eurocurrency Revolving Loans as provided hereunder. Notwithstanding the foregoing, if any interest on any Loan or any fee or other amount (other than in respect of principal of the Loans or any participation fee payable pursuant to Section 2.12 with respect to participations in Letters of Credit) payable by the Borrowers hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of this Section.

          (e) Accrued interest on each Loan (for ABR Loans, accrued through the last day of the prior calendar month) shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments; provided that (i) interest accrued pursuant to the proviso to paragraph (c) or paragraph (d) of this Section or otherwise at an interest rate reasonably determined by the Administrative Agent shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurocurrency Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

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          (f) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate or by reference to an interest rate reasonably determined by the Administrative Agent shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed. The applicable Alternate Base Rate, Adjusted LIBO Rate, LIBO Rate or any other interest rate applicable in accordance with the terms hereof shall be determined by the Administrative Agent in accordance with the terms hereof, and such determination shall be conclusive absent manifest error.

          SECTION 2.14.    Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurocurrency Borrowing:

          (a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or

          (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower Representative and the Lenders by telephone or facsimile as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower Representative and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Revolving Borrowing to, or continuation of any Revolving Borrowing as, a Eurocurrency Borrowing shall be ineffective, (ii) if any Borrowing Notice requests a Eurocurrency Borrowing denominated in dollars, such Borrowing shall be made as an ABR Borrowing and (iii) if any Borrowing Notice requests a Eurocurrency Borrowing denominated in Euros, such Borrowing shall be made as a Borrowing bearing interest at an interest rate reasonably determined by the Administrative Agent to compensate the applicable Lenders for such Borrowing in Euros for the applicable period.

            SECTION 2.15.    Increased Costs. (a) If any Change in Law shall:

     (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or

     (ii) impose on any Lender or the Issuing Bank or the London interbank market any other condition affecting this Agreement or Eurocurrency Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurocurrency Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or otherwise), then such Borrower will pay to such Lender or the Issuing Bank, as the case may be, the minimum additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.

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          (b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on a Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), then from time to time such Borrower will pay to such Lender or the Issuing Bank, as the case may be, the minimum additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.

          (c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower Representative and shall be conclusive absent manifest error. Such Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 Business Days after receipt thereof.

          (d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided that such Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower Representative of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

          SECTION 2.16.    Break Funding Payments. In the event of (a) the payment of any principal of any Eurocurrency Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurocurrency Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.09(c) and is revoked in accordance therewith), or (d) the assignment of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower Representative pursuant to Section 2.19, then, in any such event, such Borrower shall compensate each affected Lender for the loss, cost and expense actually incurred by such Lender and attributable to such event. In the case of a Eurocurrency Loan, such loss, cost or expense to any Lender shall not exceed an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the Eurocurrency market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower Representative and shall be conclusive absent manifest error. Such Borrower shall pay such Lender the amount shown as due on any such certificate within 10 Business Days after receipt thereof.

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          SECTION 2.17.    Taxes. (a) Any and all payments by or on account of any obligation of the Borrowers hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if a Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions and (iii) such Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

          (b) The Borrowers shall pay any Other Taxes applicable to such Borrower to the relevant Governmental Authority in accordance with applicable law.

          (c) Each Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of such Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower Representative by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest error.

          (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by a Borrower to a Governmental Authority, the Borrower Representative shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

          (e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which a Borrower to which it makes a loan is organized or a resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower Representative (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower Representative, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrower Representative as will permit such payments to be made without withholding or at a reduced rate of withholding.

          (f) If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by a Borrower or with respect to which such Borrower has paid additional amounts pursuant to this Section 2.17, it shall pay over such refund to such Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by such Borrower under this Section 2.17 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that such Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to such Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental

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Authority. This Section shall not be construed to require the Administrative Agent or any Lender to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to the Borrowers or any other Person.

          (g) Each Lender that makes a Loan to the US Borrower that is not a Foreign Lender with respect to the US Borrower shall deliver to the Borrower Representative (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower Representative, a properly completed and executed IRS Form W-9 (or applicable successor form) certifying that such Lender is not subject to backup withholding.

          (h) If, at the time any Lender is requested to make any Loan hereunder, the then outstanding principal balance of all Loans and outstanding Letters of Credit is less than $4,000,000 (such requested Loan, a “Taxable Advance”), Borrowers shall pay any applicable mortgage recording tax, to the extent required by applicable law, on that portion of the Taxable Advance which equals the difference between such then outstanding principal balance of all Loans and outstanding Letters of Credit prior to the Taxable Advance and $4,000,000. As of the date such Taxable Advance is requested, the Borrowers shall furnish Administrative Agent with such documentation and affidavits as Administrative Agent shall reasonably request together with an affidavit, substantially in the form of Exhibit M attached hereto, signed by a Financial Officer, stating that all applicable mortgage recording tax, to the extent required by applicable law, due in connection with such Taxable Advance has been paid. Any such Taxable Advance shall thereafter be deemed to be the last amount repaid of the then principal balance of all Loans outstanding.

          SECTION 2.18.    Payments Generally; Allocation of Proceeds; Sharing of Set-offs. (a) Each Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 2:00 p.m., Chicago time, in the case of Loans denominated in dollars, or 2:00 p.m., London time, in the case of Loans denominated in Euros, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 120 South LaSalle Street, Chicago, Illinois, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars or Euros, as applicable. At all times that full cash dominion is in effect pursuant to Article VII of the US Security Agreement, solely for purposes of determining the amount of Loans available for borrowing purposes, checks (in addition to immediately available funds applied pursuant to Section 2.10(b)) from collections of items of payment and proceeds of any Collateral pledged to secure any Borrower’s Obligations shall be applied in whole or in part against such Borrower’s Obligations, on the Business Day after receipt, subject to actual collection.

          (b) Subject to Section 9.20 hereof, any proceeds of Collateral received by the Administrative Agent on behalf of any Borrower or any Loan Party (shall, if received in its capacity as a depositing bank be applied as set forth in the applicable Deposit Account Control Agreement) and any other such proceeds (i) not constituting either (A) a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which shall be applied as specified by the Borrower making

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such payment), (B) a mandatory prepayment (which shall be applied in accordance with Section 2.11) or (C) amounts to be applied from the Collection Account when full cash dominion is in effect (which shall be applied in accordance with Section 2.10(b)) or (ii) after an Event of Default has occurred and is continuing, such funds shall be applied ratably first, to pay any fees, indemnities, or expense reimbursements then due including amounts then due to the Administrative Agent and the Issuing Bank from such Borrower (other than in connection with Banking Services or Swap Obligations), second, to pay any fees or expense reimbursements then due to the Lenders from such Borrower (other than in connection with Banking Services or Swap Obligations), third, to pay interest due in respect of the Protective Advances made to or on behalf of such Borrower, fourth, to pay the principal of such Protective Advances, fifth, to pay interest then due and payable on the Loans (other than the Protective Advances) ratably, sixth, to prepay principal on the Loans made to or on behalf of such Borrower (other than the Protective Advances and unreimbursed LC Disbursements in respect of Letters of Credit requested by such Borrower), seventh, to pay an amount to the Administrative Agent equal to one hundred three percent (103%) of the aggregate undrawn face amount of all outstanding Letters of Credit requested by such Borrower and the aggregate amount of any unpaid LC Disbursements in respect of Letters of Credit requested by such Borrower, to be held as cash collateral for such Obligations, eighth, to payment of any amounts owing with respect to Banking Services Obligations and Swap Obligations of such Borrower, and ninth, to the payment of any other Secured Obligation due to the Administrative Agent or any Lender by such Borrower. Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrower Representative and except as set forth in Section 2.01(c), Section 2.10 and Section 2.11, or unless an Event of Default is in existence, neither the Administrative Agent nor any Lender shall apply any payment which it receives to any Eurocurrency Loan of a Class made to any Borrower, except (a) on the expiration date of the Interest Period applicable to any such Eurocurrency Loan or (b) in the event, and only to the extent, that there are no outstanding ABR Loans of the same Class and, in any such event, such Borrower shall pay the break funding payment required in accordance with Section 2.16. The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations of such Borrower.

          (c) At the election of the Administrative Agent, all payments of principal, interest, LC Disbursements, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees and expenses pursuant to Section 9.03), and other sums payable under the Loan Documents by any Borrower, may be paid from the proceeds of Borrowings made hereunder by such Borrower whether made following a request by the Borrower Representative pursuant to Section 2.03 or a deemed request as provided in this Section or may be deducted from any deposit account of such Borrower maintained with the Administrative Agent. Each Borrower hereby irrevocably authorizes (i) the Administrative Agent to make a Borrowing by such Borrower for the purpose of paying each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents (after the expiration of any grace or cure periods with respect to such other amounts) by such Borrower and agrees that all such amounts charged shall constitute Loans (including Swingline Loans, but such a Borrowing may only constitute a Protective Advance if it is to reimburse costs, fees and expenses as described in Section 9.03) and that all such Borrowings shall be deemed to have been requested by such Borrower pursuant to Sections 2.03, 2.04 or 2.05, as applicable and (ii) the Administrative Agent to charge any deposit account of such Borrower maintained with the Administrative Agent for each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents by such Borrower.

          (d) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and accrued interest thereon than the

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proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by any Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to such Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). Subject to Section 9.20 hereof, each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.

     (e) Unless the Administrative Agent shall have received notice from the Borrower Representative prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that any Borrower will not make such payment, the Administrative Agent may assume that such Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if such Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

     (f) If any Lender shall fail to make any payment required to be made by it hereunder, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations hereunder until all such unsatisfied obligations are fully paid; provided that as between the Loan Parties, the Administrative Agent and such Lender, such amounts received by the Administrative Agent and paid by the Loan Parties for the account of such Lender shall be considered applied to the obligations intended to be paid by the Loan Parties.

      SECTION 2.19.    Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests compensation under Section 2.15, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then:

     (i) such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (x) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (y) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender (and such Borrower hereby agree to pay all reasonable

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costs and expenses incurred by any Lender in connection with any such designation or assignment);

     (ii) such Borrower may, at their sole expense and effort, require such Lender or any Lender that defaults in its obligation to fund Loans hereunder (herein, a “Departing Lender”), upon notice to the Departing Lender and the Administrative Agent, to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (x) such Borrower shall have received the prior written consent of the Administrative Agent (and if a Revolving Commitment is being assigned, the Issuing Bank), which consent shall not unreasonably be withheld, (y) the Departing Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or such Borrower (in the case of all other amounts) and (z) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments. A Departing Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling a Borrower to require such assignment and delegation cease to apply.

                (b) If any Lender (such Lender, a “Non-Consenting Lender”) has failed to consent to a proposed amendment or waiver which pursuant to the terms of Section 9.02 requires the consent of all Lenders or of all Lenders directly affected thereby and with respect to which the Required Lenders shall have granted their consent, then the US Borrower shall be permitted to replace such Non-Consenting Lender (unless such Non-Consenting Lender grants such consent); provided that (i) such replacement does not conflict with any Requirement of Law, (ii) the replacement financial institution shall purchase, at par, all Loans and other amounts owing to such replaced Lender on or prior to the date of replacement, (iii) the Borrower shall be liable to such replaced Lender under Section 2.16 if any Eurocurrency Loan owing to such replaced Lender shall be purchased other than on the last day of the Interest Period relating thereto, (iv) the replacement financial institution shall be reasonably satisfactory to the Administrative Agent, (v) the replaced Lender shall be obligated to make such replacement in accordance with the provisions of Section 9.04 (provided that the Borrower shall be obligated to pay the registration and processing fee referred to therein), and (vi) any such replacement shall not be deemed to be a waiver of any rights that the US Borrower, the Administrative Agent or any other Lender shall have against the replaced Lender.

                SECTION 2.20.    Returned Payments. If after receipt of any payment which is applied to the payment of all or any part of the Obligations of any Borrower, the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender. The provisions of this Section 2.20 shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance

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upon such payment or application of proceeds. The provisions of this Section 2.20 shall survive the termination of this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

          Each Loan Party represents and warrants to the Lenders that after giving effect to the transactions on the Effective Date, including the Acquisition:

          SECTION 3.01.    Organization; Powers. Each of the Loan Parties and each of its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization (to the extent the concept of “good standing” is recognized thereunder), (b) except where the failure to have such power and authority could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, has all requisite power and authority to carry on its business as now conducted and is qualified to do business in, and (c) is in good standing in, every jurisdiction where such qualification is required except where the failure to be in good standing could not reasonably be expected to result in a Material Adverse Effect.

          SECTION 3.02.    Authorization; Enforceability. The Transactions are within each Loan Party’s corporate or organizational powers and have been duly authorized by all necessary organizational and, if required, stockholder action. The Loan Documents to which each Loan Party is a party have been duly executed and delivered by such Loan Party and constitute a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

          SECTION 3.03.    Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents, (b) will not violate any Requirement of Law applicable to any Loan Party or any of its Subsidiaries, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Loan Party or any of its Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by any Loan Party or any of its Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any asset of any Loan Party or any of its Subsidiaries, except Liens created pursuant to the Loan Documents except, in each case, as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

          SECTION 3.04.    Financial Condition; No Material Adverse Change. (a) Holdings has heretofore furnished to the Lenders its consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the fiscal year ended December 31, 2005, reported on by Ernst & Young, independent public accountants, and (ii) as of and for the fiscal quarter and the portion of the fiscal year ended March 31, 2006, certified by its chief financial officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of Holdings and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above.

          (b) No event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect, since December 31, 2005.

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          SECTION 3.05. Properties. (a) As of the date of this Agreement, Schedule 3.05 (i) sets forth the address of each parcel of real property that is owned or leased by any Loan Party (other than Holdings) and (ii) identifies any such parcel of owned real property with respect to which the Loan Documents will not, as of the Effective Date, create legal and valid Liens on such parcel of real property and all of the buildings, improvements, structures and fixtures located on such parcel of real property in accordance with the terms and conditions of the Loan Documents (each, a “Non-Mortgaged Property”). Except as could not reasonably be expected to have a Material Adverse Effect, each of such leases and subleases is valid and enforceable in accordance with its terms and is in full force and effect, and, to the knowledge of the applicable Loan Party, no default by any party to any such lease or sublease exists. Each of the Loan Parties and its Subsidiaries has good and marketable title to, or valid leasehold interests in, all its real and personal property, free of all Liens other than those permitted by Section 6.02.

          (b) Except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, each Loan Party and its Subsidiaries owns, or is licensed to use, all Intellectual Property used in its business as currently conducted, a correct and complete list of which, as of the date of this Agreement, is set forth on Schedule 3.05, and the use thereof by the Loan Parties and its Subsidiaries does not infringe in any material respect upon the rights of any other Person, and the Loan Parties’ rights thereto are not subject to any licensing agreement or similar arrangement.

          SECTION 3.06. Litigation and Environmental Matters. (a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of any Loan Party, threatened against or affecting the Loan Parties or any of their Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that directly involve this Agreement or the Transactions.

          (b) Except for the Disclosed Matters and except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, (i) no Loan Party nor any of its Subsidiaries has received notice of any claim with respect to any Environmental Liability or knows of any basis for any Environmental Liability and (ii) no Loan Party nor any of its Subsidiaries (1) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law or (2) has become subject to any Environmental Liability.

          (c) Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

          SECTION 3.07. Compliance with Laws and Agreements. (a) Each Loan Party and its Subsidiaries is in compliance with all Requirements of Law applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing.

          (b) If the Netherlands Borrower or any Netherlands Loan Guarantor is a credit institution (kredietinstelling) under the Netherlands Banking Act, such party is in compliance with the applicable provisions of the Netherlands Banking Act and any implementing regulation, including the Netherlands Exemption Regulation.

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          SECTION 3.08. Investment Company Status. No Loan Party nor any of its Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

          SECTION 3.09. Taxes. Except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, each Loan Party and its Subsidiaries has timely filed or caused to be filed all federal and other material Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes shown thereon, except Taxes that are being contested in good faith by appropriate proceedings and for which such Loan Party or such Subsidiary, as applicable, has established adequate reserves determined in accordance with GAAP. There are no proposed Tax deficiencies or assessments that, in the aggregate, are material to each Loan Party and its Subsidiaries, taken as a whole. There are no liens for any material Taxes on any assets of each Loan Party and its Subsidiaries.

          SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. Except as could not reasonably be expected to have a Material Adverse Effect, the present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, either individually or together with one or more such Plans, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan or Plans.

          SECTION 3.11. Disclosure. Neither the information contained in the Information Memorandum nor in any of the other reports, the financial statements, certificates or other information (including public filings of Holdings) furnished by or on behalf of the any Loan Party to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document (as modified or supplemented by other information so furnished) taken as a whole contains any untrue statement of a material of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which such statements were made not misleading; provided that, with respect to pro forma and projected financial information, the Borrowers and Holdings represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time delivered in light of the circumstances when made and, if such pro forma and projected financial information was delivered prior to the Effective Date, as of the Effective Date.

          SECTION 3.12. Reserved

          SECTION 3.13. Solvency. (a) Immediately after the consummation of the Transactions to occur on the Effective Date, each Loan Party will be Solvent, (i) the fair value of the assets of such Loan Party, at a fair valuation, at such time exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of such Loan Party at such time are greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) such Loan Party at such time is able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) such Loan Party at such time does not have unreasonably small capital with which to conduct the business in which it is engaged as such business is then conducted and is proposed to be conducted thereafter.

          (b) No Loan Party intends to, or will permit any of its Subsidiaries to, and no Loan Party believes that it or any of its Subsidiaries will, incur debts beyond its ability to pay such debts as they

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mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.

          SECTION 3.14. Insurance. Schedule 3.14 sets forth a description of all insurance maintained by or on behalf of the Loan Parties and the Subsidiaries as of the Effective Date. As of the Effective Date, all premiums in respect of such insurance have been paid. The Borrowers and Holdings believe that the insurance maintained by or on behalf of the US Borrower and its Subsidiaries is adequate.

          SECTION 3.15. Capitalization and Subsidiaries. As of the Effective Date, Schedule 3.15 sets forth (a) a correct and complete list of the name and relationship to Holdings of each and all of Holdings’ Subsidiaries, (b) a true and complete listing of each class of each of the Loan Parties’ authorized Equity Interests, of which all of such issued shares are validly issued, outstanding, fully paid and non-assessable, and owned beneficially and of record by the Persons identified on Schedule 3.15, and (c) the type of entity of Holdings and each of its Subsidiaries. All of the issued and outstanding Equity Interests owned by any Loan Party has been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and is fully paid and non-assessable.

          SECTION 3.16. Security Interest in Collateral. The provisions of this Agreement and the other Loan Documents create legal and valid Liens on all the Collateral in favor of the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, and such Liens constitute perfected and continuing Liens on the Collateral, securing, in the case of the Liens created under the US Collateral Documents, the Secured Obligations and, in the case of the Liens created under the Netherlands Collateral Documents, the Netherlands Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except in the case of (a) liens permitted by Section 6.02, to the extent any such liens would have priority over the Liens in favor of the Administrative Agent pursuant to any applicable law or agreement and (b) Liens perfected only by possession (including possession of any certificate of title) to the extent the Administrative Agent has not obtained or does not maintain possession of such Collateral, and provided that, with respect to the Netherlands Collateral Documents, any required notification (mededeling), registration (registratie of inschrijving) or waiver (afstand van recht), as contemplated by the Netherlands Collateral Documents for purposes of the perfection of the security interests purported to be created by such documents, has been duly and timely made, completed or obtained.

          SECTION 3.17. Employment Matters. As of the Effective Date, except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, there are no strikes, lockouts or slowdowns against any Loan Party or any Subsidiary pending or, to the knowledge of the Borrowers, threatened. The hours worked by and payments made to employees of the Loan Parties and the Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. Except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, all payments due from any Loan Party or any Subsidiary, or for which any claim may be made against any Loan Party or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of the Loan Party or such Subsidiary.

          SECTION 3.18. Common Enterprise. The successful operation and condition of each of the Loan Parties is dependent on the continued successful performance of the functions of the group of the Loan Parties as a whole and the successful operation of each of the Loan Parties is dependent on the successful performance and operation of each other Loan Party. Each Loan Party expects to derive benefit (and its board of directors or other governing body has determined that it may reasonably be

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expected to derive benefit), directly and indirectly, from (i) successful operations of each of the other Loan Parties and (ii) the credit extended by the Lenders to the Borrowers hereunder, both in their separate capacities and as members of the group of companies. Each Loan Party has determined that execution, delivery, and performance of this Agreement and any other Loan Documents to be executed by such Loan Party and each of the other Transactions is within its purpose, will be of direct and indirect benefit to such Loan Party, and is in its best interest.

          SECTION 3.19. Intellectual Property. Except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, each Loan Party and its Subsidiaries owns, or is licensed to use, all Intellectual Property necessary for the conduct of its business as currently conducted. No material claim has been asserted and is pending by any Person challenging or questioning the use of any Intellectual Property or the validity or effectiveness of any Intellectual Property in any respect that could reasonably be expected to have a Material Adverse Effect, nor does any Loan Party or its Subsidiaries know of any valid basis for any such claim. Except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, the use of Intellectual Property by each Loan Party and its Subsidiaries does not infringe on the rights of any Person in any material respect.

          SECTION 3.20. Federal Regulations. No part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used for “buying” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulations of the Board. If requested by any Lender or the Administrative Agent, the relevant Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in Regulation U.

          SECTION 3.21. Senior Indebtedness. The Obligations of the US Loan Parties constitute permitted secured “Indebtedness” qualifying as “Pari Passu Indebtedness” or “Guarantor Pari Passu Indebtedness”, as applicable, under the Second Lien Senior Notes Indenture (as each such term is defined thereunder) and permitted secured “Indebtedness” qualifying as “Senior Indebtedness” or “Guarantor Senior Indebtedness”, as applicable, under the Third Lien Senior Notes Indenture (as each such term is defined thereunder).

ARTICLE IV

CONDITIONS

          SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

     (a) Credit Agreement and Loan Documents; Legal Opinions. The Administrative Agent (or its counsel) shall have received (i) from each party hereto either (A) a counterpart of this Agreement signed on behalf of such party or (B) written evidence satisfactory to the Administrative Agent (which may include facsimile transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement and (ii) duly executed copies of the other Loan Documents (other than Loan Documents including Mortgages in respect of the Non-Mortgaged Properties that pursuant to the express terms thereof are not contemplated to be executed and delivered on the Effective Date) and such other certificates, documents, instruments and agreements as the Administrative Agent shall reasonably request in connection with the transactions contemplated by this Agreement and such other Loan Documents, including

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any promissory notes requested by a Lender pursuant to Section 2.10 payable to the order of each such requesting Lender and (iii) written opinion(s) of (A) the Loan Parties’ special New York and Dutch counsels and (B) the Administrative Agent’s special Dutch counsel, in each case, addressed to the Administrative Agent, the Issuing Bank and the Lenders.

     (b) Financial Statements and Projections. The Lenders shall have received (i) audited consolidated financial statements of Holdings for the December 31, 2004 and December 31, 2005 fiscal years, (ii) unaudited interim consolidated financial statements of Holdings for each fiscal quarter ended after the date of the latest applicable financial statements delivered pursuant to clause (i) of this paragraph as to which such financial statements are available, and (iii) satisfactory projections through 2010.

     (c) Closing Certificates; Certified Certificate of Incorporation; Good Standing Certificates. The Administrative Agent shall have received (i) a certificate of each Loan Party, dated the Effective Date and executed by its Secretary or Assistant Secretary or, as the case may be, its managing directors, which shall (A) certify the resolutions of its Board of Directors, members or other body authorizing the execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by name and title and bear the signatures of the Financial Officers and any other officers of such Loan Party, or such other Persons authorized to sign on behalf of such Loan Party, authorized to sign the Loan Documents to which it is a party, and (C) contain appropriate attachments, including, if applicable, the certificate or articles of incorporation or organization of each Loan Party certified, if applicable, by the relevant authority of the jurisdiction of organization of such Loan Party and a true and correct copy of its by-laws or operating, management or partnership agreement or, as the case may be, its articles of association, and (ii) to the extent available in such jurisdiction, a long form good standing certificate for each Loan Party from its jurisdiction of organization.

     (d) No Default Certificate. The Administrative Agent shall have received a certificate, signed by a financial officer of Holdings, on the initial Borrowing date (i) stating that no Default has occurred and is continuing, and (ii) stating that the representations and warranties contained in Article III are true and correct as of such date.

     (e) Fees. The Lenders and the Administrative Agent shall have received all fees required to be paid, and all reasonable out-of-pocket expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel), on or before the Effective Date. All such amounts will be paid with proceeds of Loans made on the Effective Date and will be reflected in the funding instructions given by the Borrower Representative to the Administrative Agent on or before the Effective Date.

     (f) Lien Searches. Other than with regard to the Netherlands jurisdiction, the Administrative Agent shall have received the results of a recent lien search in each of the jurisdictions where assets of the Loan Parties are located, and such search shall reveal no liens on any of the assets of the Loan Parties except for liens permitted by Section 6.02 or discharged on or prior to the Effective Date pursuant to a pay-off letter or other documentation satisfactory to the Administrative Agent.

     (g) Pay-Off Letter. The Administrative Agent shall have received satisfactory pay-off letters for all existing Indebtedness to be repaid from the proceeds the initial Borrowing, confirming that all Liens upon any of the property of the Loan Parties constituting Collateral will be terminated concurrently with such payment and all letters of credit issued or guaranteed as part of such Indebtedness shall have been cash collateralized or supported by a Letter of Credit.

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     (h) Funding Accounts. The Administrative Agent shall have received a notice setting forth the deposit account(s) of each Borrower (with respect to such Borrower, a “Funding Account”) to which the Administrative Agent and the Lenders are authorized by the Borrowers to transfer the proceeds of any Borrowings by such Borrower requested or authorized pursuant to this Agreement.

     (i) Customer List. The Administrative Agent shall have received a true and complete Customer List.

     (j) Control Agreements. The Administrative Agent shall have received each Deposit Account Control Agreement with respect to Accounts held with the Administrative Agent required to be provided pursuant to Section 4.14 of the US Security Agreement.

     (k) Solvency. The Administrative Agent shall have received a solvency certificate with respect to all Loan Parties (other than Holdings) from a Financial Officer of the US Borrower and, with respect to Holdings, from a Financial Officer of Holdings to the effect that the Loan Parties are, and after giving effect to the Acquisition and the incurrence of all indebtedness and obligations being incurred in connection herewith and therewith (including the Senior Notes) will be and will continue to be Solvent.

     (l) Borrowing Base Certificate. The Administrative Agent shall have received an Aggregate Borrowing Base Certificate which calculates the Aggregate Borrowing Base and Borrowing Base Certificates which calculate the respective Borrowing Bases of the Borrowers, in each case as of the end of the most recent month which has ended at least 10 days prior to the Effective Date with customary supporting documentation and supplemental reporting reasonably satisfactory to the Administrative Agent.

     (m) Closing Availability. After giving effect to all Borrowings to be made on the Effective Date and the issuance of any Letters of Credit on the Effective Date and payment of all fees and expenses due hereunder, the Aggregate Availability (including, for purposes of this clause (m), the Specified Properties in the determination of the US Borrowing Base) plus cash and cash equivalents subject to a Deposit Account Control Agreement shall not be less than $40,000,000.

     (n) Senior Notes. The Borrowers shall have received gross proceeds of at least (i) $299,880,000 in consideration of the issuance of the new Second Lien Senior Notes and (ii) $99,960,000 in consideration of the issuance of the new Third Lien Senior Notes, both upon terms and conditions satisfactory to the Administrative Agent and the Lenders, and the Administrative Agent and the Lenders shall have received true copies of the executed Senior Notes Indentures and the Second Lien Registration Rights Agreement.

     (o) Pledged Stock; Stock Powers; Pledged Notes. The Administrative Agent shall have received (i) the certificates representing the shares of Capital Stock pledged pursuant to the US Security Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to the Administrative Agent pursuant to the US Security Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof.

     (p) Filings, Registrations and Recordings. Each document (including any Uniform Commercial Code financing statement) required by the Collateral Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to

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create in favor of the Administrative Agent, for the benefit of the Lenders, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 6.02), shall be in proper form for filing, registration or recordation.

     (q) Environmental Reports. The Administrative Agent shall have received an environmental review reports requested with respect to the real properties of each Loan Party specified by the Administrative Agent from firm(s) selected and engaged by the Administrative Agent, which review reports shall be acceptable to the Administrative Agent. Any environmental hazards or liabilities identified in any such environmental review reports shall indicate the Loan Parties’ plans with respect thereto.

     (r) Appraisals. The Administrative Agent shall have received appraisals of the Inventory, Equipment, Eligible Real Property and Post-closing Mortgaged Property of each Loan Party from an appraiser selected and engaged by the Administrative Agent, and prepared on a basis satisfactory to the Administrative Agent, such appraisals to include, without limitation, information required by applicable law and regulations, which appraisals shall be acceptable to the Administrative Agent.

     (s) Mortgages, etc. The Administrative Agent shall have received, with respect to each parcel of real property (other than any Non-Mortgaged Property) owned by a Loan Party (other than Holdings) in favor of the Administrative Agent, each of the following, in form and substance reasonably satisfactory to the Administrative Agent:

     (i) a Mortgage on such property which mortgage shall, upon recordation in the applicable filing office, create a valid and enforceable first priority Lien, subject to Liens permitted by Section 6.02, in favor of the Administrative Agent for the benefit of itself and the Lenders;

     (ii) except with respect to any parcel of real property located outside of the United States, ALTA or other mortgagee’s title policy;

     (iii) except with respect to any parcel of real property located outside of the United States, either (a) an ALTA survey prepared and certified to the Administrative Agent by a surveyor reasonably acceptable to the Administrative Agent or (b) a title insurance policy of the type referred to in clause (ii) above not containing an exception for any matter shown by a survey (except to the extent an existing survey has been provided and specifically incorporated into such title insurance policy);

     (iv) an opinion of counsel in the state in which such parcel of real property is located in form and substance and from counsel reasonably satisfactory to the Administrative Agent; and

     (v) such other information, documentation, and certifications as may be reasonably required by the Administrative Agent.

     (t) Insurance. The Administrative Agent shall have received evidence of insurance coverage in form, scope, and substance reasonably satisfactory to the Administrative Agent and otherwise in compliance with the terms of Section 4.12 of the Security Agreements.

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     (u) Letter of Credit Application. The Administrative Agent shall have received a properly completed letter of credit application if the issuance of a Letter of Credit will be required on the Effective Date.

     (v) Approvals. All governmental and third party approvals necessary in connection with the execution of the Loan Documents, the Transactions, the Acquisition and the continuing operations of each Borrower and its Subsidiaries shall have been obtained on terms reasonably satisfactory to the Administrative Agent, and shall be in full force and effect.

     (w) Due Diligence. The Administrative Agent shall have completed, and shall be satisfied with the results of, all business, legal, tax and regulatory due diligence, and the corporate structure, capital structure, other debt instruments, material accounts and governing documents of Holdings, each Borrower and its Subsidiaries (both before and after giving effect to the Acquisition) shall be acceptable to the Administrative Agent.

     (x) The Acquisition. The Acquisition shall have been consummated in accordance with the terms of the Acquisition Agreement (and no material terms shall have been waived or otherwise modified without the consent of the Administrative Agent, which consent shall not be unreasonably withheld) and there shall not be any pending or threatened legal or governmental proceedings with respect to the Acquisition. The Administrative Agent shall have received true copies of the executed Acquisition Agreement, all modifications thereof and all other material documentation related thereto.

     (y) The Administrative Agent shall have received all information and/or documentation that the Administrative Agent, in its reasonable discretion, considers necessary or desirable in connection with the Netherlands Collateral.

     (z) Other Documents. The Administrative Agent shall have received such other documents as the Administrative Agent, the Issuing Bank or their counsel may have reasonably requested, all in form and substance reasonably acceptable to the Administrative Agent, the Issuing Bank and their counsel.

The Administrative Agent shall notify the Borrowers and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 4:00 p.m., Chicago time, on June 16, 2006 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

          SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:

     (a) The representations and warranties of the Borrowers set forth in this Agreement that are qualified by materiality shall be true and correct and the representations and warranties that are not qualified by materiality shall be true and correct in all material respects on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable except to the extent that such representation or warranty expressly relates to an earlier date, in which case it shall be true and correct as of such date.

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     (b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.

     (c) After giving effect to any Borrowing or the issuance of any Letter of Credit, (i) the USD Equivalent of the Aggregate Credit Exposure does not exceed the sum of the total Revolving Commitments, (ii) the USD Equivalent of the total Revolving Exposures (excluding Revolving Netherlands Exposures) does not exceed the US Borrowing Base, (iii) the USD Equivalent of the total Revolving Euro Exposures with respect to the Borrowers does not exceed the Euro Sublimit, (iv) the USD Equivalent of the total Revolving Netherlands Exposures does not exceed the sum of the total Revolving Netherlands Sublimit, (v) the USD Equivalent of the total Revolving Netherlands Exposure does not exceed the Netherlands Borrowing Base and (vi) the USD Equivalent of the total Revolving Exposures relating to the Netherlands Borrower does not exceed the Libbey Europe Sublimit.

Except with respect to Protective Advances and the Settlement of Swingline Loans, each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrowers on the date thereof as to the matters specified in paragraphs (a), (b) and (c) of this Section.

ARTICLE V

AFFIRMATIVE COVENANTS

          Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired, terminated, cash collateralized or backstopped and all LC Disbursements shall have been reimbursed, each Loan Party executing this Agreement covenants and agrees, with the Lenders that:

          SECTION 5.01. Financial Statements; Borrowing Base and Other Information. The Borrowers will furnish to the Administrative Agent and each Lender:

     (a) within 90 days after the end of each fiscal year of Holdings, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, accompanied by any management letter prepared by said accountants. Notwithstanding the foregoing, in the event that the US Borrower delivers an annual report on Form 10-K of Holdings for such fiscal year the Borrowers will be deemed to have delivered the financial statements required by this Section 5.01(a) on the date of such filing;

     (b) within 55 days after the end of each of the first three fiscal quarters of Holdings, its consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of the Financial Officers of the Borrower Representative as presenting fairly in all material

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respects the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes. Notwithstanding the foregoing, in the event that the US Borrower delivers a quarterly report on Form 10-Q of Holdings for such fiscal quarter, the Borrowers will be deemed to have delivered the financial statements required by this Section 5.01(b) on the date of such filing;

     (c) within 30 days after the end of each fiscal month of Holdings, its consolidated balance sheet, statements of cash flows and income statement as of the end of and for such fiscal month and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year;

     (d) concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer of the Borrower Representative in substantially the form of Exhibit G (i) certifying, in the case of the financial statements delivered under clause (b), as presenting fairly in all material respects the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes, (ii) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (iii) setting forth reasonably detailed calculations demonstrating compliance (if applicable) with Section 6.15 and (iv) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 that would affect the financial statements accompanying such certificate and specifying the effect of such change on the financial statements accompanying such certificate;

     (e) concurrently with any delivery of financial statements under clause (a) above, a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default (which certificate may be limited to the extent required by accounting rules or guidelines);

     (f) as soon as available, but in any event not more than 60 days after the end of each fiscal year of Holdings, a copy of the plan and forecast (including a projected consolidated balance sheet, income statement and funds flow statement) of Holdings for each quarter of the upcoming fiscal year (the “Projections”) in form reasonably satisfactory to the Administrative Agent;

     (g) as soon as available but in any event within 20 days of the end of each calendar month (and, during any Restriction Period, each calendar week), and at such other times as may be reasonably requested by the Administrative Agent, as of the period then ended, an Aggregate Borrowing Base Certificate, together with a Borrowing Base Certificate for each Borrower which calculates such Borrower’s Borrowing Base, and supporting information in connection therewith, together with any additional reports with respect to the Borrowing Base of any Borrower as the Administrative Agent may reasonably request; and the PP&E Component of the Borrowing Base shall be updated (i) from time to time upon receipt of periodic valuation updates received from the Administrative Agent’s asset valuation experts, (ii) concurrent with the sale of or entry into a binding commitment to sell (other than to another Loan Party) any assets constituting part of the PP&E Component, or (iii) in the event any material assets are idled for any reason other than routine maintenance or repairs for a period in excess of ten (10) consecutive days;

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     (h) as soon as available but in any event within 20 days of the end of each calendar month (and, during any Restriction Period, each calendar week) and at such other times as may be reasonably requested by the Administrative Agent, as of the period then ended, all delivered in a manner reasonably acceptable to the Administrative Agent:

     (i) a detailed aging of the Accounts of each Loan Party (other than Holdings) (1) including lists of all invoices aged by invoice date and due date (with an explanation of the terms offered) and (2) reconciled to the Borrowing Base Certificate of each Borrower delivered as of such date prepared in a manner reasonably acceptable to the Administrative Agent, together with a summary specifying the balance due for each Account Debtor;

     (ii) a schedule detailing the Inventory of each Loan Party (other than Holdings), in form reasonably satisfactory to the Administrative Agent, (1) by location (showing Inventory in transit, any Inventory located with a third party under any consignment, bailee arrangement, or warehouse agreement), by class (raw material, work-in-process and finished goods), by product type, and by volume on hand, which Inventory shall be valued at the lower of cost (determined on a first-in, first-out basis) or market and adjusted for Reserves as the Administrative Agent has previously indicated to the Borrower Representative are deemed by the Administrative Agent to be appropriate, (2) including a report of any variances or other results of Inventory counts performed by each Loan Party (other than Holdings) since the last Inventory schedule (including information regarding sales or other reductions, additions, returns, credits issued by each Loan Party (other than Holdings) and complaints and claims made against the Borrowers), and (3) reconciled to the Borrowing Base Certificate of each Borrower delivered as of such date;

     (iii) a worksheet of calculations prepared by each Loan Party (other than Holdings) to determine Eligible Accounts and Eligible Inventory, such worksheets detailing the Accounts and Inventory excluded from Eligible Accounts and Eligible Inventory and the reason for such exclusion;

     (iv) a reconciliation of the Accounts and Inventory of each Loan Party (other than Holdings) between the amounts shown in the Borrowers’ general ledger and financial statements and the reports delivered pursuant to clauses (i) and (ii) above; and

     (v) a reconciliation of the loan balance per each Borrower’s general ledger to the loan balances under this Agreement;

     (i) as soon as available but in any event within 20 days of the end of each calendar month and at such other times as may be reasonably requested by the Administrative Agent, as of the month then ended, a schedule and aging of the Borrowers’ and the other Loan Parties’ accounts payable, delivered in a manner reasonably acceptable to the Administrative Agent;

     (j) promptly upon the Administrative Agent’s request:

     (i) copies of invoices in connection with the invoices issued by any Loan Party in connection with any Accounts, credit memos, shipping and delivery documents, and other information related thereto;

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     (ii) copies of purchase orders, invoices, and shipping and delivery documents in connection with any Inventory or Equipment purchased by any Loan Party; and

     (iii) a schedule detailing the balance of all intercompany accounts of the Loan Parties;

     (k) as soon as available but in any event within 20 days of the end of each calendar month (and during any Restriction Period, each calendar week) and at such other times as may be reasonably requested by the Administrative Agent, as of the period then ended, each Loan Party’s sales journal, cash receipts journal (identifying trade and non-trade cash receipts) and debit memo/credit memo journal;

     (l) within 20 days of each March 31 and September 30, an updated customer list for each Borrower and its Subsidiaries, which list shall state the customer’s name, mailing address and phone number, delivered in a manner reasonably acceptable to the Administrative Agent, and shall be certified as true and correct by a Financial Officer of the Borrower Representative;

     (m) within 20 days of the first Business Day of each March, a certificate of good standing for each Loan Party from the appropriate governmental officer in its jurisdiction of incorporation, formation, or organization (to the extent available in such jurisdiction);

     (n) no later than 5 Business Days prior to the effectiveness thereof, copies of substantially final drafts of any proposed amendment, waiver or other modification other than a supplement to add additional guarantors with respect to the Senior Notes or the Second Lien Registration Rights Agreement;

     (o) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by Holdings, any Borrower or any Subsidiary with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, as the case may be; and

     (p) promptly following any request therefor, such other reasonably available information regarding the operations, business affairs and financial condition of Holdings or any Subsidiary, as the Administrative Agent or any Lender may reasonably request.

          SECTION 5.02. Notices of Material Events. The Borrowers and Holdings will furnish to the Administrative Agent and each Lender prompt written notice of the following:

     (a) the occurrence of any Default;

     (b) receipt of any written notice of any governmental investigation or any litigation or proceeding commenced or threatened against any Loan Party that (i) seeks damages in excess of $5,000,000, (ii) seeks injunctive relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan Party, (v) alleges the violation of any law regarding, or seeks remedies in connection with, any Environmental Laws involving liability in excess of $5,000,000, (vi) contests any tax, fee, assessment, or other governmental charge in excess of $5,000,000, or (vii) involves any product recall;

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     (c) any Lien (other than Liens permitted by Section 6.02) or asserted against any of the Collateral;

     (d) any loss, damage, or destruction to the Collateral in the amount of $2,500,000 or more, whether or not covered by insurance;

     (e) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrowers and their Subsidiaries in an aggregate amount exceeding $2,500,000; and

     (f) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower Representative setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

          SECTION 5.03. Existence; Conduct of Business. Each Loan Party will, and will cause each Subsidiary to, (a) do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, licenses, permits, franchises, governmental authorizations, Intellectual Property rights, licenses and permits material to the conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted, in each case, except as could not be reasonably expected, individually or in the aggregate, to result in a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 and (b) carry on and conduct its business in substantially the same fields of enterprise as it is presently conducted or enterprises reasonably related thereto or reasonable extensions thereof.

          SECTION 5.04. Payment of Obligations. Each Loan Party will, and will cause each Subsidiary to, pay or discharge all Material Indebtedness and all other material liabilities and obligations, including Taxes, before the same shall become delinquent or in default, except (a) where the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) where such Loan Party or such Subsidiary has set aside on its books adequate reserves with respect thereto if and to the extent required by GAAP or (c) as could not be reasonably expected, individually or in the aggregate, to result in a Material Adverse Effect.

          SECTION 5.05. Maintenance of Properties. Except as could not be reasonably expected, individually or in the aggregate, to result in a Material Adverse Effect, each Loan Party will, and will cause each Subsidiary to, keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted.

          SECTION 5.06. Books and Records; Inspection Rights. Each Loan Party will, and will cause each Subsidiary to, (i) keep proper books of record and account in which full, true and correct entries in all material respects in conformity with GAAP, are made of all dealings and transactions in relation to its business and activities and (ii) permit any representatives designated by the Administrative Agent or any Lender (including employees of the Administrative Agent, any Lender or any consultants, accountants, lawyers and appraisers retained by the Administrative Agent), upon reasonable prior notice during normal business hours, to visit and inspect its properties, to conduct field examinations, to examine and make extracts from its books and records, including environmental assessment reports and Phase I or Phase II studies, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested; provided,

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however that Financial Officers of the Borrowers shall be entitled to participate in any discussion or meeting with the accountants and absent the continuance of an Event of Default, not more than two visits shall occur in any fiscal year (it being understood without limitation of the foregoing that there shall be no limitation on the frequency of such visits and inspections (x) if an Event of Default shall have occurred and be continuing or (y) such visit and/or inspection is paid for by the relevant Lender). After the occurrence and during the continuance of any Event of Default, each Loan Party shall provide the Administrative Agent and each Lender with contact information relating to its suppliers. The Loan Parties acknowledge that the Administrative Agent, after exercising its rights of inspection, may prepare and distribute to the Lenders certain Reports pertaining to the Loan Parties’ assets for internal use by the Administrative Agent and the Lenders.

          SECTION 5.07. Compliance with Laws. Except as could not be reasonably expected, individually or in the aggregate, to result in a Material Adverse Effect, each Loan Party will, and will cause each Subsidiary to, comply with all Requirements of Law applicable to it or its property.

          SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be used only to finance the Acquisition, the refinancing of existing indebtedness, fees and expenses relating to the foregoing and for other general corporate purposes. No part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.

          SECTION 5.09. Insurance. Each Loan Party will, and will cause each Subsidiary to, maintain with financially sound and reputable carriers having a financial strength rating of at least A+ by A.M. Best Company (a) insurance in such amounts (with no greater risk retention) and against such risks (including loss or damage by fire and loss in transit; theft, burglary, pilferage, larceny, embezzlement, and other criminal activities; business interruption; and general liability) and such other hazards, as is customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations and (b) all insurance required pursuant to the Collateral Documents. The Borrowers will furnish to the Lenders, upon reasonable request of the Administrative Agent, a certificate evidencing the insurance so maintained.

          SECTION 5.10. [Reserved].

          SECTION 5.11. Appraisals. At any time that the Administrative Agent requests, each of the Borrowers will, and will cause each Subsidiary to, provide the Administrative Agent with appraisals or updates thereof of their Inventory, Equipment and Eligible Real Property from an appraiser selected and engaged by the Administrative Agent, and prepared on a basis satisfactory to the Administrative Agent, such appraisals and updates to include, without limitation, information required by applicable law and regulations; provided, however, that if no Event of Default has occurred and is continuing, one such appraisal per calendar year shall be at the sole expense of the Loan Parties.

          SECTION 5.12. Depository Banks. Each of the Borrowers will, and will cause each Subsidiary to, maintain the Administrative Agent, one of the Lenders or a bank reasonably acceptable to the Administrative Agent as its principal depository bank (it being understood that each Borrower may have a different principal depository bank), including for the maintenance of operating, administrative, cash management, collection activity, and other deposit accounts for the conduct of its business.

          SECTION 5.13. Environmental Laws. Except as could not be reasonably expected, individually or in the aggregate, to result in a Material Adverse Effect, each of the Borrowers will, and will cause each Subsidiary to:

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     (a) comply with, all applicable Environmental Laws, and obtain and comply with and maintain, any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws; and

     (b) conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply with all lawful orders and directives of all Governmental Authorities regarding Environmental Laws.

          SECTION 5.14. Additional Collateral; Further Assurances. (a) Subject to applicable law, (i) the US Borrower and each Subsidiary that is a US Loan Party shall cause each of its domestic Subsidiaries formed or acquired after the date of this Agreement in accordance with the terms of this Agreement to become a US Loan Party and (ii) the Netherlands Borrower and each Subsidiary that is a Netherlands Loan Party shall cause each of its Subsidiaries that is organized under the laws of The Netherlands and is formed or acquired after the date of this Agreement in accordance with the terms of this Agreement to become a Netherlands Loan Party, in each case by executing the Joinder Agreement set forth as Exhibit H hereto (the “Joinder Agreement”) by the earlier of (I) the date that any such Subsidiary guarantees any obligations under the Senior Notes and (II) the date that is ten (10) days after the formation or acquisition of such Subsidiary. Upon execution and delivery thereof, each such Person (i) that is organized under the laws of the United States (A) shall automatically become a US Loan Guarantor hereunder and thereupon shall have all of the rights, benefits, duties, and obligations in each such capacity under the Loan Documents and (B) will grant Liens to the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, in any property of such Loan Party which constitutes Collateral, including any parcel of real property located in the United States owned by such Loan Party with a fair market value in excess of $1,000,000 and (ii) that is organized under the laws of The Netherlands (A) shall automatically become a Netherlands Loan Guarantor hereunder thereupon shall have all of the rights, benefits, duties, and obligations in each such capacity under the Loan Documents and (B) will grant Liens to the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, in any property of such Loan Party which constitutes Netherlands Collateral, including any parcel of real property owned by such Netherlands Loan Party with a fair market value in excess of $1,000,000.

          (b) Each US Loan Party will cause (i) 100% of the issued and outstanding Equity Interests of each of its domestic Subsidiaries and (ii) 65% of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary directly owned by the US Borrower or any domestic Subsidiary, to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent pursuant to the terms and conditions of the US Collateral Documents as the Administrative Agent shall reasonably request.

          (c) Each Netherlands Loan Party will cause 100% of the issued and outstanding Equity Interests of (i) each of its Subsidiaries that is organized under the laws of the Netherlands and (ii) each of its direct Subsidiaries that is not organized under the laws of the Netherlands to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent pursuant to the terms and conditions of the Netherlands Collateral Documents (or in the case of (ii) above, similar terms and conditions) as the Administrative Agent shall reasonably request.

          (d) Without limiting the foregoing, each Loan Party will execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents, agreements and instruments, and will take or cause to be taken such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust and other documents and such other actions or deliveries of the type required by Section 4.01, as applicable), which may be required by law or which

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the Administrative Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created or intended to be created by the Collateral Documents to the extent required by the Collateral Documents, all at the expense of the applicable Loan Party.

          (e) If any material assets (including any real property or improvements thereto or any interest therein) are acquired by any Borrower or any Subsidiary that is a Loan Party after the Effective Date (other than assets constituting Collateral under any Security Agreement that become subject to the Lien in favor of the applicable Administrative Agent upon acquisition thereof), the Borrower Representative will notify the Administrative Agent and the Lenders thereof, and, if requested by the Administrative Agent or the Required Lenders, the US Borrower or Netherlands Borrower, as applicable, will cause such assets to be subjected to a Lien securing the Secured Obligations or the Netherlands Secured Obligations, respectively, in accordance with and subject to the terms of the US Collateral Documents or the Netherlands Collateral Documents, as applicable, and will take, and cause its Subsidiary Loan Parties to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in paragraph (d) of this Section, all at the expense of the applicable Loan Party.

          SECTION 5.15. Postclosing Mortgaged Properties. Each Loan Party will, and will cause each Subsidiary to, cause to be delivered to the Administrative Agent with respect to each Postclosing Mortgaged Property within thirty (30) days following the Effective Date (or, if applicable, in the case of the property located at 101 Traex Plaza, Dane, Wisconsin, by February 28, 2007); provided however that the Administrative Agent may extend such time in its discretion without obtaining the consent of the Lenders, each of the following:

          (a) a Mortgage executed by the Loan Party owning such Postclosing Mortgaged Property substantially in the form of, with respect to a US Mortgage, Exhibit J and, with respect to a Netherlands Mortgage, Exhibit K, which Mortgage shall, upon recordation in the applicable filing office, create a valid and enforceable first priority Lien in favor of the Administrative Agent for the benefit of itself and the Lenders;

          (b) with respect to any parcel of real property located in the United States, ALTA or other mortgagee’s title policy;

          (c) with respect to any parcel of real property located in the United States, either (a) an ALTA survey prepared and certified to the Administrative Agent by a surveyor reasonably acceptable to the Administrative Agent or (b) a title insurance policy of the type referred to in clause (c) above not containing an exception for any matter shown by a survey (except to the extent an existing survey has been provided and specifically incorporated into such title insurance policy);

          (d) a certificate, signed by the chief financial officer of Holdings, dated as of the date of delivery of the Mortgage provided for in this Section 5.15 and addressed to the Administrative Agent and the Lenders, in form and substance reasonably acceptable to the Administrative Agent, (i) stating that no Default has occurred and is continuing, (ii) stating that the representations and warranties contained in Article III are true and correct as of such date, and (iii) certifying any other factual matters as may be reasonably requested by the Administrative Agent;

          (e) a solvency certificate with respect to Holdings from a Financial Officer of Holdings to the effect that the Loan Parties are and will continue to be Solvent;

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          (f) an opinion of special counsel to such Loan Party dated as of the date of delivery of the Mortgage provided for in this Section 5.15 and addressed to the Administrative Agent and the Lenders, in form and substance reasonably acceptable to the Administrative Agent (which opinion shall include opinions regarding such Loan Party and Mortgage substantially similar to the opinions of special counsel delivered pursuant to Section 4.1(a));

          (g) to the extent not previously delivered to the satisfaction of the Administrative Agent, current copies of the organizational documents (such as, if applicable, a certificate or articles of incorporation) and operating documents (such as, if applicable, by-laws or an operating, management or partnership agreement) of such Subsidiary, minutes of duly called and conducted meetings (or duly effected consent actions) of the Board of Directors, partners, or appropriate committees thereof (and, if required by such organizational documents, operating documents or applicable law, of the shareholders, members or partners) of such Loan Party authorizing the actions and the execution and delivery of documents described in this Section 5.15; and

          (h) such other information, documentation, and certifications as may be reasonably required by the Administrative Agent.

          SECTION 5.16. Interest Rate Protection. No later than 60 days after the Effective Date (or such longer period as the Administrative Agent may agree), the U.S. Borrower will enter into Swap Agreements to the extent necessary to provide that at least 50% of the aggregate principal (USD Equivalent) amount of the sum of (a) the Senior Notes and (b) $47,000,000 is subject to either a fixed interest rate or interest rate protection for a period of not less than three years (collectively, the “Required Swap Agreements”), which Swap Agreements shall have terms and conditions reasonably satisfactory to the Administrative Agent.

          SECTION 5.17. Post-Closing Matters. The Borrowers will, or will cause the Loan Parties to, furnish to the Administrative Agent the items set forth on Schedule 5.17 by the relevant date specified on Schedule 5.17.

          SECTION 5.18. USA PATRIOT Act. The Borrowers shall and shall cause the other Guarantors to promptly, following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act, (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”).

ARTICLE VI

NEGATIVE COVENANTS

          Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees, expenses and other amounts payable under any Loan Document have been paid in full and all Letters of Credit have expired or terminated or have been cash-collateralized or backstopped and all LC Disbursements shall have been reimbursed, the Loan Parties covenant and agree, jointly and severally, with the Lenders that:

          SECTION 6.01. Indebtedness. No Loan Party will, nor will it permit any Subsidiary to, create, incur or suffer to exist any Indebtedness, except:

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     (a) the Secured Obligations;

     (b) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and extensions, renewals and replacements of any such Indebtedness in accordance with clause (f) hereof;

     (c) Indebtedness of any Borrower to any Subsidiary and of any Subsidiary to any Borrower or any other Subsidiary, provided that (i) Indebtedness of any Subsidiary that is not a Loan Party to any Borrower or any Subsidiary that is a Loan Party shall be subject to Section 6.04 and (ii) Indebtedness of any Borrower to any Subsidiary and Indebtedness of any Subsidiary that is a Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Secured Obligations on terms reasonably satisfactory to the Administrative Agent;

     (d) Guarantees in the ordinary course of business by Holdings or any Borrower of Indebtedness or other obligations of any Subsidiary and by any Subsidiary of Indebtedness or other obligations of Holdings, any Borrower or any other Subsidiary, provided that (i) any Indebtedness so Guaranteed is permitted by this Section 6.01, (ii) Guarantees by Holdings, any Borrower or any Subsidiary that is a Loan Party of Indebtedness or other obligations of any Subsidiary that is not a Loan Party shall be subject to Section 6.04 and (iii) Guarantees of Indebtedness permitted under this clause (d) shall be subordinated to the Secured Obligations of the applicable Subsidiary on the same terms as the Indebtedness so Guaranteed is subordinated to the Secured Obligations;

     (e) Indebtedness of any Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness in accordance with clause (f) hereof; provided that (i) such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e) shall not exceed $5,000,000 at any time outstanding;

     (f) Indebtedness which represents an extension, refinancing, or renewal of any of the Indebtedness described in clauses (b), (e), (p) and (q) hereof; provided that, (i) the principal amount (other than by an amount equal to accrued interest, premium and fees and expenses paid in connection with such refinancing) or interest rate of such Indebtedness is not increased, (ii) any Liens securing such Indebtedness are not extended to any additional property of any Loan Party, (iii) no Loan Party that is not originally obligated with respect to repayment of such Indebtedness is required to become obligated with respect thereto, (iv) such extension, refinancing or renewal does not result in a shortening of the average weighted maturity of the Indebtedness so extended, refinanced or renewed, (v) the terms of any such extension, refinancing, or renewal are not less favorable to the obligor taken as a whole thereunder than the original terms of such Indebtedness and (iv) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Secured Obligations, then the terms and conditions of the refinancing, renewal, or extension Indebtedness must include subordination terms and conditions that are at least as favorable to the Administrative Agent and the Lenders as those that were applicable to the refinanced, renewed, or extended Indebtedness;

     (g) Indebtedness owed to any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to

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reimbursement or indemnification obligations to such person, in each case incurred in the ordinary course of business;

     (h) Indebtedness of any Borrower or any Subsidiary in respect of performance bonds, bid bonds, appeal bonds, surety bonds, completion guarantees, warranties, indemnities and similar obligations, in each case provided in the ordinary course of business;

     (i) Indebtedness of any Person that becomes a Subsidiary after the date hereof; provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii) the aggregate principal amount of Indebtedness permitted by this clause (i) shall not exceed $2,500,000 at any time outstanding;

     (j) other unsecured Indebtedness in an aggregate principal amount not exceeding $5,000,000 at any time outstanding; provided that the aggregate principal amount of Indebtedness of the Borrowers’ Subsidiaries permitted by this clause (j) shall not exceed $5,000,000 at any time outstanding;

     (k) Indebtedness in respect of (i) the Second Lien Senior Notes (and any related exchange notes issued pursuant to the Second Lien Registration Rights Agreement and any related Guarantees of either of them) in an aggregate principal amount not exceeding $306,000,000 at any one time outstanding and (ii) the Third Lien Senior Notes (and any related Guarantees) in an aggregate principal amount not exceeding $102,000,000 plus increases in such principal amount through the issuance of payment-in-kind notes pursuant to the terms thereof at any one time outstanding;

     (l) the Required Swap Agreements and any Swap Agreements permitted under Section 6.07;

     (m) Indebtedness arising from agreements providing for customary indemnification, adjustment of purchase price or similar obligations incurred or assumed in connection with any dispositions permitted hereunder;

     (n) Indebtedness represented by earnout provisions in acquisition agreements in connection with any acquisitions permitted hereunder;

     (o) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, provided, however, that such Indebtedness is extinguished within five business days of incurrence;

     (p) Indebtedness incurred by any Subsidiaries that are not Subsidiary Guarantors (and any related Guarantees by Holdings or the Borrowers of such Indebtedness) in an aggregate principal amount not to exceed $25,000,000 at any time outstanding;

     (q) Indebtedness of Libbey Glassware (China) Co., Ltd. or another Subsidiary organized under the laws of the People’s Republic of China in an aggregate principal amount not to exceed the U.S. dollar equivalent of $40,000,000 at any time outstanding and any Guarantees of such Indebtedness by Holdings and/or the US Borrower; and

     (r) Indebtedness of Holdings permitted by Section 6.04(q).

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          SECTION 6.02.    Liens. No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

     (a) Liens created pursuant to any Loan Document;

     (b) Permitted Encumbrances;

     (c) any Lien on any property or asset of any Borrower or any Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any other property or asset of such Borrower or Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

     (d) Liens on fixed or capital assets and proceeds thereof acquired, constructed or improved by any Borrower or any Subsidiary; provided that (i) such security interests secure Indebtedness permitted by clause (e) of Section 6.01, (ii) such security interests and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, and such security interests shall not apply to any other property or assets of such Borrower or Subsidiary or any other Borrower or Subsidiary;

     (e) any Lien existing on any property or asset prior to the acquisition thereof by any Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Loan Party after the date hereof prior to the time such Person becomes a Loan Party; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Loan Party, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Loan Party and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Loan Party, as the case may be and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

     (f) Liens of a collecting bank arising in the ordinary course of business under Section 4-208 of the Uniform Commercial Code in effect in the relevant jurisdiction covering only the items being collected upon;

     (g) Liens arising out of sale and leaseback transactions permitted by Section 6.06;

     (h) Liens granted by a Subsidiary that is not a Loan Party in favor of any Borrower or another Loan Party in respect of Indebtedness owed by such Subsidiary;

     (i) Liens securing Indebtedness permitted by Section 6.01(p) and 6.01(q) hereof;

     (j) Liens on assets of Holdings, the US Borrower and its Subsidiaries securing Indebtedness permitted by Section 6.01(k) and other obligations pursuant to the Senior Notes Indentures and documents entered into in connection therewith; provided that the Administrative Agent has a first priority Lien on such assets pursuant to the Collateral Documents (subject to the Intercreditor Agreement); and

     (k) Liens securing other obligations in an aggregate principal amount outstanding at any one time not to exceed $2,500,000.

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          SECTION 6.03.    Fundamental Changes. (a) No Loan Party will, nor will it permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing (i) any Subsidiary of any Borrower may merge, consolidate, liquidate or dissolve into a Borrower in a transaction in which the Borrower is the surviving corporation, (ii) any Loan Party (other than a Borrower) may merge, consolidate, liquidate or dissolve into any Loan Party in a transaction in which the surviving entity is a Loan Party and (iii) any Subsidiary that is not a Loan Party may merge, consolidate, liquidate or dissolve into a Loan Party or another Subsidiary which is not a Loan Party or liquidate or dissolve if the Borrower which owns such Subsidiary determines in good faith that such liquidation or dissolution is in the best interests of such Borrower and is not materially disadvantageous to the Lenders; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04.

          (b) No Loan Party will, nor will it permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Borrowers and their Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto and reasonable extensions thereof.

          (c) Holdings will not engage in any business or activity other than the ownership of all the outstanding shares of capital stock of the Borrowers, Subsidiaries of the Borrowers and activities incidental thereto, including, without limitation, employee stock options and responsibilities of a public company. Holdings will not own or acquire any assets (other than Equity Interests of the Borrowers and the cash proceeds of any Restricted Payments permitted by Section 6.08 or loans permitted by Section 6.04) or incur any liabilities (other than liabilities under the Loan Documents and liabilities reasonably incurred in connection with its maintenance of its existence and Guarantees and other Indebtedness permitted under Section 6.01, including, without limitation, liabilities and liens granted with respect to the Senior Notes Indentures and liabilities with respect to debt of Libbey Glassware (China) Co. Ltd).

          SECTION 6.04.    Investments, Loans, Advances, Guarantees and Acquisitions. No Loan Party will, nor will it permit any Subsidiary to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a Loan Party and a wholly owned Subsidiary prior to such merger) any capital stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise), except:

     (a) Permitted Investments which, unless held in Non-Restricted Accounts, are subject to control agreements in favor of the Administrative Agent for the benefit of the Lenders or otherwise subject to a perfected security interest in favor of the Administrative Agent for the benefit of the Lenders;

     (b) investments in existence on the date of this Agreement and described in Schedule 6.04;

     (c) investments by Holdings in the Borrowers and by the Borrowers and the Subsidiaries in Equity Interests in their respective Subsidiaries, provided that (A) any such Equity Interests held by a Loan Party shall be pledged pursuant to the respective Security Agreement (subject to the limitations applicable to common stock of a Foreign Subsidiary referred to in Section 5.14) and (B) the aggregate amount of investments by Loan Parties in Subsidiaries that

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are not Loan Parties (together with outstanding intercompany loans permitted under clause (B) to the proviso to Section 6.04(d), outstanding Guarantees permitted under the proviso to Section 6.04(e)(i) and the Fair Market Differential arising from transactions permitted by the proviso to clause (b) of Section 6.05) shall not exceed $10,000,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs);

     (d) loans or advances made by any Borrower to any Subsidiary and made by any Subsidiary to any other Borrower or any other Subsidiary, provided that (A) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the US Security Agreement or, in the case of a Netherlands Loan Party, any such loans and advances made are pledged pursuant to the relevant Netherlands Security Agreement and (B) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties (together with outstanding investments permitted under clause (B) to the proviso to Section 6.04(c), outstanding Guarantees permitted under the proviso to Section 6.04(e)(i) and the Fair Market Differential arising from transactions permitted by the proviso of clause (b) of Section 6.05) shall not exceed $10,000,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs);

     (e) (i) Guarantees constituting Indebtedness permitted by Section 6.01, provided that the aggregate principal amount of Indebtedness of Subsidiaries that are not Loan Parties that is Guaranteed by any Loan Party (together with outstanding investments permitted under clause (B) to the proviso to Section 6.04(c), outstanding intercompany loans permitted under clause (B) to the proviso to Section 6.04(d) and the Fair Market Differential arising from transactions permitted by the proviso of clause (b) of Section 6.05) shall not exceed $10,000,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs) and (ii) Guarantees permitted by Sections 6.01(p) and (q);

     (f) loans or advances made by a Loan Party to its employees on an arms-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of $2,000,000 in the aggregate at any one time outstanding;

     (g) subject to Sections 4.2(a) and 4.4 of the Security Agreement, notes payable, or stock or other securities issued by Account Debtors to a Loan Party pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts in the ordinary course of business, consistent with past practices;

     (h) investments in the form of Swap Agreements permitted by Section 6.07;

     (i) investments of any Person existing at the time such Person becomes a Subsidiary of a Borrower or consolidates or merges with a Borrower or any of the Subsidiaries (including in connection with a permitted acquisition) so long as such investments were not made in contemplation of such Person becoming a Subsidiary or of such merger;

     (j) investments received in connection with the dispositions of assets permitted by Section 6.05;

     (k) investments constituting deposits described in clauses (c) and (d) of the definition of the term “Permitted Encumbrances;”

     (l) the Acquisition;

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     (m) Investments incurred in order to complete the acquisition of Crisal-Cristalaria Automatica, S.A.;

     (n) loans or advances to employees of Holdings and its Subsidiaries the proceeds of which are used to purchase Capital Stock of Holdings;

     (o) other Investments in an aggregate amount not to exceed $2,500,000 during any fiscal year of Holdings net of any return on such Investments;

     (p) Investments consisting of licensing of intellectual property pursuant to joint marketing arrangements with other Persons;

     (q) loans to Holdings for the purpose of (i) funding any Restricted Payment permitted by Section 6.08, (ii) paying any federal, state or local income Taxes to the extent that such income Taxes are directly attributable to the income of the US Borrower and its Subsidiaries, (iii) paying franchise Taxes and other fees to maintain its legal existence, or (iv) paying corporate overhead expenses of Holdings including financing transactions that benefit the US Borrower and its Subsidiaries and to pay salaries or other compensation of employees who perform services for both Holdings and the US Borrower; and

     (r) Permitted Acquisitions.

          SECTION 6.05.    Asset Sales. No Loan Party will, nor will it permit any Subsidiary to, sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will any Borrower permit any Subsidiary to issue any additional Equity Interest in such Subsidiary (other than to another Borrower or another Subsidiary in compliance with Section 6.04), except:

     (a) sales, transfers and dispositions of (i) inventory in the ordinary course of business and (ii) used, obsolete, worn out or surplus equipment or property in the ordinary course of business;

     (b) sales, transfers and dispositions to any Borrower or any Subsidiary, provided that the aggregate amount of any such sales, transfers or dispositions involving a Subsidiary that is not a Loan Party (together with outstanding investments permitted under clause (B) to the proviso to Section 6.04(c), outstanding intercompany loans permitted under clause (B) to the proviso to Section 6.04(d) and outstanding Guarantees permitted under the proviso to Section 6.04(e)(i)) shall not exceed $10,000,000;

     (c) sales, transfers and dispositions of accounts receivable in connection with the compromise, settlement or collection thereof;

     (d) sales, transfers and dispositions of investments permitted by (A) clauses (i) or (B) clause (k), in each case, of Section 6.04;

     (e) sale and leaseback transactions permitted by Section 6.06;

     (f) dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Borrower or any Subsidiary;

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     (g) sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary unless all Equity Interests in such Subsidiary are sold) that are not permitted by any other paragraph of this Section, provided that the aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this paragraph (g) shall not exceed $2,500,000 during any fiscal year of Holdings;

     (h) sales, transfers and dispositions of the business and related assets currently conducted by Traex Company;

     (i) Restricted Payment permitted by Section 6.08 hereof;

     (j) non-exclusive licensing or sublicensing of Intellectual Property in the ordinary course of business, provided, that no such license or sublicense may be granted that would reasonably be expected to constitute an abandonment of any Loan Party’s or any Subsidiary’s trade name or trade marks or other similar Intellectual Property if such abandonment would materially interfere with the business of Holdings and its Subsidiaries;

     (k) leases or subleases of property in the ordinary course of business that does not materially interfere with the conduct of the business of Holdings or its Subsidiaries; and

     (l) the sale, transfer or other disposition of approximately 40 acres of vacant land owned by Syracuse China Company in Syracuse, New York.

provided that all sales, transfers, leases and other dispositions permitted by clauses (d), (g), (h), (j), (k) and (l) shall be made for fair value and for at least 75% cash consideration.

          SECTION 6.06.    Sale and Leaseback Transactions. No Loan Party will, nor will it permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except for any such sale of any fixed or capital assets by any Borrower or any Subsidiary that is made for cash consideration in an amount not less than the fair value of such fixed or capital asset and is consummated either within 90 days after such Borrower or such Subsidiary acquires or completes the construction of such fixed or capital asset or in connection with a disposition permitted hereunder.

          SECTION 6.07.    Swap Agreements. No Loan Party will, nor will it permit any Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered into in the ordinary course of business to hedge or mitigate risks to which any Borrower or any Subsidiary has actual exposure (other than those in respect of Equity Interests of any Borrower or any of its Subsidiaries), (b) Swap Agreements entered into in the ordinary course of business in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of any Borrower or any Subsidiary, (c) Swap Agreements entered into in the ordinary course of business in order to effectively cap, collar or exchange Exchange Rates with respect to the Obligations and (d) the Required Swap Agreements.

          SECTION 6.08.    Restricted Payments; Certain Payments of Indebtedness. (a) No Loan Party will, nor will it permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except, individually and cumulatively, (i) each of Holdings and each Borrower may declare and pay dividends with respect to its common stock payable solely in additional shares of its common stock, and, with

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respect to its preferred stock, payable solely in additional shares of such preferred stock or in shares of its common stock, (ii) each Subsidiary of Holdings (including the Netherlands Borrower) may declare and pay dividends ratably with respect to their Equity Interests, (iii) each Loan Party may make Restricted Payments, not exceeding $2,000,000 in the aggregate with regard to all such Loan Parties during any fiscal year of Holdings, pursuant to and in accordance with stock option plans or other benefit plans for management or employees of such Loan Party and its Subsidiaries, (iv) the Borrowers may make Restricted Payments to Holdings for purposes of paying any federal, state or local income Taxes to the extent that such income Taxes are directly attributable to the income of the US Borrower and its Subsidiaries, paying franchise Taxes and other fees to maintain its legal existence, and paying corporate overhead expenses of Holdings including financing transactions that benefit the US Borrower and its Subsidiaries and to pay salaries or other compensation of employees who perform services for both Holdings and the US Borrower, (v) unless a Restriction Period is in existence, the Borrowers and Holdings may make Restricted Payments from time to time in an aggregate amount not to exceed $5,000,000 during any fiscal year of Holdings; and (vi) Borrower and Holdings may make Restricted Payments from time to time in an aggregate amount not to exceed $0.10 per outstanding share of Holdings in each fiscal year.

          (b) No Loan Party will, nor will it permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Subordinated Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Subordinated Indebtedness, except:

     (i) payment of regularly scheduled interest and principal payments as and when due in respect of any Subordinated Indebtedness, other than payments in respect of the Subordinated Indebtedness prohibited by the subordination provisions thereof; and

     (ii) refinancings of Subordinated Indebtedness to the extent permitted by Section 6.01.

          SECTION 6.09.    Transactions with Affiliates. No Loan Party will, nor will it permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions that (i) are in the ordinary course of business and (ii) are at prices and on terms and conditions not less favorable to such Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among any Borrower and any Subsidiary that is a Loan Party not involving any other Affiliate, (c) any investment permitted by Section 6.04(b), (c), (d), (e), (i), (l), (m) or (q), (d) any Indebtedness permitted under Section 6.01(b), (c) or (d), (e) any Restricted Payment permitted by Section 6.08, (f) loans or advances to employees permitted under Section 6.04, (g) the payment of reasonable fees to directors of any Borrower or any Subsidiary who are not employees of such Borrower or Subsidiary, and compensation and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of the Borrowers or their Subsidiaries in the ordinary course of business, (h) any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans approved by a Borrower’s board of directors, (i) transactions between or among Subsidiaries that are not Loan Parties and (j) sales, transfers and dispositions permitted by Section 6.05(b).

          SECTION 6.10.    Restrictive Agreements. No Loan Party will, nor will it permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other

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arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Loan Party or any of its Subsidiaries to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to any Borrower or any other Subsidiary or to Guarantee Indebtedness of any Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 6.10 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (v) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof and (vi) the foregoing shall not apply to any restrictions or conditions imposed by any agreement relating to Indebtedness permitted by Section 6.01(k), or, to the extent such restrictions relate only to Subsidiaries that are not Loan Parties, Section 6.01(p) or (q) hereof.

          SECTION 6.11.    Amendment of Material Documents. No Loan Party will, nor will it permit any Subsidiary to, amend, modify or waive (a) any of its rights under any agreement relating to any Subordinated Indebtedness, or (b) its certificate of incorporation, by-laws, operating, management or partnership agreement or other organizational documents to the extent any such amendment, modification or waiver would be materially adverse to the Lenders

          SECTION 6.12.    Optional Payments and Modifications of Certain Debt Instruments. Notwithstanding Sections 6.08(b) and 6.11, no Loan Party will (a) make any optional or voluntary payment, prepayment, repurchase or redemption of or otherwise optionally or voluntarily defease or segregate funds with respect to the Senior Notes or take any action to effect any of the foregoing; provided, however, that (i) the US Borrower shall be permitted to redeem or prepay the Senior Notes from the proceeds of a public offering of the US Borrower’s or Holdings’ common stock to the extent permitted under the “equity clawback” provision set forth in (a) Section 5 of the Second Lien Senior Notes Indenture or (b) Section 5 of the Third Lien Senior Notes Indenture and (ii) the US Borrower shall be permitted to redeem or prepay the Senior Notes so long as, both before and after giving effect to any such redemption or prepayment, the Aggregate Availability exceeds $50,000,000; or (b) amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the terms of the Senior Notes, the Senior Notes Indentures, the Second Lien Registration Rights Agreement or any other material agreement relating to any thereof (other than any such amendment, modification, waiver or other change that (A) (i) would extend the maturity or reduce the amount of any payment of principal of the Senior Notes or reduce the rate or extend any date for payment of interest thereon, (ii) would add additional guarantors as contemplated therein as of the Effective Date, or (iii) would have the sole purpose of making a covenant contained in the Senior Notes Indentures less restrictive than the corresponding covenant contained herein and (B) in each such case, does not involve the payment of a consent fee).

          SECTION 6.13.    Capital Expenditures. (a) Neither Holdings nor any other Loan Party will, nor will it permit any Subsidiary to, incur or make any Capital Expenditures during any period set forth below in an amount exceeding the amount set forth opposite such period:

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	Maximum
Period	Capital Expenditures
2006	$	82,000,000
2007	$	50,000,000
2008	$	60,000,000
2009	$	47,000,000
2010	$	57,000,000

          (b) The amount of any Capital Expenditures permitted to be made in respect of any fiscal year shall be increased by the lesser of (i) $15,000,000 and (ii) the unused amount of Capital Expenditures that were permitted to be made during the immediately preceding fiscal year pursuant to Section 6.15(a), without giving effect to any carryover amount. Capital Expenditures in any fiscal year shall be deemed to use first, the amount for such fiscal year set forth in Section 6.13(a) and, second, any amount carried forward to such fiscal year pursuant to this Section 6.13(b).

          SECTION 6.14.    Changes in Fiscal Periods. Neither Holdings nor any other Loan Party will, nor will it permit any Subsidiary to, permit its fiscal year to end on a day other than the last calendar day of each December or change its method of determining fiscal quarters.

          SECTION 6.15.    Financial Covenants.

          (a) Fixed Charge Coverage Ratio. At any time during an applicable Restriction Period, neither Holdings nor any other Loan Party will, nor will it permit any Subsidiary to, permit the Fixed Charge Coverage Ratio, determined for any period of four consecutive fiscal quarters ending on any date during any fiscal year set forth below, to be less than the ratio set forth below opposite such fiscal year:

Fiscal Year	Ratio
2006		1.00 : 1.00
thereafter		1.10 : 1.00

ARTICLE VII

EVENTS OF DEFAULT

     If any of the following events (“Events of Default”) shall occur:

     (a) any Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

     (b) any Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three Business Days;

     (c) any representation or warranty made or deemed made by or on behalf of any Loan Party or any Subsidiary in or in connection with this Agreement or any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate,

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financial statement or other document furnished pursuant to or in connection with this Agreement or any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been materially incorrect when made or deemed made;

     (d) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in (i) Section 5.02(a), 5.03 (with respect to a Loan Party’s existence) or 5.08 or in Article VI of this Agreement or (ii) Section 4.1(d), (e), 4.6(b) or 4.15 of the US Security Agreement;

     (e) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement or any other Loan Document (other than those which constitute a default under another Section of this Article), and such failure shall continue unremedied for a period of (i) 10 days after the earlier of any Loan Party’s knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of (A) Section 5.01, 5.02 (other than Section 5.02(a)), 5.06, 5.09, 5.12, 5.15 or 5.17 of this Agreement or (B) Section 4.1(a) or 4.12 of the US Security Agreement or (ii) 30 days after the earlier of any Loan Party’s knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of any other Section of this Agreement or any other Loan Document;

     (f) any Loan Party or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable and such failure shall continue beyond the applicable period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created;

     (g) any payment default or other breach of an agreement that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (but only after the giving of any requisite notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale, transfer or disposition of the property or assets securing such Indebtedness;

     (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or any Subsidiary of any Loan Party of its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or any Subsidiary of any Loan Party or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

     (i) any Loan Party or any Subsidiary of any Loan Party shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar

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official for such Loan Party or Subsidiary of any Loan Party or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

     (j) any Loan Party or any Subsidiary of any Loan Party shall admit in writing its inability to pay its debts as they become due;

     (k) one or more judgments for the payment of money in an aggregate amount in excess of $5,000,000 shall be rendered against any Loan Party, any Subsidiary of any Loan Party or any combination thereof to the extent not covered by insurance or indemnity for which the insurance company or indemnitor has not disputed coverage and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of any Loan Party or any Subsidiary of any Loan Party with a value in excess of $5,000,000 to enforce any such judgment or any Loan Party or any Subsidiary of any Loan Party shall fail within 30 days to discharge one or more non-monetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal or otherwise being appropriately contested in good faith by proper proceedings diligently pursued;

     (l) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;

     (m) a Change in Control shall occur;

     (n) the Loan Guaranty shall fail to remain in full force or effect or any action shall be taken by a Loan Party to discontinue or to assert the invalidity or unenforceability of the Loan Guaranty, or any Loan Guarantor shall deny in writing that it has any further liability under the Loan Guaranty to which it is a party, or shall give written notice to such effect (provided, that any merger, sale, consolidation or liquidation permitted hereunder shall not constitute an Event of Default under this paragraph (n));

     (o) any Collateral Document shall for any reason fail to create a valid and perfected first priority security interest in any Collateral purported to be covered thereby, except as permitted by the terms of any Collateral Document, or any Collateral Document shall fail to remain in full force or effect or any action shall be taken by a Loan Party to discontinue or to assert the invalidity or unenforceability of any Collateral Document; or

     (p) any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or any Loan Party shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction based on any such assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms);

then, and in every such event (other than an event with respect to any Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower Representative, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans

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then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers; and in case of any event with respect to any Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers. Upon the occurrence and the continuance of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC.

ARTICLE VIII

THE ADMINISTRATIVE AGENT

          Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf, including execution of the other Loan Documents, and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.

          The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Loan Parties or any Subsidiary of a Loan Party or other Affiliate thereof as if it were not the Administrative Agent hereunder.

          The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Loan Party or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or wilful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower Representative or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability,

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effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the creation, perfection or priority of Liens on the Collateral or the existence of the Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

          The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

          The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

          Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time effective upon the appointment of and the acceptance of such appointment by a successor Administrative Agent by notifying the Lenders, the Issuing Bank and the Borrower Representative. Upon any such resignation, the Required Lenders shall have the right, with the prior written consent of the Borrowers Representative, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, with the written consent of the Borrower Representative on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent which shall be a commercial bank or an Affiliate of any such commercial bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.

          Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or related agreement or any document furnished hereunder or thereunder.

          Each Lender hereby agrees that (a) it has requested a copy of each Report prepared by or on behalf of the Administrative Agent; (b) the Administrative Agent (i) makes no representation or

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warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report and (ii) shall not be liable for any information contained in any Report; (c) the Reports are not comprehensive audits or examinations, and that any Person performing any field examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties’ books and records, as well as on representations of the Loan Parties’ personnel and that the Administrative Agent undertakes no obligation to update, correct or supplement the Reports; (d) it will keep all Reports confidential and strictly for its internal use, not share the Report with any other Person except as otherwise permitted pursuant to this Agreement; and (e) without limiting the generality of any other indemnification provision contained in this Agreement, it will pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorney fees) incurred by as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

          The Co-Documentation Agents and the Syndication Agent shall not have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such.

ARTICLE IX

MISCELLANEOUS

          SECTION 9.01.    Notices. (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:

     (i) if to any Loan Party, to the Borrower Representative at:

Libbey Glass Inc.
300 Madison Avenue
Toledo, OH 43604
Attention: Kenneth A. Boerger
Facsimile No: 419-325-2117

     (ii) (a) in the case of the US Borrower, if to the Administrative Agent, the Issuing Bank or the Swingline Lender, to JPMorgan Chase Bank, N.A. at:

Chase Business Credit
8044 Montgomery Rd., Ste. 350
Mail Code OH3-4103
Cincinnati, OH 45236-2919
Attention: Jeffrey W. Swartz
Facsimile No: 513 985-5030

          (b) in the case of the Netherlands Borrower, if to the Administrative Agent, the Issuing Bank or the Swingline Lender, to JPMorgan Chase Bank, N.A. at:

J.P. Morgan Europe Limited

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125 London Wall
London
EC2Y 5 AJ
Attention: Steve Clarke
Facsimile No: 011 44 20 7777 2360

     (iii) if to any other Lender, to it at its address or facsimile number set forth in its Administrative Questionnaire.

All such notices and other communications (i) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received or (ii) sent by facsimile shall be deemed to have been given when sent, provided that if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient.

          (b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications (including e-mail and internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II or to compliance and no Event of Default certificates delivered pursuant to Section 5.01(d) unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower Representative (on behalf of the Loan Parties) may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. All such notices and other communications (i) sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (b)(i) of notification that such notice or communication is available and identifying the website address therefor.

          (c) Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.

          SECTION 9.02.    Waivers; Amendments. (a) No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.

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          (b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrowers and the Required Lenders or, (ii) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, increase the Euro Sublimit without the written consent of each Lender or increase the Revolving Netherlands Sublimit without the written consent of the Supermajority Lenders (provided that the Administrative Agent may make Protective Advances as set forth in Section 2.04), (ii) reduce or forgive the principal amount of any Loan or LC Disbursement or subject to Section 2.13(d) reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the written consent of each Lender directly affected thereby, (iii) postpone any scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any date for the payment of any interest, fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender directly affected thereby, (iv) change Section 2.18(b) or (d) in a manner that would alter the manner in which payments are shared, without the written consent of each Lender, (v) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender, (vi) release any Loan Guarantor from its obligation under its Loan Guaranty (except as otherwise permitted, including pursuant to a merger, consolidation, disposition, liquidation or dissolution permitted herein or in the other Loan Documents), without the written consent of each Lender, (vii) except as provided in clause (c) of this Section or in any Collateral Document, release all or substantially all of the Collateral or subordinate any Liens on any Collateral, without the written consent of each Lender or (viii) increase the advance rates set forth in the definitions of US Borrowing Base and Netherlands Borrowing Base without the written consent of each Lender or add new categories of eligible assets without the written consent of the Supermajority Lenders; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be. The Administrative Agent may also amend the Commitment Schedule to reflect Commitment increases effected in accordance with Section 2.01(c) commitment reductions effected in accordance herewith and assignments entered into pursuant to Section 9.04. Notwithstanding the foregoing, any amendment, modification or waiver (i) to Section 2.11, (ii) to the definitions of Aggregate Availability or the definitions used in the calculation thereof, (iii) that increases the commitments hereunder in accordance with Section 2.01(c) and permits holders of such increased commitment amounts to be included in the definition of Required Lenders, any other voting provisions or any payment sharing provision, in each case, shall only require the consent of Required Lenders, the Administrative Agent and the Borrowers.

          (c) The Lenders and any other holders of Secured Obligations hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to release any Liens granted to the Administrative Agent by the Loan Parties on any Collateral (i) upon the termination of all Commitments, payment and satisfaction in full in cash of all Secured Obligations (other than Unliquidated Obligations), and the cash collateralization of all Unliquidated Obligations for which a definite claim has been submitted to the Administrative Agent in a manner satisfactory to each affected Lender, (ii) constituting property being sold or disposed of if the Loan Party disposing of such property certifies to the Administrative Agent that the sale or disposition is made in compliance with the terms of this Agreement (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting property leased to a Loan Party under a lease which has expired or been terminated or (iv) as required to effect any sale or other disposition of such Collateral in connection with

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any exercise of remedies of the Administrative Agent and the Lenders pursuant to Article VII. Except as provided in the preceding sentence, the Administrative Agent will not release any Liens on Collateral without the prior written authorization of the Required Lenders; provided that, the Administrative Agent may in its discretion, (i) release its Liens on Collateral valued in the aggregate not in excess of $10,000,000 during any calendar year without the prior written authorization of the Required Lenders and (ii) release any of its Liens in connection with, or subordinate any of its Liens to, Liens permitted by Sections 6.02(d) and (e). Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral.

          SECTION 9.03.    Expenses; Indemnity; Damage Waiver. (a) Subject to Section 9.20 the Borrowers shall pay (i) all reasonable documented out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable documented fees, charges and disbursements of one counsel per jurisdiction for the Administrative Agent, in connection with the syndication and distribution (including, without limitation, via the internet or through a service such as Intralinks) of the credit facilities provided for herein, the preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable, documented out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements of one counsel per jurisdiction for the Administrative Agent, the Issuing Bank and the Lenders, in connection with the enforcement, collection or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or similar negotiations in respect of such Loans or Letters of Credit. Expenses being reimbursed by the Borrowers under this Section include, without limiting the generality of the foregoing, costs and expenses incurred in connection with:

     (i) subject to Section 5.11, appraisals and insurance reviews;

     (ii) subject to Section 5.06, field examinations and the preparation of Reports based on the fees charged by a third party retained by the Administrative Agent or the internally allocated fees for each Person employed by the Administrative Agent with respect to each field examination;

     (iii) Taxes, fees and other charges for (A) lien and title searches and title insurance and (B) recording the Mortgages, filing financing statements and continuations, and other actions to perfect, protect, and continue the Administrative Agent’s Liens; and

     (iv) forwarding loan proceeds, collecting checks and other items of payment, and establishing and maintaining the accounts and lock boxes, and costs and expenses of preserving and protecting the Collateral.

All of the foregoing costs and expenses may be charged to the Borrowers as Revolving Loans or to another deposit account, all as described in Section 2.18(c).

          (b) The Borrowers shall, jointly and severally, indemnify the Administrative Agent, the Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all

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losses, claims, damages, penalties, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Borrower or any of their Subsidiaries, or any Environmental Liability related in any way to any Borrower or any of their Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, penalties, liabilities or related expenses are determined by a court of competent jurisdiction by final judgment to have resulted from the gross negligence or wilful misconduct of such Indemnitee or any Related Party of such Indemnitee or such Related Party shall admit such gross negligence or willful misconduct in writing in a judicial proceeding of a court of competent jurisdiction.

          (c) To the extent that the Borrowers fail to pay any amount required to be paid by it to the Administrative Agent, the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, penalty, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity as such.

          (d) To the extent permitted by applicable law, no Loan Party shall assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

          (e) All amounts due under this Section shall be payable within 10 Business Days after written demand therefor.

          SECTION 9.04.    Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrowers may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrowers without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

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          (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments (it being understood that a Lender may only assign its Revolving Commitment or any portion thereof together with such Lender’s Revolving Netherlands Sublimit or a corresponding portion thereof, and vice versa) and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

          (A) the Borrower Representative, provided that no consent of the Borrower Representative shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee;

          (B) the Administrative Agent; and

          (C) the Issuing Bank.

          (ii) Assignments shall be subject to the following additional conditions:

          (A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower Representative and the Administrative Agent otherwise consent, provided that no such consent of the Borrower Representative shall be required if an Event of Default has occurred and is continuing;

          (B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement;

          (C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and

          (D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more Credit Contacts to whom all syndicate-level information (which may contain material non-public information about the Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and state securities laws.

          For the purposes of this Section 9.04(b), the term “Approved Fund” has the following meaning:

          “Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

               (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment

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and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

               (iv) The Administrative Agent, acting for this purpose as an agent of the Borrowers, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent, the Issuing Bank and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrowers, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

               (v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.05, 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

          (c) (i) Any Lender may, without the consent of the Borrowers, the Administrative Agent, the Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrowers, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that directly affects such Participant. Subject to paragraph (c)(ii) of this Section, the Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as though it were a Lender.

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               (ii) A Participant shall not be entitled to receive any greater payment under Section 2.15, 2.16 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower Representative’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower Representative is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Section 2.17(e) as though it were a Lender.

          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

          SECTION 9.05.    Survival. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

          SECTION 9.06.    Counterparts; Integration; Effectiveness. This Agreement and any other Loan Document may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of any Loan Document by facsimile shall be effective as delivery of a manually executed counterpart of such Loan Document.

          SECTION 9.07.    Severability. Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

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          SECTION 9.08.    Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, but excluding deposits held in trust accounts) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of any Borrower or any Loan Guarantor pledging Collateral as security for the Secured Obligations of such Borrower against any of and all the Secured Obligations arising in respect of such Borrower held by such Lender, irrespective of whether or not such Lender shall have made any demand under the Loan Documents and although such obligations may be unmatured. The applicable Lender shall notify the Borrower Representative and the Administrative Agent of such set-off or application, provided that any failure to give or any delay in giving such notice shall not affect the validity of any such set-off or application under this Section. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

          SECTION 9.09.    Governing Law; Jurisdiction; Consent to Service of Process. (a) The Loan Documents (other than those containing a contrary express choice of law provision) shall be governed by and construed in accordance with the laws of the State of New York, but giving effect to federal laws applicable to national banks.

          (b) Each Loan Party hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any U.S. Federal or New York State court sitting in New York, New York in any action or proceeding arising out of or relating to any Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.

          (c) Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

          (d) Each party to this Agreement irrevocably consents, to the fullest extent it may legally and effectively do so, to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

          SECTION 9.10.    WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,

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EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

          SECTION 9.11.    Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

          SECTION 9.12.    Confidentiality. Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by Requirement of Laws or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) to the extent necessary in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Loan Parties and their obligations, (g) with the consent of the Borrower Representative or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis other than through a breach of this Section from a source other than the Borrowers. For the purposes of this Section, “Information” means all information received from the Borrowers relating to the Borrowers or their business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis prior to disclosure by the Borrowers. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

          EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12 FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE COMPANY AND ITS AFFILIATES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

          ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWERS OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE COMPANY, THE LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER

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REPRESENTS TO THE BORROWERS AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

          SECTION 9.13.    Several Obligations; Nonreliance; Violation of Law. The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. Each Lender hereby represents that it is not relying on or looking to any margin stock for the repayment of the Borrowings provided for herein. Anything contained in this Agreement to the contrary notwithstanding, neither the Issuing Bank nor any Lender shall be obligated to extend credit to the Borrowers in violation of any Requirement of Law.

          SECTION 9.14.    USA PATRIOT Act. Each Lender that is subject to the requirements of the Act hereby notifies the Borrowers that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrowers, which information includes the names and addresses of the Borrowers and other information that will allow such Lender to identify the Borrowers in accordance with the Act.

          SECTION 9.15.    Disclosure. Each Loan Party and each Lender hereby acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with any of the Loan Parties and their respective Affiliates.

          SECTION 9.16.    Appointment for Perfection. Each Lender hereby appoints the Administrative Agent and each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the Lenders, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession. Should any Lender (other than the Administrative Agent) obtain possession of any such Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent’s instructions.

          SECTION 9.17.    Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

          SECTION 9.18.    Judgment Currency. (a) If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in one currency into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the

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first currency with such other currency in the city in which it normally conducts its foreign exchange operation for the first currency on the Business Day preceding the day on which final judgment is given.

          (a) The obligation of each Borrower in respect of any sum due from it to any Lender, the Administrative Agent or the Issuing Bank hereunder shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by such Lender, Administrative Agent or Issuing Bank of any sum adjudged to be so due in the Judgment Currency such Lender, Administrative Agent or Issuing Bank may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency; if the amount of Agreement Currency so purchased is less than the sum originally due to such Lender, Administrative Agent or Issuing Bank in the Agreement Currency, such Borrower agrees notwithstanding any such judgment to indemnify such Lender, Administrative Agent or Issuing Bank against such loss, and if the amount of the Agreement Currency so purchased exceeds the sum originally due to any Lender, Administrative Agent or Issuing Bank, such Lender, Administrative Agent or Issuing Bank agrees to remit to such Borrower such excess.

          SECTION 9.19.    Netherlands Loans. (a) Each Lender of a Netherlands Loan makes the following declarations and representations to the Netherlands Borrower:

     (i) It is a Professional Market Party;

     (ii) It acknowledges that as a consequence it has no benefit from the (creditor) protection under the Netherlands Banking Act for non-Professional Market Parties; and

     (iii) It has made its own credit approval of the Netherlands Borrower.

          (b) Each declaration and representation set out in paragraph (a) above is made by each aforementioned Lender on the date of this Agreement and by any future Lender to a Netherlands Loan on the date of becoming a Lender of a Netherlands Loan.

          (c) If on the date on which a borrower incorporated in the Netherlands accedes to this Agreement, it is a requirement under Netherlands law that each Lender needs to be qualified as a Professional Market Party, each declaration and representation set out in paragraph (a) above is made to such borrower incorporated in the Netherlands on such date by each of the then current Lenders to a Netherlands Loan.

          (d) Each of the parties hereto agrees to and acknowledges the provisions set forth in clause 4 (Parallel Debt) of the Netherlands Security Agreements.

          SECTION 9.20.    Several Liability of Netherlands Loan Parties. Notwithstanding anything herein or in the other Loan Documents to the contrary, the parties hereto acknowledge and agree that the Netherlands Loan Parties shall not be liable for any Obligations other than those arising out of or relating to Loans made to the Netherlands Borrower.

          SECTION 9.21.    Euro Loans. If by reason of internal policies, legal requirements and limitations or lack of ready access to certain currencies, certain Lenders may not be able to make and maintain Commitments to or make Loans to certain of the Borrowers or make Loans in Euros to certain of the Borrowers, Chase may agree to assume such Commitments or make such Loans in place of such Lenders. If Chase agrees to make such Commitments, it shall agree with each such Lender that it will

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make or maintain one or more Commitments in the place of such Lender and shall record its agreement with respect thereto in the Register and such Lender shall thereby be released from such Commitment or shall not be required to make or maintain such Loans and such Commitment shall thereafter be included within Chase’s Commitment for all purposes hereunder.

ARTICLE X

LOAN GUARANTY

          SECTION 10.01.    Guaranty.

          (a) Each US Loan Guarantor hereby agrees that it is jointly and severally liable for, and, as primary obligor and not merely as surety, absolutely and unconditionally guarantees to the Lenders the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the US Secured Obligations and all reasonable, documented out-of-pocket costs and expenses including, without limitation, all court costs and attorneys’ and paralegals’ fees (including allocated costs of in-house counsel and paralegals) and expenses paid or incurred by the Administrative Agent, the Issuing Bank and the Lenders in endeavoring to collect all or any part of the US Secured Obligations from, or in prosecuting any action against, the US Borrower, any US Loan Guarantor or any other guarantor of all or any part of the US Secured Obligations (such costs and expenses, together with the US Secured Obligations, collectively the “US Guaranteed Obligations”). Each US Loan Guarantor further agrees that the US Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. All terms of this Loan Guaranty apply to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any portion of the US Guaranteed Obligations.

          (b) Each Loan Guarantor hereby agrees that it is jointly and severally liable for, and, as primary obligor and not merely as surety, absolutely and unconditionally guarantees to the Lenders the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Netherlands Secured Obligations and all reasonable, documented out-of-pocket costs and expenses including, without limitation, all court costs and attorneys’ and paralegals’ fees (including allocated costs of in-house counsel and paralegals) and expenses paid or incurred by the Administrative Agent and the Lenders in endeavoring to collect all or any part of the Netherlands Secured Obligations from, or in prosecuting any action against, any Borrower, any Loan Guarantor or any other guarantor of all or any part of the Netherlands Secured Obligations (such costs and expenses, together with the Netherlands Secured Obligations, collectively the “Netherlands Guaranteed Obligations” and together with the US Guaranteed Obligations, the “Guaranteed Obligations”). Each Loan Guarantor further agrees that the Netherlands Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. All terms of this Loan Guaranty apply to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any portion of the Netherlands Guaranteed Obligations.

          SECTION 10.02.    Guaranty of Payment. This Loan Guaranty is a guaranty of payment and not of collection. Each Loan Guarantor waives any right to require the Administrative Agent, the Issuing Bank or any Lender to sue any Borrower, any Loan Guarantor, any other guarantor, or any other person obligated for all or any part of the Guaranteed Obligations (each, an “Obligated Party”), or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.

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          SECTION 10.03.    No Discharge or Diminishment of Loan Guaranty. (a) Except as otherwise provided for herein, the obligations of each Loan Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Guaranteed Obligations), including: (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of any Borrower or any other guarantor of or other person liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party, or their assets or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or other rights which any Loan Guarantor may have at any time against any Obligated Party, the Administrative Agent, the Issuing Bank, any Lender, or any other person, whether in connection herewith or in any unrelated transactions.

          (b) The obligations of each Loan Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any part thereof.

          (c) Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of the Administrative Agent, the Issuing Bank or any Lender to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection, or invalidity of any indirect or direct security for the obligations of any Borrower for all or any part of the Guaranteed Obligations or any obligations of any other guarantor of or other person liable for any of the Guaranteed Obligations; (iv) any action or failure to act by the Administrative Agent, the Issuing Bank or any Lender with respect to any collateral securing any part of the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of the Guaranteed Obligations).

          SECTION 10.04.    Defenses Waived. To the fullest extent permitted by applicable law, each Loan Guarantor hereby waives any defense based on or arising out of any defense of any Borrower or any Loan Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or the cessation from any cause of the liability of any Borrower or any Loan Guarantor, other than the payment in full in cash of the Guaranteed Obligations other than any Unliquidated Obligations for which no definite claim has been submitted. Without limiting the generality of the foregoing, each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any person against any Obligated Party, or any other person. The Administrative Agent may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without affecting or impairing in any way the liability of such Loan Guarantor under this Loan Guaranty except to the extent the Guaranteed Obligations have been fully and indefeasibly paid in cash. To the fullest extent permitted by applicable law, each Loan Guarantor waives any defense arising out of any such election even though that election

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may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Loan Guarantor against any Obligated Party or any security.

          SECTION 10.05.    Rights of Subrogation. No Loan Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification that it has against any Obligated Party, or any collateral, until the Loan Parties and the Loan Guarantors have fully performed all their obligations to the Administrative Agent, the Issuing Bank and the Lenders.

          SECTION 10.06.    Reinstatement; Stay of Acceleration. If at any time any payment of any portion of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, or reorganization of any Borrower or otherwise, each Loan Guarantor’s obligations under this Loan Guaranty (if any) with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not the Administrative Agent, the Issuing Bank and the Lenders are in possession of this Loan Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Loan Guarantors to the extent such Loan Guarantor has guaranteed such Guaranteed Obligation forthwith on demand by the Lender.

          SECTION 10.07.    Information. Each Loan Guarantor assumes all responsibility for being and keeping itself informed of the Borrowers’ financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that neither the Administrative Agent, the Issuing Bank nor any Lender shall have any duty to advise any Loan Guarantor of information known to it regarding those circumstances or risks.

          SECTION 10.08.    Termination. The Lenders may continue to make loans or extend credit to the Borrowers based on this Loan Guaranty until five days after it receives written notice of termination from any Loan Guarantor. Notwithstanding receipt of any such notice, each Loan Guarantor will continue to be liable to the Lenders for any Guaranteed Obligations which such Loan Guarantor has guaranteed, created, assumed or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals, extensions, modifications and amendments with respect to, or substitutions for, all or any part of that Guaranteed Obligations which such Loan Guarantor has guaranteed.

          SECTION 10.09.    Taxes. All payments of the Guaranteed Obligations will be made by each Loan Guarantor free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if any Loan Guarantor shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had such payment been made by the applicable Borrower in accordance with the terms of this Agreement, (ii) such Loan Guarantor shall make such deductions and (iii) such Loan Guarantor shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

          SECTION 10.10.    Maximum Liability. The provisions of this Loan Guaranty are severable, and in any action or proceeding involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Loan Guarantor under this Loan Guaranty would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of such Loan Guarantor’s liability

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under this Loan Guaranty, then, notwithstanding any other provision of this Loan Guaranty to the contrary, the amount of such liability shall, without any further action by the Loan Guarantors or the Lenders, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined hereunder being the relevant Loan Guarantor’s “Maximum Liability”. This Section with respect to the Maximum Liability of each Loan Guarantor is intended solely to preserve the rights of the Lenders to the maximum extent not subject to avoidance under applicable law, and no Loan Guarantor nor any other person or entity shall have any right or claim under this Section with respect to such Maximum Liability, except to the extent necessary so that the obligations of any Loan Guarantor hereunder shall not be rendered voidable under applicable law. Each Loan Guarantor agrees that the Guaranteed Obligations guaranteed by such Loan Guarantor may at any time and from time to time exceed the Maximum Liability of each Loan Guarantor without impairing this Loan Guaranty or affecting the rights and remedies of the Lenders hereunder, provided that, nothing in this sentence shall be construed to increase any Loan Guarantor’s obligations hereunder beyond its Maximum Liability.

          SECTION 10.11.    Contribution. (a) In the event any US Loan Guarantor (a “US Paying Guarantor”) shall make any payment or payments under this Loan Guaranty in respect of the US Guaranteed Obligations or shall suffer any loss as a result of any realization upon any collateral granted by it to secure its obligations under this Loan Guaranty in respect of the US Guaranteed Obligations, each other US Loan Guarantor (each a “US Non-Paying Guarantor”) shall contribute to such US Paying Guarantor an amount equal to such US Non-Paying Guarantor’s “US Applicable Percentage” of such payment or payments made, or losses suffered, by such US Paying Guarantor. For purposes of this Article X, each US Non-Paying Guarantor’s “US Applicable Percentage” with respect to any such payment or loss by a US Paying Guarantor shall be determined as of the date on which such payment or loss was made by reference to the ratio of (i) such US Non-Paying Guarantor’s Maximum Liability as of such date in respect of the US Guaranteed Obligations (without giving effect to any right to receive, or obligation to make, any contribution hereunder) or, if such US Non-Paying Guarantor’s Maximum Liability in respect of the US Guaranteed Obligations has not been determined, the aggregate amount of all monies received by such US Non-Paying Guarantor from the US Borrower after the date hereof (whether by loan, capital infusion or by other means) to (ii) the aggregate Maximum Liability of all US Loan Guarantors hereunder in respect of the US Guaranteed Obligations (including such US Paying Guarantor) as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder), or to the extent that a Maximum Liability has not been determined for any US Loan Guarantor in respect of the US Guaranteed Obligations, the aggregate amount of all monies received by such US Loan Guarantors from the US Borrower after the date hereof (whether by loan, capital infusion or by other means). Nothing in this provision shall affect any US Loan Guarantor’s several liability for the entire amount of the US Guaranteed Obligations (up to such Loan Guarantor’s Maximum Liability in respect of the US Guaranteed Obligations).

          (b) In the event any Loan Guarantor (a “Paying Guarantor”) shall make any payment or payments under this Loan Guaranty in respect of the Netherlands Guaranteed Obligations or shall suffer any loss as a result of any realization upon any collateral granted by it to secure its obligations under this Loan Guaranty in respect of the Netherlands Guaranteed Obligations, each other Loan Guarantor (each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an amount equal to such Non-Paying Guarantor’s “Applicable Percentage” of such payment or payments made, or losses suffered, by such Paying Guarantor. For purposes of this Article X, each Non-Paying Guarantor’s “Applicable Percentage” with respect to any such payment or loss by a Paying Guarantor shall be determined as of the date on which such payment or loss was made by reference to the ratio of (i) such Non-Paying Guarantor’s Maximum Liability as of such date in respect of the Netherlands Guaranteed Obligations (without giving effect to any right to receive, or obligation to make, any contribution hereunder) or, if such Non-Paying Guarantor’s Maximum Liability in respect of the Netherlands

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Guaranteed Obligations has not been determined, the aggregate amount of all monies received by such Non-Paying Guarantor from the Borrowers after the date hereof (whether by loan, capital infusion or by other means) to (ii) the aggregate Maximum Liability of all Loan Guarantors hereunder in respect of the Netherlands Guaranteed Obligations (including such Paying Guarantor) as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder), or to the extent that a Maximum Liability in respect of the Netherlands Guaranteed Obligations has not been determined for any Loan Guarantor, the aggregate amount of all monies received by such Loan Guarantors from the Borrowers after the date hereof (whether by loan, capital infusion or by other means). Nothing in this provision shall affect any Loan Guarantor’s several liability for the entire amount of the Netherlands Guaranteed Obligations (up to such Loan Guarantor’s Maximum Liability in respect of the Netherlands Guaranteed Obligations).

          (c) Each of the Loan Guarantors covenants and agrees that its right to receive any contribution under this Loan Guaranty from a US Paying Guarantor or Non-Paying Guarantor shall be subordinate and junior in right of payment to the payment in full in cash of the Guaranteed Obligations. This provision is for the benefit of both the Administrative Agent, the Issuing Bank, the Lenders and the Loan Guarantors and may be enforced by any one, or more, or all of them in accordance with the terms hereof.

          SECTION 10.12.    Liability Cumulative. The liability of each Loan Party as a Loan Guarantor under this Article X is in addition to and shall be cumulative with all liabilities of each Loan Party to the Administrative Agent, the Issuing Bank and the Lenders under this Agreement and the other Loan Documents to which such Loan Party is a party without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

          SECTION 10.13.    Effect of Netherlands Civil Code. Notwithstanding the foregoing provisions of this Section 10, no Loan Party residing or incorporated in The Netherlands shall, or shall be deemed to, guarantee any Obligations or otherwise bind itself (whether by indemnification or otherwise) to the extent that if included, such act would constitute unlawful financial assistance within the meaning of Article 98c or 207c of Book 2 of the Netherlands Civil Code.

ARTICLE XI

THE BORROWER REPRESENTATIVE

          SECTION 11.01.    Appointment; Nature of Relationship. Libbey Glass Inc. is hereby appointed by each of the Borrowers as its contractual representative (herein referred to as the “Borrower Representative”) hereunder and under each other Loan Document, and each of the Borrowers irrevocably authorizes the Borrower Representative to act as the contractual representative of such Borrower with the rights and duties expressly set forth herein and in the other Loan Documents. The Borrower Representative agrees to act as such contractual representative upon the express conditions contained in this Article XI. The Administrative Agent and the Lenders, and their respective officers, directors, agents or employees, shall not be liable to the Borrower Representative or any Borrower for any action taken or omitted to be taken by the Borrower Representative or the Borrowers pursuant to this Section 11.01.

          SECTION 11.02.    Powers. The Borrower Representative shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Borrower Representative by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Borrower Representative shall have no implied duties to the Borrowers, or any obligation to the Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Borrower Representative.

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          SECTION 11.03.    Employment of Agents. The Borrower Representative may execute any of its duties as the Borrower Representative hereunder and under any other Loan Document by or through authorized officers.

          SECTION 11.04.    Notices. Each Borrower shall immediately notify the Borrower Representative of the occurrence of any Default or Unmatured Default hereunder referring to this Agreement describing such Default or Unmatured Default and stating that such notice is a “notice of default.” In the event that the Borrower Representative receives such a notice, the Borrower Representative shall give prompt notice thereof to the Administrative Agent and the Lenders. Any notice provided to the Borrower Representative hereunder shall constitute notice to each Borrower on the date received by the Borrower Representative.

          SECTION 11.05.    Successor Borrower Representative. Upon the prior written consent of the Administrative Agent, the Borrower Representative may resign at any time, such resignation to be effective upon the appointment of a successor Borrower Representative. The Administrative Agent shall give prompt written notice of such resignation to the Lenders.

          SECTION 11.06.    Execution of Loan Documents; Borrowing Base Certificate. The Borrowers hereby empower and authorize the Borrower Representative, on behalf of the Borrowers, to execute and deliver to the Administrative Agent and the Lenders the Loan Documents and all related agreements, certificates, documents, or instruments as shall be necessary or appropriate to effect the purposes of the Loan Documents, including without limitation, the Aggregate Borrowing Base Certificate and the Borrowing Base Certificate of each Borrower and the Compliance Certificates. Each Borrower agrees that any action taken by the Borrower Representative or the Borrowers in accordance with the terms of this Agreement or the other Loan Documents, and the exercise by the Borrower Representative of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Borrowers.

          SECTION 11.07.    Reporting. Each Borrower hereby agrees that such Borrower shall furnish promptly after each fiscal month to the Borrower Representative a copy of its Borrowing Base Certificate and any other certificate or report required hereunder or requested by the Borrower Representative on which the Borrower Representative shall rely to prepare the Aggregate Borrowing Base Certificate and the Borrowing Base Certificate of each Borrower and Compliance Certificates required pursuant to the provisions of this Agreement.

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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

BORROWERS: LIBBEY GLASS INC.
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel, and Secretary
LIBBEY EUROPE B.V.
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Proxyholder
OTHER LOAN PARTIES: LIBBEY INC.
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel, and Secretary
LGA3 CORP.
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel, and Secretary
THE DRUMMOND GLASS COMPANY
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel, and Secretary

Signature Page to the Credit Agreement

LGA4 CORP.
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel, and Secretary
SYRACUSE CHINA COMPANY
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel, and Secretary
LGFS INC.
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel, and Secretary
WORLD TABLEWARE INC.
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel, and Secretary
TRAEX COMPANY
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel, and Secretary
LGC CORP.
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel, and Secretary

Signature Page to the Credit Agreement

LGAC LLC
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel, and Secretary
LIBBEY.COM LLC
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel, and Secretary
CRISA INDUSTRIAL, L.L.C.
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel, and Secretary
LIBBEY INTERNATIONAL C.V.
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel, and Secretary
B.V. LEERDAM CRYSTAL
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Proxyholder
B.V. KONINKLIJKE NEDERLANDSE GLASFABRIEK LEERDAM
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Proxyholder

Signature Page to the Credit Agreement

LIBBEY EUROPE FINANCE CO. B.V.
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Proxyholder
LIBBEY MEXICO HOLDINGS B.V.
By:	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Proxyholder

Signature Page to the Credit Agreement

JPMORGAN CHASE BANK, N.A., individually, as Administrative Agent, Issuing Bank and Swingline Lender with respect to the US Loans
By:	/s/ John Psellas
	Name:	John Psellas
	Title:	Vice President
J.P. MORGAN EUROPE LIMITED., individually, as Administrative Agent, Issuing Bank and Swingline Lender with respect to the Netherlands Loans
By:	/s/ Tim Jacob
	Name:	Tim Jacob
	Title:	Senior Vice President

Signature Page to the Credit Agreement

(Name of Lender)
By:
	Name:
	Title:
By:
	Name:
	Title:

Signature Page to the Credit Agreement

EX-4.2

EXHIBIT 4.2

EXECUTION VERSION

LIBBEY GLASS INC.

AND

THE BANK OF NEW YORK TRUST COMPANY, N.A.
AS TRUSTEE

Floating Rate Senior Secured Notes due 2011

INDENTURE

Dated as of June 16, 2006

Table of Contents

		Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1.	Definitions		1
SECTION 1.2.	Other Definitions		33
SECTION 1.3.	Incorporation by Reference of Trust Indenture Act		34
SECTION 1.4.	Rules of Construction		35
ARTICLE II
THE SECURITIES
SECTION 2.1.	Form, Dating and Terms		35
SECTION 2.2.	Execution and Authentication		43
SECTION 2.3.	Registrar and Paying Agent		44
SECTION 2.4.	Paying Agent to Hold Money in Trust		45
SECTION 2.5.	Holder Lists		45
SECTION 2.6.	Transfer and Exchange		46
SECTION 2.7.	Form of Certificate to be Delivered in Connection with Transfers to IAIs		49
SECTION 2.8.	Form of Certificate to be Delivered in Connection with Transfers Pursuant to Regulation S		51
SECTION 2.9.	Mutilated, Destroyed, Lost or Stolen Securities		52
SECTION 2.10.	Outstanding Securities		53
SECTION 2.11.	Temporary Securities		53
SECTION 2.12.	Cancellation		54
SECTION 2.13.	Payment of Interest; Defaulted Interest		54
SECTION 2.14.	Computation of Interest		55
SECTION 2.15.	CUSIP, Common Code and ISIN Numbers		55
ARTICLE III
COVENANTS
SECTION 3.1.	Payment of Securities		55
SECTION 3.2.	Limitation on Indebtedness		56
SECTION 3.3.	Limitation on Restricted Payments		62
SECTION 3.4.	Limitation on Restrictions on Distributions from Restricted Subsidiaries		68
SECTION 3.5.	Limitation on Sales of Assets and Subsidiary Stock		70
SECTION 3.6.	Limitation on Liens		73
SECTION 3.7.	Limitation on Sale/Leaseback Transaction		74
SECTION 3.8.	Limitation on Affiliate Transactions		74
SECTION 3.9.	Limitation on Sale of Capital Stock of Restricted Subsidiaries		76
SECTION 3.10.	Limitation on Lines of Business		76

 i

		Page
SECTION 3.11.	Change of Control		76
SECTION 3.12.	SEC Reports		78
SECTION 3.13.	Future Subsidiary Guarantors		79
SECTION 3.14.	Maintenance of Office or Agency		79
SECTION 3.15.	Corporate Existence		80
SECTION 3.16.	Payment of Taxes and Other Claims		80
SECTION 3.17.	Payments for Consent		81
SECTION 3.18.	Compliance Certificate		81
SECTION 3.19.	Further Instruments and Acts		81
SECTION 3.20.	Statement by Officers as to Default		81
ARTICLE IV
SUCCESSOR COMPANY
SECTION 4.1.	Merger and Consolidation		81
ARTICLE V
REDEMPTION OF SECURITIES
SECTION 5.1.	Redemption		85
SECTION 5.2.	Applicability of Article		85
SECTION 5.3.	Election to Redeem; Notice to Trustee		85
SECTION 5.4.	Selection by Trustee of Securities to Be Redeemed		85
SECTION 5.5.	Notice of Redemption		86
SECTION 5.6.	Deposit of Redemption Price		87
SECTION 5.7.	Securities Payable on Redemption Date		87
SECTION 5.8.	Securities Redeemed in Part		87
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1.	Events of Default		87
SECTION 6.2.	Acceleration		90
SECTION 6.3.	Other Remedies		91
SECTION 6.4.	Waiver of Past Defaults		91
SECTION 6.5.	Control by Majority		91
SECTION 6.6.	Limitation on Suits		92
SECTION 6.7.	Rights of Holders to Receive Payment		92
SECTION 6.8.	Collection Suit by Trustee		92
SECTION 6.9.	Trustee May File Proofs of Claim		93
SECTION 6.10.	Priorities		93
SECTION 6.11.	Undertaking for Costs		93
ARTICLE VII
TRUSTEE
SECTION 7.1.	Duties of Trustee		93
SECTION 7.2.	Rights of Trustee		95

 ii

		Page
SECTION 7.3.	Individual Rights of Trustee		96
SECTION 7.4.	Trustee’s Disclaimer		96
SECTION 7.5.	Notice of Defaults		96
SECTION 7.6.	Reports by Trustee to Holders		97
SECTION 7.7.	Compensation and Indemnity		97
SECTION 7.8.	Replacement of Trustee		98
SECTION 7.9.	Successor Trustee by Merger		99
SECTION 7.10.	Eligibility; Disqualification		99
SECTION 7.11.	Preferential Collection of Claims Against the Company		99
SECTION 7.12.	Trustee’s Application for Instruction from the Company		99
SECTION 7.13.	Paying Agents		100
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1.	Discharge of Liability on Securities; Defeasance		100
SECTION 8.2.	Conditions to Defeasance		102
SECTION 8.3.	Application of Trust Money		103
SECTION 8.4.	Repayment to the Company		103
SECTION 8.5.	Indemnity for U.S. Government Obligations		103
SECTION 8.6.	Reinstatement		104
ARTICLE IX
AMENDMENTS
SECTION 9.1.	Without Consent of Holders		104
SECTION 9.2.	With Consent of Holders		105
SECTION 9.3.	Compliance with Trust Indenture Act		107
SECTION 9.4.	Revocation and Effect of Consents and Waivers		107
SECTION 9.5.	Notation on or Exchange of Securities		107
SECTION 9.6.	Trustee To Sign Amendments		107
ARTICLE X
NOTE GUARANTEES
SECTION 10.1.	Note Guarantees		108
SECTION 10.2.	Limitation on Liability; Termination, Release and Discharge		109
SECTION 10.3.	Right of Contribution		110
SECTION 10.4.	No Subrogation		110
ARTICLE XI
COLLATERAL
SECTION 11.1.	The Collateral		111
SECTION 11.2.	Maintenance of Collateral		112
SECTION 11.3.	Further Assurances		112
SECTION 11.4.	After Acquired Property		112
SECTION 11.5.	Agreements Requiring Application of Proceeds of Collateral		113

 iii

		Page
SECTION 11.6.	Real Estate Mortgages and Filings and Leasehold Interests		113
SECTION 11.7.	Release of Liens on the Collateral		114
SECTION 11.8.	Authorization of Actions to be Taken by the Trustee or the Collateral Agent Under the Collateral Documents		115
SECTION 11.9.	Acknowledgment by Holders		117
ARTICLE XII
MISCELLANEOUS
SECTION 12.1.	Trust Indenture Act Controls		117
SECTION 12.2.	Notices		117
SECTION 12.3.	Communication by Holders with other Holders		118
SECTION 12.4.	Certificate and Opinion as to Conditions Precedent		118
SECTION 12.5.	Statements Required in Certificate or Opinion		119
SECTION 12.6.	When Securities Disregarded		119
SECTION 12.7.	Rules by Trustee, Paying Agent and Registrar		119
SECTION 12.8.	Legal Holidays		119
SECTION 12.9.	GOVERNING LAW		119
SECTION 12.10.	No Recourse Against Others		120
SECTION 12.11.	Successors		120
SECTION 12.12.	Multiple Originals		120
SECTION 12.13.	Qualification of Indenture		120
SECTION 12.14.	Table of Contents; Headings		120
SECTION 12.15.	Designated Senior Indebtedness		120
SECTION 12.16.	Force Majeure		120
SECTION 12.17.	Waiver of Jury Trial		121
SECTION 12.18.	Severability		121
SCHEDULE 3.8	Existing Affiliate Transactions
SCHEDULE 11.5	Premises and Leased Premises
EXHIBIT A	Form of the Series A Note
EXHIBIT B	Form of the Series B Note
EXHIBIT C	Form of Indenture Supplement to Add Subsidiary Guarantors

 iv

CROSS-REFERENCE TABLE

TIA	Indenture
Section	Section
310(a)(1)		7.10
(a)(2)		7.10
(a)(3)		N.A.
(a)(4)		N.A.
(a)(5)		7.10
(b)		7.3; 7.8; 7.10
(c)		N.A.
311(a)		7.11
(b)		7.11
(c)		N.A.
312(a)		2.5
(b)		12.3
(c)		12.3
313(a)		7.6
(b)(1)		7.6
(b)(2)		7.6
(c)		7.6
(d)		7.6
314(a)		3.12; 3.18; 12.5
(b)		N.A.
(c)(1)		8.1; 11.7; 12.4
(c)(2)		8.1; 11.7; 12.4
(c)(3)		N.A.
(d)		12.5
(e)		12
315(a)		7.1
(b)		7.5
(c)		7.1
(d)		7.1
(e)		6.11
316(a)(last sentence)		12.6
(a)(1)(A)		6.5
(a)(1)(B)		6.4
(a)(2)		N.A.
(b)		6.7
(c)		9.4
317(a)(1)		6.8
(a)(2)		6.9
(b)		2.4
318(a)		12.1

     N.A. means Not Applicable.

Note: This Cross-Reference Table shall not, for any purpose, be deemed to be part of this Indenture.

 v

          INDENTURE dated as of June 16, 2006, among LIBBEY GLASS INC., a Delaware corporation (the “Company” or “Libbey Glass”), LIBBEY, INC. (“Parent”) and certain subsidiaries of the Company (the “Subsidiary Guarantors” and together with Libbey Inc., the “Note Guarantors”) from time to time parties hereto and THE BANK OF NEW YORK TRUST COMPANY, N.A., a national banking association, as Trustee (the “Trustee”).

          For and in consideration of the premises and the purchase of the Securities by the Holders thereof, each party hereto covenants and agrees as follows for the benefit of the other parties and for the equal and ratable benefit of all Holders of (i) the Company’s Floating Rate Senior Secured Notes due 2011 issued on the date hereof (the “Initial Securities”), (ii) if and when issued, an unlimited principal amount of additional Floating Rate Senior Secured Notes, Series A, due 2011 in a non-registered offering or Floating Rate Senior Secured Notes, Series B, due 2011 in a registered offering of the Company, that may be offered from time to time subsequent to the Issue Date (the “Additional Securities”), (iii) if and when issued, the Company’s Floating Rate Senior Secured Notes, Series B, due 2011, that may be issued from time to time in exchange for Initial Securities or any Additional Securities in an offer registered under the Securities Act as provided in a Registration Rights Agreement (as hereinafter defined) (the “Exchange Securities,” together with the Initial Securities and Additional Securities, the “Securities”).

ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE

          SECTION 1.1. Definitions.

     “Acquired Indebtedness” means Indebtedness (i) of a Person or any of its Subsidiaries existing at the time such Person is merged with or into or becomes a Restricted Subsidiary of the Company or (ii) assumed in connection with the acquisition of assets from such Person, in each case whether or not Incurred by such Person in connection with, or in anticipation or contemplation of, such Person merging into, or becoming a Restricted Subsidiary of the Company or such acquisition. Acquired Indebtedness shall be deemed to have been Incurred, with respect to clause (i) of the preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with respect to clause (ii) of the preceding sentence, on the date of consummation of such acquisition of assets.

     “Acquisition” means the acquisition by certain Subsidiaries of the Company of 51% of the Capital Stock of Vitrocrisa Holding, S. de R.L. de C.V. and related companies.

     “Added Historical Amount” means the special charges in the amounts set forth in and described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Special Charges” in the Offering Memorandum, but only to the extent such special charges occurred in the consecutive four-quarter reference period referred to in the definition of Consolidated Coverage Ratio.

     “Additional Assets” means:

(1)	any property, plant or equipment or other asset (excluding working capital for the avoidance of doubt) to be used by the Company or a Restricted Subsidiary in a Related Business;
(2)	the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or a Restricted Subsidiary; or
(3)	Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

provided, however, that, in the case of clauses (2) and (3), such Restricted Subsidiary is primarily engaged in a Related Business.

     “Additional Securities” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

     “Affiliate” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any Person means the possession, directly or indirectly, of the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; provided that exclusively for purposes of Section 3.8, beneficial ownership of 10% or more of the Voting Stock of a Person shall be deemed to be control. For purpose of this definition, terms “controlling” and “controlled” have meanings correlative to the foregoing.

     “Asset Disposition” means any direct or indirect sale, lease (other than an operating lease entered into in the ordinary course of business), transfer, issuance or other disposition, or a series of related sales, leases, transfers, issuances or dispositions that are part of a common plan, of shares of Capital Stock of a Subsidiary (other than directors’ qualifying shares), property or other assets (each referred to for the purposes of this definition as a “disposition”) by the Company or any of its Restricted Subsidiaries, including any disposition by means of a merger, consolidation or similar transaction.

     Notwithstanding the preceding, the following items shall not be deemed to be Asset Dispositions:

(1) a disposition of assets by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary; provided that in the case of a transfer of Collateral, the transferee shall cause such amendments, supplements or other instruments to be executed, filed and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral pledged by or transferred to the transferee, together with such financing statements or comparable documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a

2

	financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions;
(2)	the sale of Cash Equivalents in the ordinary course of business;
(3)	a disposition of inventory or products or a sale of services in the ordinary course of business;
(4)	a disposition of obsolete or worn out equipment or equipment that is no longer useful in the conduct of the business of the Company and its Restricted Subsidiaries and that is disposed of in each case in the ordinary course of business;
(5)	transactions permitted under Section 4.1;
(6)	an issuance of Capital Stock by a Restricted Subsidiary to the Company or by a Restricted Subsidiary to a Restricted Subsidiary (other than a Receivables Entity);
(7)	for purposes of Section 3.5 only, the making of a Permitted Investment (other than a Permitted Investment to the extent such transaction results in the receipt of cash or Cash Equivalents by the Company or its Restricted Subsidiaries) or a disposition subject to Section 3.3;
(8)	sales of accounts receivable and related assets or an interest therein to a Receivables Entity;
(9)	dispositions of assets or issuance or sale of Capital Stock of any Restricted Subsidiary in any transaction or series of related transactions with an aggregate fair market value of less than $2.0 million;
(10)	the creation of a Permitted Lien and dispositions in connection with Permitted Liens;
(11)	dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;
(12)	the issuance by a Restricted Subsidiary of Preferred Stock that is permitted by Section 3.2;
(13)	the licensing or sublicensing of intellectual property or other general intangibles and licenses, leases or subleases of other property in the ordinary course of business which do not materially interfere with the business of the Company and its Restricted Subsidiaries;
(14)	any sale of Capital Stock, Indebtedness or other securities of, an Unrestricted Subsidiary (with the exception of Investments in Unrestricted Subsidiaries

3

	acquired pursuant to clauses (11) or (16) of the definition of “Permitted Investments” or clause (14) of the second paragraph of Section 3.3);
(15)	the sale of any property built or acquired by the Company or any Restricted Subsidiary after the Issue Date in a Sale/Leaseback Transaction within three months of the construction or acquisition of such property; and
(16)	foreclosure on assets.

     “Attributable Indebtedness” in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate implicit in the transaction) of the total obligations of the lessee for net rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended), determined in accordance with GAAP; provided, however, that if such Sale/ Leaseback Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capitalized Lease Obligations.”

     “Average Life” means, as of the date of determination, with respect to any Indebtedness or Preferred Stock, the quotient obtained by dividing (1) the sum of the products of the numbers of years from the date of determination to the date or dates of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Preferred Stock multiplied by the amount of each such payment by (2) the sum of all such payments.

     “Bankruptcy Law” means Title 11 of the United States Code or any similar federal or state law for the relief of debtors.

     “Board of Directors” means, as to any Person, the board of directors or managers, as applicable, of such Person or any duly authorized committee thereof.

     “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of a Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.

     “Borrowing Base” means, as of the date of determination, an amount equal to the sum, without duplication of (1) up to 85% of the net book value of the Company’s and its Restricted Subsidiaries’ accounts receivable at such date and (2) up to 65% of the net book value of the Company’s and its Restricted Subsidiaries’ inventory at such date. Net book value shall be determined in accordance with GAAP and shall be calculated using amounts reflected on the most recent available balance sheet (it being understood that the accounts receivable and inventories of an acquired business may be included if such acquisition has been completed on or prior to the date of determination).

     “Business Day” means each day that is not a Saturday, Sunday or other day on which banking institutions in New York, New York or a place of payment under this Indenture are authorized or required by law to close.

4

     “Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock and limited liability or partnership interests (whether general or limited), but excluding any debt securities convertible into such equity.

     “Capitalized Lease Obligations” means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation will be the capitalized amount of such obligation at the time any determination thereof is to be made as determined in accordance with GAAP, and the Stated Maturity thereof will be the date of the last payment of rent or any other amount due under such lease prior to the first date such lease may be terminated without penalty.

     “Cash Equivalents” means:

(1)	U.S. dollars, or in the case of the Company or any Foreign Subsidiary, such local currencies held by it from time to time in the ordinary course of business;
(2)	securities issued or directly and fully guaranteed or insured by the U.S. Government or any agency or instrumentality of the United States (provided that the full faith and credit of the U.S. Government is pledged in support thereof), having maturities of not more than one year from the date of acquisition;
(3)	marketable general obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition of the United States (provided that the full faith and credit of the United States is pledged in support thereof) and, at the time of acquisition, having a credit rating of “A” or better from either Standard & Poor’s Ratings Services or Moody’s Investors Service, Inc.;
(4)	certificates of deposit, time deposits, eurodollar time deposits, overnight bank deposits or bankers’ acceptances having maturities of not more than one year from the date of acquisition thereof issued by any commercial bank having combined capital and surplus in excess of $500 million;
(5)	repurchase obligations with a term of not more than thirty days for underlying securities of the types described in clauses (2), (3) and (4), entered into with any bank meeting the qualifications specified in clause (4) above;
(6)	commercial paper rated at the time of acquisition thereof at least “A-2” or the equivalent thereof by Standard & Poor’s Ratings Services or “P-2” or the equivalent thereof by Moody’s Investors Service, Inc., or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of investments, and in any case maturing within one year after the date of acquisition thereof; and

5

(7) interests in any investment company or money market fund that invests 95% or more of its assets in instruments of the type specified in clauses (1) through (6) above.

     “Change of Control” means the occurrence of any of the following:

(1)	the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any “person” or “group” of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that such person or group shall be deemed to have “beneficial ownership” of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of the total voting power of the Voting Stock of the Company or the Parent (or its successor by merger, consolidation or purchase of all or substantially all of its assets) (for the purposes of this clause, such person or group shall be deemed to beneficially own any Voting Stock of the Company or the Parent held by a parent entity, if such person or group “beneficially owns” (as defined above), directly or indirectly, more than 35% of the voting power of the Voting Stock of such parent entity); or
(2)	the first day on which a majority of the members of the Board of Directors of the Company or the Parent are not Continuing Directors; or
(3)	the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Parent or the Company and its Restricted Subsidiaries taken as a whole to any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act); or
(4)	the adoption by the stockholders of the Company or the Parent of a plan or proposal for the liquidation or dissolution of the Company or the Parent.

     “Code” means the United States Internal Revenue Code of 1986, as amended.

     “Collateral” means all property and tangible and intangible assets, whether now owned or hereafter acquired, in which Liens are, from time to time, granted to secure the Securities and the Note Guarantees pursuant to the Collateral Documents.

     “Collateral Agent” means The Bank of New York Trust Company, N.A., acting as the collateral agent for the holders of the Securities, the Trustee and any holders of Pari Passu Secured Indebtedness (including any agent therefor) under the Collateral Documents.

     “Collateral Documents” means the Mortgages, security agreements, pledge agreements, agency agreements and other instruments and documents executed and delivered pursuant to this Indenture or any of the foregoing, as the same may be amended, supplemented or otherwise modified from time to time and pursuant to which Collateral is pledged, assigned or granted to or on behalf of the Collateral Agent for the ratable benefit of the holders of the Securities and the

6

Trustee and the holders of any Pari Passu Secured Indebtedness or notice of such pledge, assignment or grant is given.

     “Commodity Agreement” means any commodity futures contract, commodity option or other similar agreement or arrangement entered into by the Company or any Restricted Subsidiary designed to protect the Company or any of its Restricted Subsidiaries against fluctuations in the price of commodities actually used in the ordinary course of business of the Company and its Restricted Subsidiaries.

     “Common Stock” means with respect to any Person, any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or nonvoting) of such Person’s common stock whether or not outstanding on the Issue Date, and includes, without limitation, all series and classes of such common stock.

     “Company” means Libbey Glass Inc., or its successors and assigns.

     “Consolidated Coverage Ratio” means as of any date of determination, with respect to any Person, the ratio of (x) the aggregate amount of Consolidated EBITDA of such Person for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which financial statements are in existence to (y) Consolidated Interest Expense for such four fiscal quarters, provided, however, that:

(1) if the Company or any Restricted Subsidiary:

(a)

has Incurred any Indebtedness since the beginning of such period that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, Consolidated EBITDA and Consolidated Interest Expense for such period will be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period (except that in making such computation, the amount of Indebtedness under any revolving credit facility outstanding on the date of such calculation will be deemed to be (i) the average daily balance of such Indebtedness during such four fiscal quarters or such shorter period for which such facility was outstanding or (ii) if such facility was created after the end of such four fiscal quarters, the average daily balance of such Indebtedness during the period from the date of creation of such facility to the date of such calculation) and the discharge of any other Indebtedness repaid, repurchased, defeased or otherwise discharged with the proceeds of such new Indebtedness as if such discharge had occurred on the first day of such period; or

(b)

has repaid, repurchased, defeased or otherwise discharged any Indebtedness since the beginning of the period that is no longer outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio involves a discharge of Indebtedness (in each case other than Indebtedness Incurred

7

under any revolving credit facility unless such Indebtedness has been permanently repaid and the related commitment terminated), Consolidated EBITDA and Consolidated Interest Expense for such period will be calculated after giving effect on a pro forma basis to such discharge of such Indebtedness, including with the proceeds of such new Indebtedness, as if such discharge had occurred on the first day of such period;

(2) if since the beginning of such period the Company or any Restricted Subsidiary will have made any Asset Disposition or disposed of any company, division, operating unit, segment, business, group of related assets or line of business or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is such an Asset Disposition:

(a)

the Consolidated EBITDA for such period will be reduced by an amount equal to the Consolidated EBITDA (if positive) directly attributable to the assets that are the subject of such disposition for such period or increased by an amount equal to the Consolidated EBITDA (if negative) directly attributable thereto for such period; and

(b)

Consolidated Interest Expense for such period will be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to the Company and its continuing Restricted Subsidiaries in connection with such disposition for such period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale);

(3)

if since the beginning of such period the Company or any Restricted Subsidiary (by merger or otherwise) will have made an Investment in any Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary or is merged with or into the Company) or an acquisition of assets, including any acquisition of assets occurring in connection with a transaction causing a calculation to be made hereunder, which constitutes all or substantially all of a company, division, operating unit, segment, business, group of related assets or line of business, Consolidated EBITDA and Consolidated Interest Expense for such period will be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition occurred on the first day of such period;

(4)

if since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period) will have Incurred any Indebtedness or discharged any Indebtedness, made any disposition or any Investment or acquisition of assets that would have required an adjustment

8

pursuant to clause (1), (2) or (3) above if made by the Company or a Restricted Subsidiary during such period, Consolidated EBITDA and Consolidated Interest Expense for such period will be calculated after giving pro forma effect thereto as if such transaction occurred on the first day of such period; and

(5) any Person that is a Restricted Subsidiary on the date of determination will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period and any Person that is not a Restricted Subsidiary on the date of determination will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period.

     For purposes of this definition, whenever pro forma effect is to be given to any calculation under this definition, the pro forma calculations will be determined in good faith by a responsible financial or accounting officer of the Company (including pro forma expense and cost reductions calculated on a basis consistent with Regulation S-X under the Securities Act). If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term in excess of 12 months). If any Indebtedness that is being given pro forma effect bears an interest rate at the option of the Company, the interest rate shall be calculated by applying such optional rate chosen by the Company.

     “Consolidated EBITDA” for any period means, without duplication, the Consolidated Net Income for such period, plus the following to the extent deducted in calculating such Consolidated Net Income:

(1)	Consolidated Interest Expense; plus
(2)	Consolidated Income Taxes; plus
(3)	consolidated depreciation expense; plus
(4)	impairment charges or asset write-offs recorded in connection with the application of Financial Accounting Standard No. 142 “Goodwill and Other Intangibles”, Financial Accounting Standard No. 144 “Accounting for the Impairment or Disposal of Long Lived Assets” and amortization of intangibles pursuant to Financial Accounting Standard No. 141 “Business Combinations”; plus
(5)	any expenses or charges related to any Equity Offering, Permitted Investment, acquisition, recapitalization or Indebtedness permitted to be incurred under this Indenture (in each case whether or not consummated), deducted in such period in computing Consolidated Net Income; plus or minus
(6)	net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of Indebtedness; plus or minus

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(7)	unrealized gains or losses relating to hedging transactions and mark-to-market Indebtedness denominated in foreign currencies resulting from the application of Financial Accounting Standard No. 52 “Foreign Currency Translation”; plus
(8)	non-cash compensation charges, including any such noncash charges arising from stock options, restricted stock grants or other equity incentive programs; plus
(9)	the Added Historical Amount; plus
(10)	other non-cash charges reducing Consolidated Net Income (excluding any such non-cash charge to the extent it represents an accrual of or reserve for cash charges in any future period or amortization of a prepaid cash expense that was paid in a prior period not included in the calculation); less
(11)	noncash items increasing Consolidated Net Income of such Person for such period (excluding any items which represent the reversal of any accrual of, or reserve for, anticipated cash charges made in any prior period and excluding the accrual of revenue in the ordinary course of business).

     Notwithstanding the preceding sentence, clauses (2) through (11) relating to amounts of a Restricted Subsidiary of a Person will be added to Consolidated Net Income to compute Consolidated EBITDA of such Person only to the extent (and in the same proportion) that the net income (loss) of such Restricted Subsidiary was included in calculating the Consolidated Net Income of such Person and, to the extent the amounts set forth in clauses (2) through (11) are in excess of those necessary to offset a net loss of such Restricted Subsidiary or if such Restricted Subsidiary has net income for such period included in Consolidated Net Income, only if a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Restricted Subsidiary or its stockholders.

     “Consolidated Income Taxes” means, with respect to any Person for any period, taxes imposed upon such Person or other payments required to be made by such Person by any governmental authority which taxes or other payments are calculated by reference to the income or profits of such Person or such Person and its Restricted Subsidiaries (to the extent such income or profits were included in computing Consolidated Net Income for such period), regardless of whether such taxes or payments are required to be remitted to any governmental authority.

     “Consolidated Interest Expense” means, for any period, the total interest expense of the Company and its consolidated Restricted Subsidiaries, whether paid or accrued, plus, to the extent not included in such interest expense:

(1) interest expense attributable to Capitalized Lease Obligations and the interest portion of rent expense associated with Attributable Indebtedness in respect of the relevant lease giving rise thereto, determined as if such lease were a capitalized

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lease in accordance with GAAP and the interest component of any deferred payment obligations;

(2)	amortization of debt discount, debt issuance cost or deferred financing costs (provided that any amortization of bond premium will be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such amortization of bond premium has otherwise reduced Consolidated Interest Expense);
(3)	non-cash interest expense;
(4)	commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing;
(5)	the interest expense on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries;
(6)	costs associated with Hedging Obligations (including amortization of fees) provided, however, that if Hedging Obligations result in net benefits rather than costs, such benefits shall be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such net benefits are otherwise reflected in Consolidated Net Income;
(7)	the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period;
(8)	the product of (a) all dividends paid or payable, in cash, Cash Equivalents or Indebtedness or accrued during such period on any series of Disqualified Stock of such Person or on Preferred Stock of its Restricted Subsidiaries that are not Subsidiary Guarantors payable to a party other than the Company or a Restricted Subsidiary, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state, provincial and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP;
(9)	Receivables Fees; and
(10)	the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Company and its Restricted Subsidiaries) in connection with Indebtedness Incurred by such plan or trust.

     For the purpose of calculating the Consolidated Coverage Ratio, the calculation of Consolidated Interest Expense shall include all interest expense (including any amounts described in clauses (1) through (10) above) relating to any Indebtedness of the Company or any Restricted Subsidiary described in the final paragraph of the definition of “Indebtedness.”

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     For purposes of the foregoing, total interest expense will be determined (i) after giving effect to any net payments made or received by the Company and its Subsidiaries with respect to Interest Rate Agreements and (ii) exclusive of amounts classified as other comprehensive income in the balance sheet of the Company. Notwithstanding anything to the contrary contained herein, commissions, discounts, yield and other fees and charges Incurred in connection with any transaction pursuant to which the Company or its Restricted Subsidiaries may sell, convey or otherwise transfer or grant a security interest in any accounts receivable or related assets shall be included in Consolidated Interest Expense.

     “Consolidated Net Income” means, for any period, the net income (loss) of the Company and its consolidated Restricted Subsidiaries determined in accordance with GAAP; provided, however, that there will not be included in such Consolidated Net Income:

(1) any net income (loss) of any Person if such Person is not a Restricted Subsidiary, except that:

(a)

subject to the limitations contained in clauses (3), (4) and (5) below, the Company’s equity in the net income of any such Person for such period will be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the limitations contained in clause (2) below); and

(b)

the Company’s equity in a net loss of any such Person (other than an Unrestricted Subsidiary) for such period will be included in determining such Consolidated Net Income only to the extent such loss has been funded with cash from the Company or a Restricted Subsidiary;

(2) any net income (but not loss) of any Restricted Subsidiary if such Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Company, except that:

(a) subject to the limitations contained in clauses (3), (4) and (5) below and subject, in the case of a dividend to another Restricted Subsidiary, to the limitation contained in this clause (2), the Company’s equity in the net income of any such Restricted Subsidiary for such period will be included in such Consolidated Net Income up to the aggregate amount of cash (x) that could have been distributed by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary as a dividend, for purposes of the calculation of Consolidated EBITDA and (y) that actually is paid in cash or converted into cash, for purposes of calculating clause (c)(i) of Section 3.3; and

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(b) the Company’s equity in a net loss of any such Restricted Subsidiary for such period will be included in determining such Consolidated Net Income;

(3)	any gain (loss) realized upon the sale or other disposition of any property, plant or equipment of the Company or its consolidated Restricted Subsidiaries (including pursuant to any Sale/Leaseback Transaction) that is not sold or otherwise disposed of in the ordinary course of business and any gain (loss) realized upon the sale or other disposition of any Capital Stock of any Person;
(4)	effects of adjustments in any line item in any Person’s consolidated financial statements pursuant to GAAP resulting from the application of purchase accounting in relation to the Acquisition or any other consummated acquisition;
(5)	after-tax effect of nonrecurring restructuring, closure, plant consolidation or similar charges relating to property, plant and equipment acquired in the Acquisition or in future acquisitions that are contemplated at the time of and incurred within 12 months of the closing of such transaction;
(6)	any extraordinary gain or loss; and
(7)	the cumulative effect of a change in accounting principles.

     Any amounts distributed or otherwise transferred to Parent pursuant to clause (9) of the second paragraph of Section 3.3, without duplication of any amounts otherwise deducted in calculating Consolidated Net Income, the funds for which are provided by the Company and/or its Restricted Subsidiaries, shall be deducted in calculating the Consolidated Net Income of the Company and its Restricted Subsidiaries.

     “Continuing Directors” means, as of any date of determination, any member of the Board of Directors of the Company or the Parent, as the case may be, who: (1) was a member of such Board of Directors on the Issue Date; or (2) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of the relevant Board at the time of such nomination or election.

     “Credit Agreement Obligations” means Indebtedness outstanding under the Senior Secured Credit Agreement that is secured by a Permitted Lien described in clause (1) of the definition thereof, and all other obligations (not constituting Indebtedness) of the Company or any Note Guarantor under the Senior Secured Credit Agreement.

     “Credit Facility” means, with respect to the Company or any Subsidiary Guarantor or any Restricted Subsidiary that is a Foreign Subsidiary, one or more debt facilities (including, without limitation, the Senior Secured Credit Agreement) or commercial paper facilities with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole

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or in part from time to time (and whether or not with the original administrative agent and lenders or another administrative agent or agents or other lenders and whether provided under the original Senior Secured Credit Agreement or any other credit or other agreement or indenture).

     “Currency Agreement” means in respect of a Person any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement as to which such Person is a party or a beneficiary.

     “Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

     “Default” means any event that is, or after notice or the passage of time or both would be, an Event of Default.

     “Definitive Securities” means certificated Securities.

     “Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event:

(1)	matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;
(2)	is convertible or exchangeable for Indebtedness or Disqualified Stock (excluding Capital Stock that is convertible or exchangeable solely at the option of the Company or a Restricted Subsidiary); or
(3)	is redeemable at the option of the holder of the Capital Stock in whole or in part,

in each case on or prior to the date that is 91 days after the earlier of the date (a) of the Stated Maturity of the Securities or (b) on which there are no Securities outstanding, provided that only the portion of Capital Stock that so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date will be deemed to be Disqualified Stock; provided, further that any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of control or asset sale (each defined in a substantially similar manner to the corresponding definitions in this Indenture) shall not constitute Disqualified Stock if the terms of such Capital Stock (and all such securities into which it is convertible or for which it is ratable or exchangeable) provide that the Company may not repurchase or redeem any such Capital Stock (and all such securities into which it is convertible or for which it is ratable or exchangeable) pursuant to such provision prior to compliance by the Company with Section 3.5 and Section 3.11 of this Indenture and such repurchase or redemption complies with Section 3.3.

     “DTC” means The Depository Trust Company, its nominees and their respective successors and assigns, or such other depository institution hereinafter appointed by the Company.

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     “Equity Offering” means a public offering for cash by the Company or the Parent, as the case may be, of its Common Stock, or options, warrants or rights with respect to its Common Stock, other than (x) public offerings with respect to the Company’s or the Parent’s, as the case may be, Common Stock, or options, warrants or rights, registered on Form S-4 or S-8, (y) an issuance to any Subsidiary or (z) any offering of Common Stock issued in connection with a transaction that constitutes a Change of Control.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

     “Exchange Offer” shall have the meaning set forth in the Registration Rights Agreement.

     “Exchange Securities” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

     “Foreign Assets” means the aggregate assets held by, or related to, the Foreign Subsidiaries of the Company determined in accordance with GAAP as disclosed in the financial statements or in the footnotes to the financial statements of the Company most recently made available in accordance with this Indenture.

     “Foreign Subsidiary” means any Restricted Subsidiary that is not organized under the laws of the United States of America or any state thereof or the District of Columbia and any Subsidiary of such Restricted Subsidiary.

     “GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time, including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession. All ratios and computations based on GAAP contained in this Indenture will be computed in conformity with GAAP, except that in the event the Company is acquired in a transaction in which purchase accounting is applied to the Company’s financial statements, the effects of the application of purchase accounting in such instance shall be disregarded in the calculation of such ratios and other computations.

     “Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:

(1)	to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or
(2)	entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term “Guarantee”

15

will not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

     “Guarantor Pari Passu Indebtedness” means Indebtedness of a Subsidiary Guarantor that ranks equally in right of payment to its Subsidiary Guarantee.

     “Guarantor Subordinated Obligation” means, with respect to a Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that is expressly subordinated in right of payment to the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee, including the Guarantees of the Private Placement Notes, pursuant to a written agreement, without giving effect to collateral arrangements.

     “Hedging Obligations” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodity Agreement.

     “Holder” means a Person in whose name a Security is registered on the Registrar’s books.

     “IAI” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

     “Incur” means issue, create, assume, Guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) will be deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary; and the terms “Incurred” and “Incurrence” have meanings correlative to the foregoing.

     “Indebtedness” means, with respect to any Person on any date of determination (without duplication):

(1)	the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money;
(2)	the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
(3)	the principal component of all obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments (including reimbursement obligations with respect thereto except to the extent such reimbursement obligation relates to a trade payable or similar obligation to a trade creditor in each case incurred in the ordinary course of business);
(4)	the principal component of all obligations of such Person to pay the deferred and unpaid purchase price of property (except trade payables), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto;

16

(5)	Capitalized Lease Obligations and all Attributable Indebtedness of such Person;
(6)	the principal component or liquidation preference of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock of the Company or a Restricted Subsidiary or Preferred Stock of a Subsidiary that is not a Subsidiary Guarantor (but excluding, in each case, any accrued dividends);
(7)	the principal component of all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of such Indebtedness will be the lesser of (a) the fair market value of such asset at such date of determination and (b) the amount of such Indebtedness of such other Persons;
(8)	the principal component of Indebtedness of other Persons to the extent Guaranteed by such Person;
(9)	to the extent not otherwise included in this definition, net obligations of such Person under Hedging Obligations (the amount of any such obligations to be equal at any time to the termination value of such agreement or arrangement giving rise to such obligation that would be payable by such Person at such time); and
(10)	to the extent not otherwise included in this definition, the principal amount of any Indebtedness outstanding in connection with a securitization transaction is the amount of obligations outstanding under the legal documents entered into as part of such securitization that would be characterized as principal on any date of determination if such securitization transaction were structured as a secured lending transaction.

     The amount of Indebtedness of any Person at any date will be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date; provided that contingent obligations arising in the ordinary course of business and not with respect of borrowed money shall be deemed not to constitute Indebtedness.

     Notwithstanding the foregoing, money borrowed and set aside at the time of the Incurrence of any Indebtedness in order to pre-fund the payment of interest on such Indebtedness shall not be deemed to be “Indebtedness” provided that such money is held to secure the payment of such interest.

     In addition, “Indebtedness” of any Person shall include Indebtedness described in the preceding paragraph that would not appear as a liability on the balance sheet of such Person if:

(1) such Indebtedness is the obligation of a partnership or joint venture that is not a Restricted Subsidiary (a “Joint Venture”);

17

(2)	such Person or a Restricted Subsidiary of such Person is a general partner of the Joint Venture (a “General Partner”); and
(3)	there is recourse, by contract or operation of law, with respect to the payment of such Indebtedness to property or assets of such Person or a Restricted Subsidiary of such Person; and then such Indebtedness shall be included in an amount not to exceed:

(a)	the lesser of (i) the net assets of the General Partner and (ii) the amount of such obligations to the extent that there is recourse, by contract or operation of law, to the property or assets of such Person or a Restricted Subsidiary of such Person; or
(b)	if less than the amount determined pursuant to clause (a) immediately above, the actual amount of such Indebtedness that is recourse to such Person or a Restricted Subsidiary of such Person, if the Indebtedness is evidenced by a writing and is for a determinable amount.

     “Indenture” means this Indenture as amended or supplemented from time to time.

     “Independent Financial Advisor” means an accounting, appraisal or investment banking firm or consultant to Persons engaged in a Permitted Business of nationally recognized standing that is, in the good faith judgment of the Company, qualified to perform the task for which it has been engaged.

     “Initial Purchasers” means, together, J.P. Morgan Securities Inc., Bear, Stearns & Co. Inc. and BNY Capital Markets, Inc.

     “Initial Securities” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

     “Intercreditor Agreement” means the Intercreditor Agreement, dated as of the date hereof, by and among J.P. Morgan Chase Bank, N.A., in its capacity as administrative agent under the Senior Secured Credit Agreement, the holders of any Pari Passu Secured Indebtedness from time to time (or any agent or representative on their behalf), the Trustee, the holders of the Private Placement Notes, the Collateral Agent, and the Company and the Note Guarantors.

     “Interest Rate Agreement” means with respect to any Person any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement as to which such Person is party or a beneficiary.

     “Investment” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of any direct or indirect advance, loan (other than advances or extensions of credit to customers in the ordinary course of business) or other extensions of credit (including by way of Guarantee or similar arrangement, but excluding any debt or extension of credit represented by a bank deposit other than a time deposit) or capital

18

contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by, such Person and all other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided that none of the following will be deemed to be an Investment:

(1)	Hedging Obligations entered into in the ordinary course of business and in compliance with this Indenture;
(2)	endorsements of negotiable instruments and documents in the ordinary course of business; and
(3)	an acquisition of assets, Capital Stock or other securities by the Company or a Subsidiary for consideration to the extent such consideration consists of Common Stock of the Company or the Parent.

     For purposes of Section 3.3,

(1)	“Investment” will include the portion (proportionate to the Company’s equity interest in a Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the fair market value of the net assets of such Restricted Subsidiary at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company will be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (a) the Company’s “Investment” in such Subsidiary at the time of such redesignation less (b) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets (as conclusively determined by the Board of Directors of the Company in good faith) of such Subsidiary at the time that such Subsidiary is so re-designated a Restricted Subsidiary;
(2)	any property transferred to or from an Unrestricted Subsidiary will be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Board of Directors of the Company; and
(3)	if the Company or any Restricted Subsidiary sells or otherwise disposes of any Voting Stock of any Restricted Subsidiary such that, after giving effect to any such sale or disposition, such entity is no longer a Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value (as conclusively determined by the Board of Directors of the Company in good faith) of the Capital Stock of such Subsidiary not sold or disposed of.

     “Issue Date” means June 16, 2006.

     “Joint Venture” means any Person, other than an individual or a Subsidiary of the Company, (i) in which the Company or a Restricted Subsidiary holds or acquires a security

19

interest (whether by way of Capital Stock or otherwise) and (ii) which is engaged in a Related Business.

     “Legal Holiday” has the meaning ascribed to it under Section 12.8.

     “Lien” means, with respect to any asset, any mortgage, pledge, security interest, encumbrance, lien or charge of any kind in respect of such asset (including any conditional sale or other title retention agreement or lease in the nature thereof).

     “Mortgages” means the mortgages, deeds of trust, deeds to secure Indebtedness or other similar documents securing Liens on the Premises, as well as the other Collateral secured by and described in the mortgages, deeds of trust, deeds to secure Indebtedness or other similar documents.

     “Net Available Cash” from an Asset Disposition means cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and net proceeds from the sale or other disposition of any securities received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring person of Indebtedness or other obligations relating to the properties or assets that are the subject of such Asset Disposition or received in any other non-cash form) therefrom, in each case net of:

(1)	all legal, accounting, investment banking, title and recording tax expenses, commissions and other fees and expenses Incurred, and all Federal, state, provincial, foreign and local taxes required to be paid or accrued as a liability under GAAP (after taking into account any available tax credits or deductions and any tax sharing agreements), as a consequence of such Asset Disposition;
(2)	all payments made on any Indebtedness that is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon or any other security agreement of any kind with respect to such assets, or that must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law be repaid out of the proceeds from such Asset Disposition;
(3)	all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition; and
(4)	the deduction of appropriate amounts to be provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed of in such Asset Disposition and retained by the Company or any Restricted Subsidiary after such Asset Disposition.

     “Net Cash Proceeds,” with respect to any issuance or sale of Capital Stock, means the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, listing fees, discounts or commissions and brokerage, consultant and other fees and charges actually Incurred in connection with such issuance or sale and net of taxes paid or payable as a result of such issuance or sale (after taking into account any available tax credit or deductions and any tax sharing arrangements); provided that the cash proceeds of an

20

Equity Offering by Parent shall not be deemed Net Cash Proceeds, except to the extent such cash proceeds are contributed to the Company.

     “Non-Guarantor Restricted Subsidiary” means any Restricted Subsidiary that is not a Subsidiary Guarantor.

     “Non-Recourse Debt” means Indebtedness of a Person:

(1)	as to which neither the Company nor any Restricted Subsidiary (a) provides any Guarantee or credit support of any kind (including any undertaking, guarantee, indemnity, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable (as a guarantor or otherwise);
(2)	no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of the Company or any Restricted Subsidiary to declare a default under such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its Stated Maturity; and
(3)	the explicit terms of which provide there is no recourse against any of the assets of the Company or its Restricted Subsidiaries, except that Standard Securitization Undertakings shall not be considered recourse.

     “Non-U.S. Person” means a Person who is not a U.S. Person (as defined in Regulation S).

     “Note Guarantee” means, individually, any Guarantee of payment of the Securities and Exchange Securities issued in a registered Exchange Offer pursuant to the Registration Rights Agreement by a Note Guarantor pursuant to the terms of this Indenture and any supplemental indenture thereto, and, collectively, all such Note Guarantees. Each such Note Guarantee will be in the form prescribed by this Indenture.

     “Note Guarantor” has the meaning ascribed to it in the introductory paragraph of this Indenture.

     “Offering Memorandum” means the Offering Memorandum dated as of June 9, 2006 relating to the offering of the Securities.

     “Officer” means the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer or the Secretary of the Company or, if the Company is a partnership or a limited liability company that has no such officers, a person duly authorized under applicable law by the general partner, managers, members or a similar body to act on behalf of the Company. Officer of any Note Guarantor has a correlative meaning.

     “Officers’ Certificate” means a certificate signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company.

21

     “Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company, a Guarantor or the Trustee.

     “Parent” means Libbey Inc., a Delaware corporation.

     “Parent Common Stock” means the common stock, par value $ .01 per share of the Parent.

     “Pari Passu Indebtedness” means Indebtedness that ranks equally in right of payment to the Securities (without giving effect to collateral arrangements). Indebtedness in respect of the Private Placement Notes shall not be considered Pari Passu Indebtedness.

     “Pari Passu Secured Indebtedness” means any Indebtedness of the Company or any Note Guarantor that ranks pari passu in right of payment with the Securities or the relevant Note Guarantee and is secured by a Lien on the Collateral that has the same priority as the Lien securing the Securities and that is designated in writing as such by the Company to the Trustee and the holders of which enter into an appropriate agency agreement with the Collateral Agent. Indebtedness in respect of the Private Placement Notes shall not be considered Pari Passu Secured Indebtedness.

     “Permitted Asset Swap” means any transfer of property or assets by the Company or any of its Restricted Subsidiaries in which at least 90% of the consideration received by the transferor consists of properties or assets (other than cash and Investments) that will be used in a Related Business; provided that the aggregate fair market value of the property or assets being transferred by the Company or such Restricted Subsidiary is not greater than the aggregate fair market value of the property or assets received by the Company or such Restricted Subsidiary in such exchange (provided, however, that in the event such aggregate fair market value of the property or assets being transferred or received by the Company is (x) less than $20.0 million, such determination shall be made in good faith by the Board of Directors of the Company and (y) greater than or equal to $20.0 million, such determination shall be made by an Independent Financial Advisor). Neither the Company nor any of its Restricted Subsidiaries may effect a Permitted Asset Swap during the PIK Period.

     “Permitted Investment” means an Investment by the Company or any Restricted Subsidiary in:

(1)	a Restricted Subsidiary or a Person that will, upon the making of such Investment, become a Restricted Subsidiary; provided, however, that the primary business of such Restricted Subsidiary (other than a Receivables Entity) is a Related Business;
(2)	another Person if as a result of such Investment such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Company or a Restricted Subsidiary (other than a Receivables Entity); provided, however, that such Person’s primary business is a Related Business;
(3)	cash and Cash Equivalents;

22

(4)	receivables owing to the Company or any Restricted Subsidiary created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;
(5)	payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;
(6)	loans or advances to employees of the Company and its Restricted Subsidiaries, (i) the proceeds of which are used to purchase Capital Stock of the Company or the Parent, or (ii) made in the ordinary course of business consistent with past practices of the Company or such Restricted Subsidiary in an aggregate amount at any one time outstanding not to exceed $3.5 million (loans or advances that are forgiven shall continue to be deemed outstanding);
(7)	Capital Stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of judgments or pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of a debtor;
(8)	Investments made as a result of the receipt of non-cash consideration from an Asset Disposition that was made pursuant to and in compliance with Section 3.5;
(9)	Investments in existence on the Issue Date and any modification, replacement, renewal, or extension thereof; provided, however, that the amount of such Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue Date or (y) as otherwise permitted under this Indenture;
(10)	Currency Agreements, Interest Rate Agreements, Commodity Agreements and related Hedging Obligations, which transactions or obligations are Incurred in compliance with Section 3.2;
(11)	following the expiration of the PIK Period, Investments by the Company or any of its Restricted Subsidiaries, together with all other Investments pursuant to this clause (11), in an aggregate amount at the time of such Investment not to exceed the greater of (a) $7.5 million or (b) 1% of Total Assets outstanding at any one time (with the fair market value of such Investment being measured at the time made and without giving effect to subsequent changes in value);
(12)	Guarantees issued in accordance with Section 3.2;
(13)	Investments by the Company or a Restricted Subsidiary in a Receivables Entity or any Investment by a Receivables Entity in any other Person, in each case, in connection with a Receivables securitization transaction, provided, however, that any Investment in any such Person is in the form of a purchase money note, or

23

any equity interest or interests in Receivables and related assets generated by the Company or a Restricted Subsidiary and transferred to any Person in connection with a Receivables securitization transaction or any such Person owning such Receivables;

(14)	Investments consisting of licensing of intellectual property pursuant to joint marketing arrangements with other Persons;
(15)	Investments of a Restricted Subsidiary of the Company acquired after the Issue Date or of an entity merged into or consolidated with the Company or a Restricted Subsidiary of the Company in a transaction that is not prohibited by Section 4.1 after the Issue Date, to the extent that such Investments were not made in contemplation of such acquisition, merger, or consolidation and were in existence on the date of such acquisition, merger, or consolidation; and
(16)	following the expiration of the PIK Period, Investments in Joint Ventures of the Company or any of its Restricted Subsidiaries not to exceed $15.0 million at any time outstanding (with the fair market value of such Investment being measured at the time made and without giving effect to subsequent changes in value).

     “Permitted Liens” means, with respect to any Person:

(1)	Liens securing Indebtedness and other obligations under the Senior Secured Credit Agreement and related Hedging Obligations and related banking services or cash management obligations and Liens on assets of Restricted Subsidiaries securing Guarantees of Indebtedness and other obligations of the Company and/or Libbey Europe B.V. under the Senior Secured Credit Agreement permitted to be Incurred under this Indenture, provided that any such Liens of the Company or the Note Guarantors secure the Securities and the Note Guarantees on at least a second-priority basis;
(2)	pledges or deposits by such Person under workers’ compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import or customs duties or for the payment of rent, in each case Incurred in the ordinary course of business;
(3)	Liens imposed by law, including carriers’, warehousemen’s, mechanics’, materialmen’s and repairmen’s Liens, Incurred in the ordinary course of business;
(4)	Liens for taxes, assessments or other governmental charges not yet subject to penalties for non-payment or that are being contested in good faith by appropriate proceedings provided appropriate reserves required pursuant to GAAP have been made in respect thereof;

24

(5)	Liens in favor of issuers of surety or performance bonds or letters of credit or bankers’ acceptances issued pursuant to the request of and for the account of such Person in the ordinary course of its business;
(6)	survey exceptions encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building codes or other restrictions (including, without limitation, minor defects or irregularities in title and similar encumbrances) as to the use of real properties or liens incidental to the conduct of the business of such Person or to the ownership of its properties that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person provided that the Person complies with the applicable provisions of the Collateral Documents relating to such Liens;
(7)	Liens securing Hedging Obligations so long as the related Indebtedness is, and is permitted to be under this Indenture, secured by a Lien on the same property securing such Hedging Obligation;
(8)	leases, licenses, subleases and sublicenses of assets (including, without limitation, real property and intellectual property rights) that do not materially interfere with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries;
(9)	judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;
(10)	Liens for the purpose of securing the payment of all or a part of the purchase price of, or Capitalized Lease Obligations, purchase money obligations or other payments Incurred to finance the acquisition, lease, improvement or construction of, assets or property acquired or constructed in the ordinary course of business provided that:

(a)	the Incurrence of the aggregate principal amount of Indebtedness secured by such Liens is otherwise permitted to be Incurred under this Indenture and does not exceed the cost of the assets or property so acquired or constructed; and
(b)	such Liens are created within 180 days of construction or acquisition of such assets or property and do not encumber any other assets or property of the Company or any Restricted Subsidiary other than such assets or property and assets affixed or appurtenant thereto;

(11) Liens arising solely by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depositary institution;

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(12)	Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Company and its Restricted Subsidiaries in the ordinary course of business;
(13)	Liens existing on the Issue Date (other than Liens permitted under clause (1));
(14)	Liens on property or shares of stock of a Person at the time such Person becomes a Restricted Subsidiary; provided, however, that such Liens are not created, Incurred or assumed in connection with, or in contemplation of, such other Person becoming a Restricted Subsidiary; provided further, however, that any such Lien may not extend to any other property owned by the Company or any Restricted Subsidiary;
(15)	Liens on property at the time the Company or a Restricted Subsidiary acquired the property, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary; provided, however, that such Liens are not created, Incurred or assumed in connection with, or in contemplation of, such acquisition; provided further, however, that such Liens may not extend to any other property owned by the Company or any Restricted Subsidiary;
(16)	Liens in favor of the Company or any Restricted Subsidiary;
(17)	Liens securing the Securities and Subsidiary Guarantees;
(18)	Liens securing Refinancing Indebtedness Incurred to refinance, refund, replace, amend, extend or modify, as a whole or in part, Indebtedness that was previously so secured pursuant to clauses (10), (13), (14), (15), (17) and (18), provided that any such Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the Indebtedness being refinanced or is in respect of property that is the security for a Permitted Lien hereunder; provided further that Liens securing Refinancing Indebtedness in respect of the Private Placement Notes shall have the same priority and ranking in relation to the Securities and Note Guarantees as the Private Placement Notes and related Guarantees;
(19)	any interest or title of a lessor under any Capitalized Lease Obligation or operating lease;
(20)	Liens under industrial revenue, municipal or similar bonds;
(21)	following the expiration of the PIK Period, Liens securing Indebtedness (other than Subordinated Obligations and Guarantor Subordinated Obligations) in an aggregate principal amount outstanding at any one time not to exceed $20.0 million; and

26

(22) Liens securing Indebtedness and other obligations of Foreign Subsidiaries that are Incurred in accordance with Section 3.2.

     “Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company, government or any agency or political subdivision hereof or any other entity.

     “PIK Period” means the period of time from the issuance of the Private Placement Notes until the earlier of (x) the date on which the Company shall pay interest on the Private Placement Notes in cash and (y) the date on which the Private Placement Notes are redeemed.

     “Preferred Stock,” as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) that is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.

     “Private Placement Notes” means $102.0 million of senior subordinated secured pay-in-kind notes due 2011 issued by the Company in a private placement.

     “QIB” means any “qualified institutional buyer” as such term is defined in Rule 144A.

     “Rating Agencies” means Standard & Poor’s Ratings Group, Inc. and Moody’s Investors Service, Inc. or if Standard & Poor’s Ratings Group, Inc. or Moody’s Investors Service, Inc. or both shall not make a rating on the Securities publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Company (as certified by a resolution of the Board of Directors) which shall be substituted for Standard & Poor’s Ratings Group, Inc. or Moody’s Investors Service, Inc. or both, as the case may be.

     “Receivable” means a right to receive payment arising from a sale or lease of goods or the performance of services by a Person pursuant to an arrangement with another Person pursuant to which such other Person is obligated to pay for goods or services under terms that permit the purchase of such goods and services on credit and shall include, in any event, any items of property that would be classified as an “account,” “chattel paper,” “payment intangible” or “instrument” under the Uniform Commercial Code as in effect in the State of New York and any “supporting obligations” as so defined.

     “Receivables Entity” means a Wholly-Owned Subsidiary (or another Person in which the Company or any Restricted Subsidiary makes an Investment and to which the Company or any Restricted Subsidiary transfers Receivables and related assets) which engages in no activities other than in connection with the financing of Receivables and which is designated by the Board of Directors of the Company (as provided below) as a Receivables Entity:

(1) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which:

(a) is guaranteed by the Company or any Restricted Subsidiary (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings);

27

(b)	is recourse to or obligates the Company or any Restricted Subsidiary in any way other than pursuant to Standard Securitization Undertakings; or
(c)	subjects any property or asset of the Company or any Restricted Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;

(2)

with which neither the Company nor any Restricted Subsidiary has any material contract, agreement, arrangement or understanding other than on terms no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Company, other than fees payable in the ordinary course of business in connection with servicing Receivables; and

(3)

to which neither the Company nor any Restricted Subsidiary has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.

     Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of the Company giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing conditions.

     “Receivables Fees” means any fees or interest paid to purchasers or lenders providing the financing in connection with a securitization transaction, factoring agreement or other similar agreement, including any such amounts paid by discounting the face amount of Receivables or participations therein transferred in connection with a securitization transaction, factoring agreement or other similar arrangement, regardless of whether any such transaction is structured as on-balance sheet or off- balance sheet or through a Restricted Subsidiary or an Unrestricted Subsidiary.

     “Redemption Date” means, with respect to any redemption of Securities, the date of redemption with respect thereto.

     “Refinancing Indebtedness” means Indebtedness that is Incurred to refund, refinance, replace, exchange, renew, repay or extend (including pursuant to any defeasance or discharge mechanism) (collectively, “refinance,” “refinances,” and “refinanced” shall have a correlative meaning) any Indebtedness existing on the Issue Date or Incurred in compliance with this Indenture (including Indebtedness of the Company that refinances Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that refinances Indebtedness of another Restricted Subsidiary) including Indebtedness that refinances Refinancing Indebtedness, provided, however, that:

(1) (a) if the Stated Maturity of the Indebtedness being refinanced is earlier than the Stated Maturity of the Securities, the Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being refinanced or (b) if the Stated Maturity of the Indebtedness being refinanced is later than the

28

Stated Maturity of the Securities, the Refinancing Indebtedness has a Stated Maturity at least 91 days later than the Stated Maturity of the Securities;

(2)	the Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being refinanced;
(3)	such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced (plus, without duplication, any additional Indebtedness Incurred to pay interest or premiums required by the instruments governing such existing Indebtedness and fees Incurred in connection therewith); and
(4)	if the Indebtedness being refinanced is subordinated in right of payment to the Securities or the Subsidiary Guarantee, such Refinancing Indebtedness is subordinated in right of payment to the Securities or the Subsidiary Guarantee on terms at least as favorable to the Holders as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

     “Registration Rights Agreement” means that certain registration rights agreement dated as of the Issue Date by and among the Company, the Note Guarantors and the Initial Purchasers set forth therein and, with respect to any Additional Securities, one or more substantially similar registration rights agreements among the Company and the other parties thereto, as such agreements may be amended from time to time.

     “Regulation S” means Regulation S under the Securities Act.

     “Related Business” means any business that is the same as or related, ancillary or complementary to any of the businesses of the Company and its Restricted Subsidiaries, on the Issue Date.

     “Restricted Investment” means any Investment other than a Permitted Investment.

     “Restricted Period”, with respect to any Securities, means the period of 40 consecutive days beginning on and including the later of (A) the day on which the Securities are first offered to Persons other than distributors (as defined in Regulation S), notice of which day shall be promptly given by the Company to the Trustee, and (B) the issue date with respect to such Securities.

     “Restricted Securities Legend” means the Private Placement Legend set forth in Section 2.1(d)(A) or the Regulation S Legend set forth in Section 2.1(d)(B), as applicable.

     “Restricted Subsidiary” means any Subsidiary of the Company other than an Unrestricted Subsidiary.

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     “Rule 144A” means Rule 144A under the Securities Act.

     “Sale/Leaseback Transaction” means an arrangement relating to property now owned or hereafter acquired whereby the Company or a Restricted Subsidiary transfers such property to a Person (other than the Company or any of its Subsidiaries) and the Company or a Restricted Subsidiary leases it from such Person.

     “SEC” means the United States Securities and Exchange Commission.

     “Securities” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

     “Securities Custodian” means the custodian with respect to the Global Securities (as appointed by DTC), or any successor Person thereto and shall initially be the Trustee.

     “Securities Documents” means this Indenture, the Securities, the Note Guarantees, the Collateral Documents and the Intercreditor Agreement.

     “Securities Register” means the register of Securities, maintained by the Registrar, pursuant to Section 2.3.

     “Senior Secured Credit Agreement” means the Credit Agreement to be entered into among the Company, Libbey Europe B.V., a Netherlands corporation, J.P. Morgan Securities Inc. as sole lead arranger and bookrunner, JPMorgan Chase Bank N.A., as Administrative Agent, and the lenders parties thereto from time to time, as the same may be amended, restated, modified, renewed, refunded, replaced (whether upon termination or otherwise) or refinanced in whole or in part from time to time (including increasing the amount loaned thereunder provided that such additional Indebtedness is Incurred in accordance with Section 3.2; provided that a Senior Secured Credit Agreement shall not (x) include Indebtedness issued, created or Incurred pursuant to a registered offering of securities under the Securities Act or a private placement of securities (including under Rule 144A or Regulation S) pursuant to an exemption from the registration requirements of the Securities Act or (y) relate to Indebtedness that does not consist exclusively of Pari Passu Indebtedness or Guarantor Pari Passu Indebtedness or Indebtedness of a Foreign Subsidiary.

     “Shelf Registration Statement” shall have the meaning set forth in the Registration Rights Agreement.

     “Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

     “Standard Securitization Undertakings” means representations, warranties, covenants and indemnities entered into by the Company or any Restricted Subsidiary that are reasonably customary in securitization of Receivables transactions.

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     “Stated Maturity” means, with respect to any Indebtedness, the date specified in the agreement governing or certificate relating to such Indebtedness as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision, but shall not include any contingent obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof.

     “Subordinated Obligation” means any Indebtedness of the Company (whether outstanding on the Issue Date or thereafter Incurred) that is subordinated or junior in right of payment to the Securities, including the Private Placement Notes, pursuant to a written agreement, without giving effect to collateral arrangements.

     “Subsidiary” of any Person means (a) any corporation, association or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total ordinary voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof (or persons performing similar functions) or (b) any partnership, joint venture limited liability company or similar entity of which more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, is, in the case of clauses (a) and (b), at the time owned or controlled, directly or indirectly, by (1) such Person, (2) such Person and one or more Subsidiaries of such Person or (3) one or more Subsidiaries of such Person. Unless otherwise specified herein, each reference to a Subsidiary will refer to a Subsidiary of the Company.

     “Subsidiary Guarantee” means, individually, any Guarantee of payment of the Securities and Exchange Securities issued in an Exchange Offer by a Subsidiary Guarantor pursuant to the terms of this Indenture and any supplemental indenture hereto (which shall be substantially in the form of Exhibit C), and, collectively, all such Guarantees. Each such Subsidiary Guarantee will be in the form prescribed by this Indenture.

     “Subsidiary Guarantor” means each Restricted Subsidiary in existence on the Issue Date that provides a Subsidiary Guarantee on the Issue Date (and any other Restricted Subsidiary that provides a Subsidiary Guarantee in accordance with this Indenture); provided that upon release or discharge of such Restricted Subsidiary from its Subsidiary Guarantee in accordance with this Indenture, such Restricted Subsidiary ceases to be a Subsidiary Guarantor.

     “TIA” or “Trust Indenture Act” means the Trust Indenture Act of 1939, as in effect on the date of this Indenture.

     “Total Assets” means, with respect to any Person, the total assets of such Person and its Restricted Subsidiaries determined in accordance with GAAP, as shown on its most recent balance sheet.

     “Trust Officer” shall mean, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers or to

31

whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

     “Trustee” means the party named as such in this Indenture until a successor replaces it and, thereafter, means, the successor.

     “Uniform Commercial Code” means the New York Uniform Commercial Code as in effect from time to time.

     “Unrestricted Subsidiary” means:

(1)	any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Company in the manner provided below; and
(2)	any Subsidiary of an Unrestricted Subsidiary.

     The Board of Directors of the Company may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary or a Person becoming a Subsidiary through merger or consolidation or Investment therein) to be an Unrestricted Subsidiary only if:

(1)	such Subsidiary or any of its Subsidiaries does not own any Capital Stock or Indebtedness of or have any Investment in, or own or hold any Lien on any property of, any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary;
(2)	all the Indebtedness of such Subsidiary and its Subsidiaries shall, at the date of designation, and will at all times thereafter, consist of Non-Recourse Debt;
(3)	such designation and the Investment of the Company in such Subsidiary complies with Section 3.3;
(4)	such Subsidiary, either alone or in the aggregate with all other Unrestricted Subsidiaries, does not operate, directly or indirectly, all or substantially all of the business of the Company and its Subsidiaries;
(5)	such Subsidiary is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation:

(a)	to subscribe for additional Capital Stock of such Person; or
(b)	to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and

(6) on the date such Subsidiary is designated an Unrestricted Subsidiary, such Subsidiary is not a party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary with terms

32

substantially less favorable to the Company than those that might have been obtained from Persons who are not Affiliates of the Company.

     Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a resolution of the Board of Directors of the Company giving effect to such designation and an Officers’ Certificate certifying that such designation complies with the foregoing conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary shall be deemed to be Incurred as of such date.

     The Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately after giving effect to such designation, no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof and the Company could Incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of Section 3.2 on a pro forma basis taking into account such designation.

     “U.S. Government Obligations” means securities that are (a) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depositary receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depositary receipt.

     “Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled to vote in the election of directors, managers or trustees, as applicable, of such Person.

     “Wholly-Owned Subsidiary” means a Restricted Subsidiary, all of the Capital Stock of which (other than directors’ qualifying shares) is owned by the Company or another Wholly-Owned Subsidiary.

          SECTION 1.2. Other Definitions.

Term	Defined in Section
“Additional Restricted Securities”		2.1(b)
“Affiliate Transaction”		3.8

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Term	Defined in Section
“Agent”		3.14
“Agent Members”		2.1(e)
“Asset Disposition Offer”		3.5
“Asset Disposition Offer Amount”		3.5
“Asset Disposition Offer Period”		3.5
“Asset Disposition Purchase Date”		3.5
“Authenticating Agent”		2.2
“Calculation Agent”		2.3
“Change of Control Offer”		3.11
“Change of Control Payment”		3.11
“Change of Control Payment Date”		3.11
“Company Order”		2.2
“covenant defeasance option”		8.1(b)
“cross acceleration provision”		6.1(6)(b)
“Defaulted Interest”		2.13
“Event of Default”		6.1
“Excess Proceeds”		3.5
“Exchange Global Note”		2.1(b)
“Global Securities”		2.1(b)
“Guarantor Obligations”		10.1
“Institutional Accredited Investor Global Note”		2.1(b)
“Institutional Accredited Investor Notes”		2.1(b)
“legal defeasance option”		8.1(b)
“Pari Passu Notes”		3.5
“payment default”		6.1(6)(a)
“Paying Agent”		2.3
“Private Placement Legend”		2.1(d)
“protected purchaser”		2.9
“Registrar”		2.3
“Regulation S Global Note”		2.1(b)
“Regulation S Legend”		2.1(d)
“Regulation S Notes”		2.1(b)
“Resale Restriction Termination Date”		2.6(a)
“Restricted Payment”		3.3
“Restricted Securities”		2.1(a)
“Rule 144A Global Note”		2.1(b)
“Rule 144A Notes”		2.1(b)
“Special Interest Payment Date”		2.13(a)
“Special Record Date”		2.13(a)
“Successor Company”		4.1

          SECTION 1.3. Incorporation by Reference of Trust Indenture Act. This Indenture is subject to the mandatory provisions of the TIA, which are incorporated by reference in and made a part of this Indenture. The following TIA terms have the following meanings:

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          “Commission” means the SEC.

          “indenture securities” means the Securities.

          “indenture security holder” means a Holder.

          “indenture to be qualified” means this Indenture.

          “indenture trustee” or “institutional trustee” means the Trustee.

          “obligor” on the indenture securities means the Company, any Subsidiary Guarantors and any other obligor on the indenture securities.

          All other TIA terms used in this Indenture that are defined by the TIA, defined in the TIA by reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions.

          SECTION 1.4. Rules of Construction. Unless the context otherwise requires:

(1)	a term has the meaning assigned to it;
(2)	an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(3)	“including” means including without limitation;
(4)	words in the singular include the plural and words in the plural include the singular;
(5)	the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP;
(6)	the principal amount of any Preferred Stock shall be (i) the maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater;
(7)	all amounts expressed in this Indenture or in any of the Securities in terms of money refer to the lawful currency of the United States of America; and
(8)	the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

ARTICLE II
THE SECURITIES

          SECTION 2.1. Form, Dating and Terms. (a) The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The

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Initial Securities issued on the date hereof will be in an aggregate principal amount of $306,000,000. In addition, the Company may issue, from time to time in accordance with the provisions of this Indenture, Additional Securities and Exchange Securities. Furthermore, Securities may be authenticated and delivered upon registration or transfer, or in lieu of, other Securities pursuant to Section 2.6, 2.9, 2.11, 5.8 or 9.5 or in connection with a Change of Control Offer pursuant to Section 3.11 or an Asset Disposition Offer under Section 3.5.

          The Initial Securities shall be known and designated as “Floating Rate Senior Secured Notes, Series A, due 2011” of the Company. Additional Securities issued as securities bearing one of the restrictive legends described under Section 2.1(d) (“Restricted Securities”) shall be known and designated as “Floating Rate Senior Secured Notes, Series A, due 2011” of the Company. Additional Securities issued other than as Restricted Securities shall be known and designated as “Floating Rate Senior Secured Notes, Series B, due 2011” of the Company, and Exchange Securities shall be known and designated as “Floating Rate Senior Secured Notes, Series B, due 2011” of the Company.

          With respect to any Additional Securities, the Company shall set forth in (a) a Board Resolution of the Company and (b) (i) an Officers’ Certificate or (ii) one or more indentures supplemental hereto, the following information:

     (1) the aggregate principal amount of such Additional Securities to be authenticated and delivered pursuant to this Indenture which may be in an unlimited aggregate principal amount;

     (2) the issue price and the issue date of such Additional Securities, including the date from which interest shall accrue; and

     (3) whether such Additional Securities shall be Restricted Securities issued in the form of Exhibit A hereto and/or shall be issued in the form of Exhibit B hereto.

          The Initial Securities, the Additional Securities and the Exchange Securities shall be considered collectively as a single class for all purposes of this Indenture. Holders of the Initial Securities, the Additional Securities and the Exchange Securities will vote and consent together on all matters to which such Holders are entitled to vote or consent as one class, and none of the Holders of the Initial Securities, the Additional Securities or the Exchange Securities shall have the right to vote or consent as a separate class on any matter to which such Holders are entitled to vote or consent.

          If any of the terms of any Additional Securities are established by action taken pursuant to a Board Resolution of the Company, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of the Company and delivered to the Trustee upon request by the Trustee at or prior to the delivery of the Officers’ Certificate or the indenture supplemental hereto setting forth the terms of the Additional Securities.

          (b) The Initial Securities are being offered and sold by the Company pursuant to a Purchase Agreement, dated June 9, 2006, among the Company and the Initial Purchasers. The Initial Securities and any Additional Securities (if issued as Restricted Securities) (the “Additional Restricted Securities”) will be resold initially only to (A) QIBs in reliance on

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Rule 144A and (B) Non-U.S. Persons in reliance on Regulation S. Such Initial Securities and Additional Restricted Securities may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and IAIs in accordance with Rule 501 of the Securities Act, in each case, in accordance with the procedures described herein. Additional Securities offered after the date hereof may be offered and sold by the Company from time to time pursuant to one or more purchase agreements in accordance with applicable law.

          Initial Securities and Additional Restricted Securities offered and sold to QIBs in the United States of America in reliance on Rule 144A (the “Rule 144A Notes”) shall be issued in the form of a permanent global Security, without interest coupons, substantially in the form of Exhibit A, which is hereby incorporated by reference and made a part of this Indenture, including appropriate legends as set forth under Section 2.1(d) (the “Rule 144A Global Note”), deposited with the Trustee, as custodian for DTC, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The Rule 144A Global Note may be represented by more than one certificate, if so required by DTC’s rules regarding the maximum principal amount to be represented by a single certificate. The aggregate principal amount of the Rule 144A Global Note may from time to time be increased or decreased by adjustments made on the Rule 144A Global Note and on the records of the Trustee, as custodian for DTC or its nominee, as hereinafter provided.

          Initial Securities and Additional Securities offered and sold outside the United States of America (the “Regulation S Notes”) in reliance on Regulation S shall be issued in the form of a permanent global Security, without interest coupons, substantially in the form of Exhibit A including appropriate legends as set forth under Section 2.1(d) (the “Regulation S Global Note”). The Regulation S Global Note will be deposited upon issuance with the Trustee, as custodian for DTC, duly executed by the Company and authenticated by the Trustee as hereinafter provided. During the Restricted Period, interests in the Regulation S Global Note may be transferred to Non-U.S. Persons pursuant to Regulation S or to QIBs and IAIs in accordance with this Indenture. The Regulation S Global Note may be represented by more than one certificate, if so required by DTC’s rules regarding the maximum principal amount to be represented by a single certificate. The aggregate principal amount of the Regulation S Global Note may from time to time be increased or decreased by adjustments made on the Regulation S Global Note and on the records of the Trustee, as custodian for DTC or its nominee, as hereinafter provided.

          Initial Securities and Additional Securities resold to IAIs (the “Institutional Accredited Investor Notes”) in the United States of America shall be issued in the form of a permanent global Security, without interest coupons, substantially in the form of Exhibit A including appropriate legends as set forth under Section 2.1(d) (the “Institutional Accredited Investor Global Note”) deposited with the Trustee, as custodian for DTC, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The Institutional Accredited Investor Global Note may be represented by more than one certificate, if so required by DTC’s rules regarding the maximum principal amount to be represented by a single certificate. The aggregate principal amount of the Institutional Accredited Investor Global Note may from time to time be increased or decreased by adjustments made on the Institutional Accredited Investor Note and on the records of the Trustee, as custodian for DTC or its nominee, as hereinafter provided.

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          Exchange Securities exchanged for interests in the Rule 144A Notes, the Regulation S Notes and the Institutional Accredited Investor Notes will be issued in the form of a permanent global Security, without interest coupons, substantially in the form of Exhibit B, which is hereby incorporated by reference and made a part of this Indenture, deposited with the Trustee as hereinafter provided, including the appropriate legend set forth under Section 2.1(d) (the “Exchange Global Note”). The Exchange Global Note will be deposited upon issuance with, or on behalf of, the Trustee as custodian for DTC, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The Exchange Global Note may be represented by more than one certificate, if so required by DTC’s rules regarding the maximum principal amount to be represented by a single certificate.

          The Rule 144A Global Note, the Regulation S Global Note, the Institutional Accredited Investor Global Note and the Exchange Global Note are sometimes collectively herein referred to as the “Global Securities.”

          The principal of (and premium, if any) and interest on the Securities shall be payable at the office or agency of the Company maintained for such purpose in the Borough of Manhattan, The City of New York, State of New York, or at such other office or agency of the Company as may be maintained for such purpose pursuant to Section 2.3; provided, however, that, at the option of the Company, each installment of interest may be paid by (i) check mailed to addresses of the Persons entitled thereto as such addresses shall appear on the Securities Register or (ii) wire transfer to an account located in the United States maintained by the payee. Payments in respect of Securities represented by a Global Security (including principal, premium, if any, and interest) will be made by wire transfer of immediately available funds to the accounts specified by DTC. Payments in respect of Securities represented by Definitive Securities (including principal, premium, if any, and interest) held by a Holder of at least $1,000,000 aggregate principal amount of Securities represented by Definitive Securities will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 15 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

          The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage, in addition to those set forth on Exhibit A and Exhibit B and under Section 2.1(d). The Company and the Trustee shall approve the forms of the Securities and any notation, endorsement or legend on them. Each Security shall be dated the date of its authentication. The terms of the Securities set forth in Exhibit A and Exhibit B are part of the terms of this Indenture and, to the extent applicable, the Company and the Trustee by their execution and delivery of this Indenture, expressly agree to be bound by such terms.

          (c) Denominations. The Securities shall be issuable only in fully registered form, without interest coupons, and only in denominations of $1,000 and an integral multiple thereof.

          (d) Restrictive Legends. Unless and until (i) an Initial Security is sold under an effective registration statement or (ii) an Initial Security is exchanged for an Exchange

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Security in connection with an effective registration statement, in each case pursuant to the Registration Rights Agreement or a similar agreement,

          (A) the Rule 144A Global Note and the Institutional Accredited Investor Global Note shall bear the following legend (the “Private Placement Legend”) on the face thereof:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE

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REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

          (B) the Regulation S Global Note shall bear the following legend (the “Regulation S Legend”) on the face thereof:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE

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RESTRICTION TERMINATION DATE. BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.

          (C) Each Global Security, whether or not an Initial Security, shall bear the following legend on the face thereof:

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE, AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

          (e) Book-Entry Provisions.

          (i) This Section 2.1(e) shall apply only to Global Securities deposited with the Trustee, as custodian for DTC.

          (ii) Each Global Security initially shall (x) be registered in the name of DTC or the nominee of DTC, (y) be delivered to the Trustee as custodian for DTC and (z) bear legends as set forth under Section 2.1(d).

          (iii) Members of, or participants in, DTC (“Agent Members”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by DTC or by the Trustee as the custodian of DTC or under such Global Security, and DTC may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by DTC or impair, as between DTC and its Agent Members, the operation of customary practices of DTC governing the exercise of the rights of a Holder of a beneficial interest in any Global Security.

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          (iv) In connection with any transfer of a portion of the beneficial interest in a Global Security pursuant to subsection (f) of this Section 2.1 to beneficial owners who are required to hold Definitive Securities, the Securities Custodian shall reflect on its books and records the date and a decrease in the principal amount of such Global Security in an amount equal to the principal amount of the beneficial interest in the Global Security to be transferred, and the Company shall execute, and the Trustee shall authenticate and make available for delivery, one or more Definitive Securities of like tenor and amount.

          (v) In connection with the transfer of an entire Global Security to beneficial owners pursuant to subsection (f) of this Section 2.1, such Global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and make available for delivery, to each beneficial owner identified by DTC in exchange for its beneficial interest in such Global Security, an equal aggregate principal amount of Definitive Securities of authorized denominations.

          (vi) The registered Holder of a Global Security may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities.

          (vii) Any Holder of a Global Security shall, by acceptance of such Global Security, agree that transfers of beneficial interests in such Global Security may be effected only through a book-entry system maintained by (a) the Holder of such Global Security (or its agent) or (b) any Holder of a beneficial interest in such Global Security, and that ownership of a beneficial interest in such Global Security shall be required to be reflected in a book entry.

          (f) Definitive Securities. (i) Except as provided below, owners of beneficial interests in Global Securities will not be entitled to receive Definitive Securities. If required to do so pursuant to any applicable law or regulation, beneficial owners may obtain Definitive Securities in exchange for their beneficial interests in a Global Security upon written request in accordance with DTC’s and the Registrar’s procedures. In addition, Definitive Securities shall be transferred to all beneficial owners in exchange for their beneficial interests in a Global Security if (A) DTC notifies the Company at any time that it is unwilling or unable to continue as depositary for such Global Security or DTC ceases to be a clearing agency registered under the Exchange Act, at a time when DTC is required to be so registered in order to act as depositary, and in each case a successor depositary is not appointed by the Company within 90 days of such notice or (B) the Company in its sole discretion executes and delivers to the Trustee and Registrar an Officers’ Certificate stating that such Global Security shall be so exchangeable or (C) an Event of Default has occurred and is continuing and the Registrar has received a request from DTC. In the event of the occurrence of any of the events specified in clause (A), (B) or (C) of the preceding sentence, the Company shall promptly make available to the Trustee a reasonable supply of Definitive Securities in fully registered form without interest coupons.

          (ii) Any Definitive Security delivered in exchange for an interest in a Global Security pursuant to Section 2.1(e)(iv) or (v) shall, except as otherwise provided by Section 2.6(c), bear the applicable legend regarding transfer restrictions applicable to the Definitive Security set forth under Section 2.1(d).

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          (iii) In connection with the exchange of a portion of a Definitive Security for a beneficial interest in a Global Security, the Trustee shall cancel such Definitive Security, and the Company shall execute, and the Trustee shall authenticate and make available for delivery, to the transferring Holder a new Definitive Security representing the principal amount not so transferred.

          (g) OID Legend. Each Security issued with “original issue discount” as defined in Section 1273 of the Code, whether an Initial Security, Additional Security or Exchange Security, shall bear the following legend on the face thereof:

THIS SECURITY WAS ISSUED WITH “ORIGINAL ISSUE DISCOUNT” AS DEFINED IN SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. YOU MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE PRICE, THE ISSUE DATE AND THE YIELD TO MATURITY BY CONTACTING THE CHIEF FINANCIAL OFFICER OF LIBBEY GLASS INC. AT 300 MADISON AVENUE, P.O. BOX 10060, TOLEDO, OHIO 43699-0060, OR AT (419) 325-2100.

          SECTION 2.2. Execution and Authentication. One Officer shall sign the Securities for the Company by manual or facsimile signature. If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless.

          A Security shall not be valid until an authorized signatory of the Trustee manually authenticates the Security. The signature of the Trustee on a Security shall be conclusive evidence that such Security has been duly and validly authenticated and issued under this Indenture. A Security shall be dated the date of its authentication.

          At any time and from time to time after the execution and delivery of this Indenture, the Trustee shall authenticate and make available for delivery: (1) Initial Securities for original issue on the Issue Date in an aggregate principal amount of $306,000,000, (2) subject to the terms of this Indenture, Additional Securities for original issue in an unlimited principal amount and (3) Exchange Securities for issue only in an Exchange Offer or upon resale under an effective Shelf Registration Statement, and only in exchange for Initial Securities or Additional Securities of an equal principal amount, in each case upon a written order of the Company signed by one Officer of the Company (the “Company Order”). Such Company Order shall specify whether the Securities will be in the form of Definitive Securities or Global Securities, the amount of the Securities to be authenticated and the date on which the original issue of Securities is to be authenticated and whether the Securities are to be Initial Securities, Additional Securities or Exchange Securities.

          The Trustee may appoint an agent (the “Authenticating Agent”) reasonably acceptable to the Company to authenticate the Securities. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Company. Unless limited by the terms of such appointment, any such Authenticating Agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by the Authenticating Agent. An

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Authenticating Agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

          In case the Company, pursuant to Article IV, shall be consolidated or merged with or into any other Person or shall convey, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any Person, and the successor Person resulting from such consolidation, or surviving such merger, or into which the Company shall have been merged, or the Person which shall have received a conveyance, transfer, lease or other disposition as aforesaid, shall have executed an indenture supplemental hereto with the Trustee pursuant to Article IV, any of the Securities authenticated or delivered prior to such consolidation, merger, conveyance, transfer, lease or other disposition may, from time to time, at the request of the successor Person, be exchanged for other Securities executed in the name of the successor Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon Company Order of the successor Person, shall authenticate and make available for delivery Securities as specified in such order for the purpose of such exchange. If Securities shall at any time be authenticated and delivered in any new name of a successor Person pursuant to this Section 2.2 in exchange or substitution for or upon registration of transfer of any Securities, such successor Person, at the option of the Holders but without expense to them, shall provide for the exchange of all Securities at the time outstanding for Securities authenticated and delivered in such new name.

          SECTION 2.3. Registrar and Paying Agent. The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange (the “Registrar”) and an office or agency where Securities may be presented for payment (the “Paying Agent”). In addition, the Company shall appoint and maintain at all times a Calculation Agent (the “Calculation Agent”) for purposes of the calculating the interest on the Securities, which shall initially be the Trustee. The Company shall cause each of the Registrar and the Paying Agent to maintain an office or agency in New York, New York. The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may have one or more co-registrars and one or more additional paying agents. The term “Paying Agent” includes any additional paying agent, and the term “Registrar” includes any co-registrar.

          The Company shall advise the Calculation Agent in writing prior to any interest payment date of any additional interest payable pursuant to the Registration Rights Agreement.

          The Company shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of each such agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.7. Any of the Company’s Restricted Subsidiaries organized in the United States may act as Paying Agent, Registrar or transfer agent.

          The Company initially appoints the Trustee as Registrar and Paying Agent for the Securities. The Company may remove any Registrar or Paying Agent without notice to any

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Holder upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) acceptance of any appointment by a successor as evidenced by an appropriate agreement entered into by the Company and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Company and the Trustee.

          SECTION 2.4. Paying Agent to Hold Money in Trust. By no later than 10:00 a.m. (New York City time) on the date on which any principal of, premium, if any, or interest on any Security is due and payable, the Company shall deposit with the Paying Agent a sum sufficient in immediately available funds to pay such principal, premium, if any, or interest when due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that such Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all money held by such Paying Agent for the payment of principal, premium, if any, of or interest on the Securities (whether such assets have been distributed to it by the Company or other obligors on the Securities) and shall notify the Trustee in writing of any default by the Company or any Subsidiary Guarantor in making any such payment. If any Subsidiary Guarantor of the Company acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent (other than the Trustee) to pay all money held by it to the Trustee and to account for any funds or assets disbursed by such Paying Agent. Upon complying with this Section 2.4, the Paying Agent (if other than a Subsidiary Guarantor of the Company) shall have no further liability for the money delivered to the Trustee. Upon any bankruptcy, reorganization or similar proceeding with respect to the Company, the Trustee shall serve as Paying Agent for the Securities.

          SECTION 2.5. Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, or to the extent otherwise required under the TIA, the Company, on its own behalf and on behalf of each of the Subsidiary Guarantors, if any, shall furnish or cause the Registrar to furnish to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders, and the Company and the Subsidiary Guarantors shall otherwise comply with TIA § 312(a).

          SECTION 2.6. Transfer and Exchange. (a) The following provisions shall apply with respect to any proposed transfer of a Rule 144A Note or an Institutional Accredited Investor Note prior to the date which is two years after the later of the date of its original issue and the last date on which the Company or any Affiliate of the Company was the owner of such Securities (or any predecessor thereto) (the “Resale Restriction Termination Date”):

     (i) a transfer of a Rule 144A Note or an Institutional Accredited Investor Note or a beneficial interest therein to a QIB shall be made upon the representation of the transferee, in the form of assignment as set forth on the reverse of the Security, that it is purchasing the Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified

45

institutional buyer” within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A;

     (ii) a transfer of a Rule 144A Note or an Institutional Accredited Investor Note or a beneficial interest therein to an IAI shall be made upon receipt by the Trustee or its agent of a certificate substantially in the form set forth under Section 2.7 from the proposed transferee and, if requested by the Company or the Trustee, the receipt by the Trustee or its agent of an opinion of counsel, certification and/or other information satisfactory to each of them; and

     (iii) a transfer of a Rule 144A Note or an Institutional Accredited Investor Note or a beneficial interest therein to a Non-U.S. Person shall be made upon receipt by the Trustee or its agent of a certificate substantially in the form set forth under Section 2.8 from the proposed transferor and, if requested by the Company or the Trustee, the delivery of an opinion of counsel, certification and/or other information satisfactory to each of them.

          After the Resale Restriction Termination Date, interests in a Rule 144A Note or an Institutional Accredited Investor Note may be transferred in accordance with applicable law without requiring the certifications set forth under Section 2.7 or 2.8 or any additional certification.

          (b) The following provisions shall apply with respect to any proposed transfer of a Regulation S Note prior to the expiration of the Restricted Period:

     (i) a transfer of a Regulation S Note or a beneficial interest therein to a QIB shall be made upon the representation of the transferee, in the form of assignment as set forth on the reverse of the Security, that it is purchasing the Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A;

     (ii) a transfer of a Regulation S Note or a beneficial interest therein to an IAI shall be made upon receipt by the Trustee or its agent of a certificate substantially in the form set forth under Section 2.7 from the proposed transferee and, if requested by the Company or the Trustee, the delivery of an opinion of counsel, certification and/or other information satisfactory to each of them; and

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     (iii) a transfer of a Regulation S Note or a beneficial interest therein to a Non-U.S. Person shall be made upon receipt by the Trustee or its agent of a certificate substantially in the form set forth under Section 2.8 hereof from the proposed transferor and, if requested by the Company or the Trustee, receipt by the Trustee or its agent of an opinion of counsel, certification and/or other information satisfactory to each of them.

          After the expiration of the Restricted Period, interests in the Regulation S Note may be transferred in accordance with applicable law without requiring the certifications set forth under Section 2.7 or 2.8 or any additional certification.

          (c) Restricted Securities Legend. Upon the transfer, exchange or replacement of Securities not bearing a Restricted Securities Legend, the Registrar shall deliver Securities that do not bear a Restricted Securities Legend. Upon the transfer, exchange or replacement of Securities bearing a Restricted Securities Legend, the Registrar shall deliver only Securities that bear a Restricted Securities Legend unless (i) Initial Securities are being exchanged for Exchange Securities in an Exchange Offer, in which case the Exchange Securities shall not bear a Restricted Securities Legend, (ii) an Initial Security is being transferred pursuant to the Shelf Registration Statement or other effective registration statement or (iii) there is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act. Any Additional Securities sold in a registered offering shall not be required to bear the Restricted Securities Legend.

          (d) The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.1 or this Section 2.6. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable prior written notice to the Registrar.

          (e) Obligations with Respect to Transfers and Exchanges of Securities.

     (i) To permit registrations of transfers and exchanges, the Company shall, subject to the other terms and conditions of this Article II, execute, and the Trustee shall authenticate, Definitive Securities and Global Securities at the Registrar’s request.

     (ii) No service charge shall be made to a Holder for any registration of transfer or exchange, but the Company may require the Holder to pay a sum sufficient to cover any transfer tax, assessment or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charges payable upon exchange or transfer pursuant to Section 9.5).

     (iii) The Company (and the Registrar) shall not be required to register the transfer of or exchange of any Security for a period beginning 15 days before the mailing of a notice of an offer to repurchase or redeem Securities and ending at the close of business on the day of such mailing. The Company (and the Registrar) shall not be required to register the transfer of or exchange of any Security selected for redemption.

     (iv) Prior to the due presentation for registration of transfer of any Security, the Company, the Trustee, the Paying Agent or the Registrar may deem and treat the

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person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of, premium, if any, and interest on such Security and for all other purposes whatsoever, including the transfer or exchange of such Security, whether or not such Security is overdue, and none of the Company, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.

   (v) All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Securities surrendered upon such transfer or exchange.

          (f) No Obligation of the Trustee.

          (i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Security, a member of, or a participant in, DTC or other Person with respect to the accuracy of the records of DTC or its nominee or of any participant or member thereof, with respect to any ownership interest in the Securities or with respect to the delivery to any participant, member, beneficial owner or other Person (other than DTC) of any notice (including any notice of redemption) or the payment of any amount or delivery of any Securities (or other security or property) under or with respect to such Securities. All notices and communications to be given to the Holders and all payments to be made to Holders in respect of the Securities shall be given or made only to or upon the order of the registered Holders (which shall be DTC or its nominee in the case of a Global Security). The rights of beneficial owners in any Global Security shall be exercised only through DTC subject to the applicable rules and procedures of DTC. The Trustee may rely and shall be fully protected in relying upon information furnished by DTC with respect to its members, participants and any beneficial owners.

          (ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among DTC participants, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

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          SECTION 2.7. Form of Certificate to be Delivered in Connection with Transfers to IAIs.

[Date]

The Bank of New York Trust Company, N.A.
2 North LaSalle Street
Chicago, IL 60602
Attention: Corporate Trust Administration

Re:	Libbey Glass Inc.
	Floating Rate Senior Secured Notes, Series A, due 2011

Ladies and Gentlemen:

          This certificate is delivered to request a transfer of $                                         principal amount of the Floating Rate Senior Secured Notes, Series A, due 2011 (the “Securities”) of Libbey Glass Inc. (the “Company”).

          Upon transfer, the Securities would be registered in the name of the new beneficial owner as follows:

          Name:                                                                                         

          Address:                                                                                      

          Taxpayer ID Number:                                                                 

          The undersigned represents and warrants to you that:

          1. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “Securities Act”)), purchasing for our own account or for the account of such an institutional “accredited investor” at least $250,000 principal amount of the Securities, and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risk of our investment in the Securities, and we invest in or purchase securities similar to the Securities in the normal course of our business. We and any accounts for which we are acting are each able to bear the economic risk of our or its investment.

          2. We understand that the Securities have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Securities to offer, sell or otherwise transfer such Securities prior to the date that is two years after the later of the date of original issue and the last date on which the Company or any affiliate of the Company was the owner of such Securities (or any predecessor thereto) (the “Resale Restriction Termination Date”) only (a) to the Company, (b) pursuant to a registration statement that has been declared effective under the Securities Act, (c) in a transaction

49

complying with the requirements of Rule 144A under the Securities Act, to a person we reasonably believe is a “qualified institutional buyer” under Rule 144A under the Securities Act (a “QIB”) that is purchasing for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act, (e) to an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing for its own account or for the account of such an institutional “accredited investor,” in each case in a minimum principal amount of Securities of $250,000, for investment purposes and not with a view to or for offer or sale in connection with any distribution in violation of the Securities Act or (f) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Securities is proposed to be made pursuant to clause (e) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Company and The Bank of New York Trust Company, N.A., as Trustee (the “Trustee”), which shall provide, among other things, that the transferee is an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and that it is acquiring such Securities for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Company and the Trustee reserve the right prior to any offer, sale or other transfer prior to the Resale Termination Date of the Securities pursuant to clause (d), (e) or (f) above to require the delivery of an opinion of counsel, certifications and/or other information satisfactory to the Company and the Trustee.

          The Trustee and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

TRANSFEREE:                                                            

BY:                                                                                      

cc: Libbey Glass Inc.

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          SECTION 2.8. Form of Certificate to be Delivered in Connection with Transfers Pursuant to Regulation S.

[Date]

The Bank of New York Trust Company, N.A.
2 North LaSalle Street
Chicago, IL 60602
Attention: Corporate Trust Administration

Re:	Libbey Glass Inc.
	Floating Rate Senior Secured Notes, Series A, due 2011

Ladies and Gentlemen:

          In connection with our proposed sale of $                                         aggregate principal amount of the Floating Rate Senior Secured Notes, Series A, due 2011 (the “Securities”) of Libbey Glass Inc. (the “Company”), we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the United States Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent that:

          (a) the offer of the Securities was not made to a person in the United States;

          (b) either (i) at the time the buy order was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States or (ii) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States;

          (c) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(a)(2) or Rule 904(a)(2) of Regulation S, as applicable; and

          (d) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act.

          In addition, if the sale is made during a restricted period and the provisions of Rule 903(b)(2) or Rule 904(b)(1) of Regulation S are applicable thereto, we confirm that such sale has been made in accordance with the applicable provisions of Rule 903(b)(2) or Rule 904(b)(1), as the case may be.

          The Bank of New York Trust Company, N.A., as Trustee, and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S.

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Very truly yours,

[Name of Transferor]

By:

Authorized Signature

cc: Libbey Glass Inc.

          SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities. If a mutilated Security is surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder (a) notifies the Company or the Trustee within a reasonable time after such Holder has notice of such loss, destruction or wrongful taking and the Registrar has not registered a transfer prior to receiving such notification, (b) makes such request to the Company or the Trustee prior to the Security being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a “protected purchaser”) and (c) satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Company, such Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent and the Registrar from any loss which any of them may suffer if a Security is replaced, and, in the absence of notice to the Company, any Subsidiary Guarantor or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and, upon receipt of a Company Order, the Trustee shall authenticate and make available for delivery, in exchange for any such mutilated Security or in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount, bearing a number not contemporaneously outstanding.

          In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

          Upon the issuance of any new Security under this Section, the Company may require that such Holder pay a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of counsel and of the Trustee) in connection therewith.

          Every new Security issued pursuant to this Section in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, any Subsidiary Guarantor (if applicable) and any other obligor upon the Securities, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.

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          The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

          SECTION 2.10. Outstanding Securities. Securities outstanding at any time are all Securities authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation and those described in this Section as not outstanding. A Security does not cease to be outstanding in the event either of the Company or an Affiliate of the Company holds the Security; provided, however, that (i) for purposes of determining which are outstanding for consent or voting purposes hereunder, the provisions of Section 11.7 shall apply and (ii) in determining whether the Trustee shall be protected in making a determination whether the Holders of the requisite principal amount of outstanding Securities are present at a meeting of Holders of Securities for quorum purposes or have consented to or voted in favor of any request, demand, authorization, direction, notice, consent, waiver, amendment or modification hereunder, or relying upon any such quorum, consent or vote, only Securities which a Trust Officer of the Trustee actually knows to be held by the Company or an Affiliate of the Company shall not be considered outstanding.

          If a Security is replaced pursuant to Section 2.9 (other than a mutilated Security surrendered for replacement), it ceases to be outstanding and interest on it ceases to accrue unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a protected purchaser. A mutilated Security ceases to be outstanding upon surrender of such Security and replacement pursuant to Section 2.9.

          If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a Redemption Date or maturity date money sufficient to pay all principal, premium, if any, and accrued interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

          SECTION 2.11. Temporary Securities. In the event that Definitive Securities are to be issued under the terms of this Indenture, until such Definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form, and shall carry all rights, of Definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate Definitive Securities. After the preparation of Definitive Securities, the temporary Securities shall be exchangeable for Definitive Securities upon surrender of the temporary Securities at any office or agency maintained by the Company for that purpose and such exchange shall be without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute, and the Trustee shall authenticate and make available for delivery in exchange therefor, one or more Definitive Securities representing an equal principal amount of Securities. Until so exchanged, the Holder of temporary Securities shall in all respects be entitled to the same benefits under this Indenture as a Holder of Definitive Securities.

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          SECTION 2.12. Cancellation. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment or cancellation and dispose of such Securities in accordance with its internal policies and customary procedures and shall deliver canceled Securities to the Company pursuant to written direction by an Officer of the Company. If the Company or any Subsidiary Guarantor acquires any of the Securities, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness represented by such Securities unless and until the same are surrendered to the Trustee for cancellation pursuant to this Section 2.12. The Company may not issue new Securities to replace Securities it has paid or delivered to the Trustee for cancellation for any reason other than in connection with a transfer or exchange.

          At such time as all beneficial interests in a Global Security have either been exchanged for Definitive Securities, transferred, redeemed, repurchased or canceled, such Global Security shall be returned by DTC to the Trustee for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for Definitive Securities, transferred in exchange for an interest in another Global Security, redeemed, repurchased or canceled, the principal amount of Securities represented by such Global Security shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Securities Custodian for such Global Security) with respect to such Global Security, by the Trustee or the Securities Custodian, to reflect such reduction.

          SECTION 2.13. Payment of Interest; Defaulted Interest. Interest on any Security which is payable, and is punctually paid or duly provided for, on any interest payment date shall be paid to the Person in whose name such Security (or one or more predecessor Securities) is registered at the close of business on the regular record date for such payment at the office or agency of the Company maintained for such purpose pursuant to Section 2.3.

          Any interest on any Security which is payable, but is not paid when the same becomes due and payable and such nonpayment continues for a period of 30 days shall forthwith cease to be payable to the Holder on the regular record date, and such defaulted interest and (to the extent lawful) interest on such defaulted interest at the rate borne by the Securities (such defaulted interest and interest thereon herein collectively called “Defaulted Interest”) shall be paid by the Company, at its election in each case, as provided in clause (a) or (b) below:

     (a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the close of business on a Special Record Date (as defined below) for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date (not less than 30 days after such notice) of the proposed payment (the “Special Interest Payment Date”), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons

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entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a record date (the “Special Record Date”) for the payment of such Defaulted Interest, which date shall be not more than 15 days and not less than 10 days prior to the Special Interest Payment Date and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor to be given in the manner provided for under Section 11.2 not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor having been so given, such Defaulted Interest shall be paid on the Special Interest Payment Date to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b).

     (b) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

          Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of, transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

          SECTION 2.14. Computation of Interest. Interest on the Securities will be computed on the basis of the actual number of days in an interest period and a 360-day year.

          SECTION 2.15. CUSIP, Common Code and ISIN Numbers. The Company in issuing the Securities may use “CUSIP,” “Common Code” or “ISIN” numbers and, if so, the Trustee shall use “CUSIP,” “Common Code” or “ISIN” numbers in notices of redemption or purchase as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption or purchase and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption or purchase shall not be affected by any defect in or omission of such CUSIP, Common Code or ISIN number. The Company shall promptly notify the Trustee in writing of any change in any CUSIP, Common Code or ISIN number.

ARTICLE III
COVENANTS

          SECTION 3.1. Payment of Securities. The Company shall promptly pay the principal of, premium, if any, and interest on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal, premium, if any, and interest shall be

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considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture immediately available funds sufficient to pay all principal, premium, if any, and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture.

          The Company shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

          The Company and any Subsidiary Guarantors will pay any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies that arise in any jurisdiction from the execution, delivery, enforcement or registration of the Securities, the Subsidiary Guarantees (if any), this Indenture or any other document or instrument in relation thereof, or the receipt of any payments with respect to the Securities or any Subsidiary Guarantees, excluding such taxes, charges or similar levies imposed by any jurisdiction outside of the United States, the jurisdiction of incorporation of any successor of the Company or any Subsidiary Guarantor or any jurisdiction in which a Paying Agent is located, other than those resulting from, or required to be paid in connection with, the enforcement of the Securities, the Subsidiary Guarantees or any other such document or instrument following the occurrence of any Event of Default with respect to the Securities. The Company or the Subsidiary Guarantors, if any, will agree to indemnify the Holders for any such taxes paid by such Holders.

          Notwithstanding anything to the contrary contained in this Indenture, the Company or any Subsidiary Guarantor may, to the extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal, premium or interest payments hereunder.

          SECTION 3.2. Limitation on Indebtedness. The Company will not, and will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness (including Acquired Indebtedness); provided, however, that the Company and the Subsidiary Guarantors may Incur Indebtedness if on the date thereof the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.00 to 1.00; provided, further, that if the Company and the Subsidiary Guarantors Incur Indebtedness during the PIK Period pursuant to this paragraph, such Indebtedness is expressly subordinated in right of payment to the Senior Secured Notes during the PIK Period and interest on such Indebtedness is payable solely by increasing the principal amount of such Indebtedness during the PIK Period.

          The first paragraph of this Section 3.2 will not prohibit the Incurrence of the following Indebtedness:

(1) Indebtedness of the Company, any Subsidiary Guarantor or any Restricted Subsidiary that is a Foreign Subsidiary Incurred pursuant to a Credit Facility in an aggregate amount up to the greater of (a) $150.0 million, less the aggregate principal amount of all principal repayments with the proceeds from Asset Dispositions utilized in accordance with clause 3(a)

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	of Section 3.5 that permanently reduce the commitments thereunder, and (b) the Borrowing Base;
(2)	Guarantees by (x) the Company or its Subsidiary Guarantors of Indebtedness Incurred by the Company or a Restricted Subsidiary in accordance with the provisions of this Indenture, provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Securities or the Subsidiary Guarantee, as the case may be, and (y) Non-Guarantor Restricted Subsidiaries of Indebtedness Incurred by Non-Guarantor Restricted Subsidiaries in accordance with the provisions of this Indenture;
(3)	Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any other Restricted Subsidiary; provided, however,

(a)	if the Company is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Securities;
(b)	if a Subsidiary Guarantor is the obligor on such Indebtedness and the Company or a Subsidiary Guarantor is not the obligee, such Indebtedness is subordinated in right of payment to the Subsidiary Guarantees of such Subsidiary Guarantor; and
(c)	(i) any subsequent issuance or transfer of Capital Stock or any other event that results in any such Indebtedness being beneficially held by a Person other than the Company or a Restricted Subsidiary of the Company; and
	(ii) any sale or other transfer of any such Indebtedness to a Person other than the Company or a Restricted Subsidiary of the Company

shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company or such Subsidiary, as the case may be.

(4) Indebtedness represented by (a) the Securities issued on the Issue Date, the Subsidiary Guarantees and the related Exchange Securities and exchange guarantees issued pursuant to the Registration Rights Agreement, (b) any Indebtedness (other than the Indebtedness described in clauses (1), (2), (3), (6), (8), (9), (10) and (11)) outstanding on the Issue Date and (c) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (4) or clause (5) or Incurred pursuant to the first paragraph of this Section 3.2;

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(5)	following the expiration of the PIK Period, Indebtedness of a Restricted Subsidiary Incurred and outstanding on the date on which such Restricted Subsidiary was acquired by, or merged into, the Company or any Restricted Subsidiary (other than Indebtedness Incurred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by the Company or (b) otherwise in connection with, or in contemplation of, such acquisition); provided, however, that at the time such Restricted Subsidiary is acquired by the Company, the Company would have been able to Incur $1.00 of additional Indebtedness pursuant to the first paragraph of this Section 3.2 after giving effect to the Incurrence of such Indebtedness pursuant to this clause (5);
(6)	Indebtedness under Hedging Obligations that are Incurred in the ordinary course of business (and not for speculative purposes);
(7)	the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capitalized Lease Obligations, mortgage financings or purchase money obligations Incurred pursuant to this clause (7), and Attributable Indebtedness, in an aggregate principal amount (including all Refinancing Indebtedness Incurred to refund, defease, renew, extend, refinance or replace any Indebtedness Incurred pursuant to this clause (7)) not to exceed during the PIK Period, $5.0 million and, thereafter, $15.0 million, in each case at any time outstanding;
(8)	Indebtedness Incurred in respect of workers’ compensation claims, self-insurance obligations, performance, surety and similar bonds, warranties, indemnities and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business;
(9)	Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for customary guarantees, indemnification, adjustment of purchase price or similar obligations, in each case, Incurred or assumed in connection with the disposition of any business, assets or Capital Stock of a Restricted Subsidiary, provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(10)	Indebtedness represented by earnout provisions, contingent payments in respect of purchase price or adjustment of purchase price or similar obligations in acquisition agreements; provided that this clause (10) shall not extend to Indebtedness Incurred to finance an earnout or any other component of such Investment;

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(11)	Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, provided, however, that such Indebtedness is extinguished within five business days of Incurrence;
(12)	Indebtedness Incurred by Foreign Subsidiaries that are not Subsidiary Guarantors in an aggregate principal amount, together with all other Indebtedness (including Refinancing Indebtedness) Incurred pursuant to this clause (12), not to exceed, during the PIK Period, $45.0 million and, thereafter, the greater of (x) $25.0 million and (y) 6% of Foreign Assets, in each case at any time outstanding; provided, however, that such Indebtedness Incurred pursuant to this clause (12) during the PIK Period shall only consist of (i) Incurrences to fund working capital related to the Company’s Foreign Subsidiaries organized in Mexico in an aggregate amount not to exceed $15.0 million, (ii) Incurrences to fund capital expenditures related to the Company’s Foreign Subsidiaries organized in Mexico in an aggregate amount not to exceed $15.0 million and (iii) Incurrences to fund working capital and capital expenditures related to the Company’s Foreign Subsidiaries organized in Portugal in an aggregate amount not to exceed $15.0 million;
(13)	Indebtedness of Libbey Glassware (China) Co., Ltd. or a Restricted Subsidiary that is a Foreign Subsidiary organized under the laws of the People’s Republic of China Incurred pursuant to a Credit Facility in an aggregate principal amount, together with all other Indebtedness (including Refinancing Indebtedness) Incurred pursuant to this clause (13), not to exceed $30.0 million at any time outstanding and any Guarantee of such Indebtedness issued by the Company; and
(14)	following the expiration of the PIK Period, in addition to the items referred to in clauses (1) through (13) above, Indebtedness of the Company and its Restricted Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness (including (i) any outstanding Indebtedness in excess of the greater of (x) $25.0 million and (y) 6% of Foreign Assets Incurred pursuant to clause (12) above as determined on the date of the expiration of the PIK Period and not classified by Libbey Glass in any other manner that complies with this covenant, which excess not so otherwise classified shall be deemed classified as Indebtedness Incurred under this clause (14) and (ii) Refinancing Indebtedness) Incurred pursuant to this clause (14) and then outstanding, will not exceed $20.0 million at any time outstanding.

          The Company will not Incur any Indebtedness under the preceding paragraph if the proceeds thereof are used, directly or indirectly, to refinance any Subordinated Obligations of the Company unless such Indebtedness will be subordinated to the Securities to at least the same

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extent as such Subordinated Obligations. No Subsidiary Guarantor will Incur any Indebtedness if the proceeds thereof are used, directly or indirectly, to refinance any Guarantor Subordinated Obligations of such Subsidiary Guarantor unless such Indebtedness will be subordinated to the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee to at least the same extent as such Guarantor Subordinated Obligations. No Restricted Subsidiary (other than a Subsidiary Guarantor) may Incur any Indebtedness if the proceeds are used to refinance Indebtedness of the Company or a Subsidiary Guarantor.

          For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to and in compliance with, this Section 3.2:

(1)	subject to clause (2) below, in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in the first and second paragraphs of this Section 3.2, the Company, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and, may later classify such item of Indebtedness in any manner that complies with this Section 3.2 and only be required to include the amount and type of such Indebtedness in one of such clauses;
(2)	all Indebtedness outstanding on the Issue Date under the Senior Secured Credit Agreement shall be deemed Incurred on the Issue Date under clause (1) of the second paragraph of this Section 3.2 and not the first paragraph or clause (4) of the second paragraph of this Section 3.2;
(3)	Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness that is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(4)	if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to clause (1) of the second paragraph above and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(5)	the principal amount of any Disqualified Stock of the Company or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary that is not a Subsidiary Guarantor, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof;
(6)	Indebtedness permitted by this Section 3.2 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.2 permitting such Indebtedness;
(7)	the principal amount of any Indebtedness outstanding in connection with a securitization transaction is the amount of obligations outstanding under

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	the legal documents entered into as part of such securitization that would be characterized as principal on any date of determination if such securitization transaction were structured as a secured lending transaction; and
(8)	the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.

          Accrual of interest, accrual of dividends, the accretion of accreted value, the payment of interest in the form of additional Indebtedness and the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.2. The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount or the aggregate principal amount outstanding in the case of Indebtedness issued with interest payable-in-kind and (ii) the principal amount or liquidation preference thereof, in the case of any other Indebtedness.

          In addition, the Company will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness or issue any shares of Disqualified Stock, other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if the Incurrence of such Indebtedness as of such date violates this Section 3.2, the Company shall be in Default of this Section 3.2).

          For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that the U.S. dollar-equivalent principal amount of Indebtedness of Libbey Glassware (China) Co., Ltd. under the Credit Facility to which it is a party as of the Issue Date shall be calculated based on the relevant currency exchange rate in effect on the date first committed; and provided further, that if any such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 3.2, the maximum amount of Indebtedness that the Company may Incur pursuant to this Section 3.2 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.

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          SECTION 3.3. Limitation on Restricted Payments. The Company will not, and will not permit any of its Restricted Subsidiaries, directly or indirectly, to:

(1) declare or pay any dividend or make any distribution (whether made in cash, securities or other property) on or in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) except:

(a)	dividends or distributions payable in Capital Stock of the Company (other than Disqualified Stock) or in options, warrants or other rights to purchase such Capital Stock of the Company; and
(b)	dividends or distributions payable to the Company or another Restricted Subsidiary (and if such Restricted Subsidiary is not a Wholly-Owned Subsidiary, to its other holders of common Capital Stock on a pro rata basis);

(2)	purchase, redeem, retire or otherwise acquire for value any Capital Stock of the Company or any direct or indirect parent of the Company held by Persons other than the Company or a Restricted Subsidiary (other than in exchange for Capital Stock of the Company (other than Disqualified Stock));
(3)	purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Obligations or Guarantor Subordinated Obligations (other than (x) Indebtedness of the Company owing to and held by any Subsidiary Guarantor or Indebtedness of a Subsidiary Guarantor owing to and held by the Company or any other Subsidiary Guarantor permitted under clause (3) of the second paragraph of Section 3.2 or (y) the purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Obligations or Guarantor Subordinated Obligations purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase, redemption, defeasance or other acquisition or retirement); or
(4)	make any Restricted Investment in any Person;

(any such dividend, distribution, purchase, redemption, repurchase, defeasance, other acquisition, retirement or Restricted Investment referred to in clauses (1) through (4) shall be referred to herein as a “Restricted Payment”), if at the time the Company or such Restricted Subsidiary makes such Restricted Payment:

(a) a Default shall have occurred and be continuing (or would result therefrom); or

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(b)	the Company is not able to Incur $1.00 of additional Indebtedness pursuant to the first paragraph of Section 3.2 after giving effect, on a pro forma basis, to such Restricted Payment; or
(c)	the aggregate amount of such Restricted Payment and all other Restricted Payments declared or made subsequent to the Issue Date (excluding Restricted Payments permitted by clauses (1), (2), (3), (4), (7), (8), (9), (11), (13) and (14) of the next succeeding paragraph) would exceed the sum of:

(i)	50% of Consolidated Net Income for the period (treated as one accounting period) from the beginning of the first fiscal quarter commencing after the Issue Date to the end of the most recent fiscal quarter ending prior to the date of such Restricted Payment for which financial statements are in existence (or, in case such Consolidated Net Income is a deficit, minus 100% of such deficit); plus
(ii)	100% of the aggregate Net Cash Proceeds received by the Company, plus the fair market value of property other than cash or of marketable securities (such fair market value to be determined on the date of contractually agreeing to such sale as determined in good faith by the Board of Directors) received by the Company from the issue or sale of its Capital Stock (other than Disqualified Stock) or other capital contributions subsequent to the Issue Date (other than Net Cash Proceeds received from an issuance or sale of such Capital Stock to a Subsidiary of the Company or an employee stock ownership plan, option plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or Guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination) excluding in any event Net Cash Proceeds received by the Company from the issue and sale of its Capital Stock or capital contributions to the extent applied to redeem Securities in compliance with the provisions of Article V as it relates to the second paragraph of Section 5 of the Securities; plus
(iii)	the amount by which Indebtedness of the Company or its Restricted Subsidiaries is reduced on the Company’s balance sheet upon the conversion or exchange (other than by a Subsidiary of the Company) subsequent to the Issue Date of any Indebtedness of the Company or its Restricted Subsidiaries convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Company (less the

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	amount of any cash, or the fair market value of any other property, distributed by the Company upon such conversion or exchange);
(iv)	100% of the Net Cash Proceeds and the fair market value of property other than cash and marketable securities (such fair market value to be determined in good faith by the Board of Directors) from the sale or other disposition (other than to the Company or a Note Guarantor or to an employee stock ownership plan or trust established by the Company or any Restricted Subsidiary) of Restricted Investments made after the Issue Date and redemptions and repurchases of such Restricted Investments from the Company or its Restricted Subsidiaries and repayment of loans or advances from the Company and its Restricted Subsidiaries (other than in each case to the extent the Restricted Investment was made pursuant to clause (14) of the next succeeding paragraph);
(v)	to the extent that any Unrestricted Subsidiary of the Company designated as such after the Issue Date is redesignated as a Restricted Subsidiary or any Unrestricted Subsidiary of the Company merges into or consolidates with the Company or any of its Restricted Subsidiaries, in each case after the Issue Date, the fair market value of such Subsidiary as of the date of such redesignation or such merger or consolidation, or in the case of the transfer of assets of an Unrestricted Subsidiary to the Company or a Restricted Subsidiary, the fair market value of the Investment in such Unrestricted Subsidiary, as determined by the Board of Directors of the Company in good faith at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary or at the time of such merger, consolidation or transfer of assets (other than an Unrestricted Subsidiary to the extent the Investment in such Unrestricted Subsidiary was made by a Restricted Subsidiary pursuant to clause (14) of the next succeeding paragraph or to the extent such Investment constituted a Permitted Investment); and
(vi)	50% of any dividends received by the Company or a Restricted Subsidiary of the Company after the Issue Date from an Unrestricted Subsidiary of the Company, to the extent that such dividends were not otherwise included in the Consolidated Net Income of the Company.

          The provisions of the preceding paragraph will not prohibit:

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(1)	any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Capital Stock, Disqualified Stock or Subordinated Obligations of the Company or Guarantor Subordinated Obligations of any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary or an employee stock ownership plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or Guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination); provided, however, that the Net Cash Proceeds from such sale of Capital Stock will be excluded from clause (c)(ii) of the preceding paragraph;
(2)	any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Obligations of the Company or Guarantor Subordinated Obligations of any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Subordinated Obligations of the Company or any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Guarantor Subordinated Obligations made by exchange for or out of the proceeds of the substantially concurrent sale of Guarantor Subordinated Obligations that, in each case, is permitted to be Incurred pursuant to Section 3.2 and that in each case constitutes Refinancing Indebtedness;
(3)	any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Disqualified Stock of the Company or a Restricted Subsidiary made by exchange for or out of the proceeds of the sale within 30 days of Disqualified Stock of the Company or such Restricted Subsidiary, as the case may be, that, in each case, is permitted to be Incurred pursuant to Section 3.2 and that in each case constitutes Refinancing Indebtedness;
(4)	any purchase or redemption of Subordinated Obligations or Guarantor Subordinated Obligations of a Subsidiary Guarantor from Net Available Cash to the extent permitted under Section 3.5 below;
(5)	dividends paid within 60 days after the date of declaration if at such date of declaration such dividend would have complied with this provision;
(6)	Restricted Payments, cash dividends or loans to the Parent, for the purchase, redemption or other acquisition, cancellation or retirement for value of Capital Stock, or options, warrants, equity appreciation rights or other rights to purchase or acquire Capital Stock, of the Company or any Restricted Subsidiary or any direct or indirect parent of the Company held by any existing or former directors, officers, employees or consultants of the Company or the Parent or any Subsidiary of the Company or their

65

	assigns, estates or heirs, in each case in connection with the repurchase provisions under stock option or stock purchase agreements or other agreements to compensate such Persons; provided, that such redemptions, repurchases or payments pursuant to this clause shall not be permitted with respect to the compensation or issuance of securities for any services that were not related to, or for the benefit of, the Company and its Restricted Subsidiaries; provided, further, that such redemptions or repurchases pursuant to this clause will not exceed $3.0 million in the aggregate during any calendar year; provided, further, that (x) the Company may carry over and make in subsequent calendar years, in addition to the $3.0 million amount permitted for such calendar year, the amount of such purchases, redemptions or other acquisitions or retirements for value permitted to be made, but not made, in any preceding calendar year, up to a maximum amount of $8.0 million in any calendar year and (y) the maximum amount in any calendar year may be increased by the amount of any capital contributions to the Company as a result of sales of such shares of Capital Stock of the Company or any direct or indirect parent of the Company to such persons (provided that the Net Cash Proceeds from such sale of Capital Stock will be excluded from clause (c)(ii) of the preceding paragraph of this Section 3.3) to the extent not so previously applied, plus the amount of any “key man” insurance proceeds, received by the Company or any Restricted Subsidiary to the extent not so previously applied;
(7)	following the expiration of the PIK Period, so long as no Default or Event of Default has occurred and is continuing, the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Company issued in accordance with the terms of this Indenture to the extent such dividends are included in the definition of “Consolidated Interest Expense”;
(8)	repurchases of Capital Stock deemed to occur upon (x) the exercise of stock options, warrants or other convertible securities if such Capital Stock represents a portion of the exercise price thereof or (y) cash dividends or loans to the Parent in amounts sufficient to pay taxes of directors, officers, employees or consultants relating to the withholding of a portion of the Capital Stock granted or awarded to a director, officer, employee or consultant in exchange for the payment of taxes payable by such Person upon such grant or award;
(9)	cash dividends or loans to the Parent in amounts equal to:

(a) the amounts required for the Parent to pay any Federal, state or local income taxes to the extent that such income taxes are directly attributable to the income of the Company and its Restricted Subsidiaries and, to the extent of amounts actually received from Unrestricted Subsidiaries, in amounts required to pay such taxes to

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	the extent attributable to the income of the Unrestricted Subsidiaries;
(b)	the amounts required for the Parent to pay franchise taxes and other fees required to maintain its legal existence;
(c)	amounts to pay corporate overhead expenses of the Parent Incurred in the ordinary course of business (including financing transactions that benefit the Company and its Restricted Subsidiaries), and to pay salaries, benefits or other compensation of directors, officers, employees and consultants who perform services for both the Parent and the Company;

(10)	the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Obligation (i) at a purchase price not greater than 101% of the principal amount of such Subordinated Obligation in the event of a Change of Control in accordance with provisions similar to Section 3.11 or (ii) at a purchase price not greater than 100% of the principal amount thereof in accordance with provisions similar to Section 3.5; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Disposition Offer, as applicable, as provided in such covenant with respect to the Securities and has completed the repurchase or redemption of all Securities validly tendered for payment in connection with such Change of Control Offer or Asset Disposition Offer;
(11)	the repurchase or redemption of the Company’s or the Parent’s preferred stock purchase rights, or any substitute therefor, in an aggregate amount not to exceed the product of (x) the number of outstanding shares of Common Stock of the Parent and (y) $0.01 per share, as such amount may be adjusted in accordance with the rights agreement relating to the Parent Common Stock;
(12)	cash dividends or loans to the Parent in amounts required for the Parent to declare and pay cash dividends on Parent Common Stock in an amount not to exceed $0.10 per share in any fiscal year, which amount will be reduced to reflect any subdivision of the Parent Common Stock by means of a stock split, stock dividend or otherwise; provided that at the time of declaration of such dividend permitted, (x) no Event of Default (and, following the expiration of the PIK Period, no Default) has occurred and is continuing and (y) to the extent such cash dividends or loans are made following the expiration of the PIK Period, the Company is able to Incur at least an additional $1.00 of Indebtedness pursuant to the first paragraph of Section 3.2;

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(13)	the repurchase, redemption or other acquisition for value of Capital Stock of the Company or any direct or indirect parent of the Company representing fractional shares of such Capital Stock in connection with a merger, consolidation, amalgamation or other combination involving the Company or any direct or indirect parent of the Company; and
(14)	following the expiration of the PIK Period, Restricted Payments in an amount not to exceed $10.0 million.

          The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of such Restricted Payment of the asset(s) or securities proposed to be paid, transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment. The fair market value of any cash Restricted Payment shall be its face amount and any non-cash Restricted Payment shall be determined conclusively by the Board of Directors of the Company acting in good faith whose resolution with respect thereto shall be delivered to the Trustee, such determination to be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if such fair market value is estimated in good faith by the Board of Directors of the Company to exceed $20.0 million. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 3.3 were computed, together with a copy of any fairness opinion or appraisal required by this Indenture.

          SECTION 3.4. Limitation on Restrictions on Distributions from Restricted Subsidiaries. The Company will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

(1)	pay dividends or make any other distributions on its Capital Stock or pay any Indebtedness or other obligations owed to the Company or any Restricted Subsidiary (it being understood that the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on Common Stock shall not be deemed a restriction on the ability to make distributions on Capital Stock);
(2)	make any loans or advances to the Company or any Restricted Subsidiary (it being understood that the subordination of loans or advances made to the Company or any Restricted Subsidiary to other Indebtedness Incurred by the Company or any Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances); or
(3)	transfer any of its property or assets to the Company or any Restricted Subsidiary (it being understood that such transfers shall not include any type of transfer described in clause (1) or (2) above).

          The provisions of the preceding paragraph will not prohibit:

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(i)	any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Issue Date, including, without limitation, this Indenture, the Securities, the Exchange Securities, the Subsidiary Guarantees, the Collateral Documents, the Intercreditor Agreement, the Private Placement Notes and the Senior Secured Credit Agreement (and related documentation) in effect on such date;
(ii)	any encumbrance or restriction with respect to a Person pursuant to an agreement relating to any Capital Stock or Indebtedness Incurred by such Person on or before the date on which such Person became a Restricted Subsidiary or was acquired by, merged into or consolidated with the Company or a Restricted Subsidiary (other than Capital Stock or Indebtedness Incurred as consideration in, or to provide all or any portion of the funds utilized to consummate, the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was acquired by, merged into or consolidated with the Company or in contemplation of the transaction) and outstanding on such date, provided, that any such encumbrance or restriction shall not extend to any assets or property of the Company or any other Restricted Subsidiary other than the assets and property so acquired and that, in the case of Indebtedness, was permitted to be Incurred pursuant to this Indenture;
(iii)	any encumbrance or restriction pursuant to an agreement effecting a refunding, replacement or refinancing of Indebtedness Incurred pursuant to an agreement referred to in clause (i) or (ii) of this paragraph or this clause (iii) or contained in any amendment, restatement, modification, renewal, supplement, refunding, replacement or refinancing of an agreement referred to in clause (i) or (ii) of this paragraph or this clause (iii); provided, however, that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such agreement are no less favorable in any material respect, taken as a whole, to the Holders of the Securities than the encumbrances and restrictions contained in such agreements referred to in clauses (i) or (ii) of this paragraph on the Issue Date or the date such Restricted Subsidiary became a Restricted Subsidiary or was merged into a Restricted Subsidiary, whichever is applicable;
(iv)	in the case of clause (3) of the first paragraph of this Section 3.4, Liens permitted to be incurred under the provisions of Section 3.6;
(v)	(a) purchase money obligations for property acquired in the ordinary course of business and (b) Capitalized Lease Obligations permitted under this Indenture, in each case, that impose encumbrances or restrictions of the nature described in clause (3) of the first paragraph of this Section 3.4 on the property so acquired;

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(vi)	any restriction with respect to a Restricted Subsidiary (or any of its property or assets) imposed pursuant to an agreement entered into for the direct or indirect sale or disposition of the Capital Stock or assets of such Restricted Subsidiary (or the property or assets that are subject to such restriction) pending the closing of such sale or disposition;
(vii)	any customary provisions in joint venture agreements relating to joint ventures and other similar agreements entered into in the ordinary course of business, provided that if such joint venture is a Restricted Subsidiary, such provisions will not materially affect the Company’s ability to make anticipated principal or interest payments on the Securities (as determined by the Board of Directors of the Company);
(viii)	net worth provisions in leases and other agreements entered into by the Company or any Restricted Subsidiary in the ordinary course of business;
(ix)	encumbrances or restrictions arising or existing by reason of applicable law or any applicable rule, regulation or order;
(x)	encumbrances or restrictions contained in indentures or debt instruments or other debt arrangements Incurred or Preferred Stock issued by Subsidiary Guarantors in accordance with Section 3.2, that are not more restrictive, taken as a whole, than those applicable to the Company in either this Indenture or the Senior Secured Credit Agreement on the Issue Date (which results in encumbrances or restrictions comparable to those applicable to the Company at a Restricted Subsidiary level); and
(xi)	encumbrances or restrictions contained in indentures or other debt instruments or debt arrangements Incurred or Preferred Stock issued by Restricted Subsidiaries that are not Subsidiary Guarantors subsequent to the Issue Date pursuant to clauses (5), (12), (13) and (14) of the second paragraph of Section 3.2, by Restricted Subsidiaries, provided that such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Company’s ability to make anticipated principal or interest payments on the Securities (as determined by the Board of Directors of the Company).

          SECTION 3.5. Limitation on Sales of Assets and Subsidiary Stock. The Company will not, and will not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:

(1) the Company or such Restricted Subsidiary, as the case may be, receives consideration at least equal to the fair market value (such fair market value to be determined on the date of contractually agreeing to such Asset Disposition), as determined in good faith by the Board of Directors (including as to the value of all non-cash consideration), of the shares and assets subject to such Asset Disposition;

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(2)	except for any Permitted Asset Swap, at least 75% of the consideration from such Asset Disposition received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; and
(3)	an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Company or such Restricted Subsidiary, as the case may be:
	(a) to prepay, repay or purchase secured Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) or secured Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations of a Restricted Subsidiary that is a Subsidiary Guarantor) (in each case other than Indebtedness owed to the Company or an Affiliate of the Company) within 365 days from the later of the date of such Asset Disposition or the receipt of such Net Available Cash; provided, however, that, in connection with any prepayment, repayment or purchase of Indebtedness pursuant to this clause (a), the Company or such Restricted Subsidiary will retire such Indebtedness and will cause the related commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased; or
	(b) to invest in Additional Assets within 365 days from the later of the date of such Asset Disposition or the receipt of such Net Available Cash; provided, however, that with respect to Asset Dispositions of Collateral, such Additional Assets are added to the Collateral with the exception of Net Available Cash not to exceed $15.0 million that is invested in Additional Assets of Non-Guarantor Restricted Subsidiaries;

provided that pending the final application of any such Net Available Cash in accordance with clause (a) or clause (b) above, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness or otherwise invest such Net Available Cash in any manner not prohibited by this Indenture; provided, further that in the case of an Asset Disposition of Collateral, any cash will be deposited in accordance with the Intercreditor Agreement.

          Any Net Available Cash from Asset Dispositions that are not applied or invested as provided in the preceding paragraph will be deemed to constitute “Excess Proceeds.” To the extent that the aggregate amount of Excess Proceeds exceeds $10.0 million on the 366^th day after an Asset Disposition, the Company will be required to make an offer (“Asset Disposition Offer”) to all Holders of Securities and to the extent required by the terms of other Pari Passu Secured Indebtedness, to all holders of other Pari Passu Secured Indebtedness outstanding with similar provisions requiring the Company to make an offer to purchase such Pari Passu Secured Indebtedness with the proceeds from any Asset Disposition (“Pari Passu Notes”), to purchase the maximum principal amount of Securities and any such Pari Passu Notes to which the Asset Disposition Offer applies that may be purchased out of the Excess Proceeds, at an offer price in

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cash in an amount equal to 100% of the principal amount of the Securities and Pari Passu Notes plus accrued and unpaid interest to the date of purchase, in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Notes, as applicable, and in compliance with the Intercreditor Agreement in each case in integral multiples of $1,000. To the extent that the aggregate amount of Securities and Pari Passu Notes so validly tendered and not properly withdrawn pursuant to an Asset Disposition Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate purposes, subject to other covenants contained in this Indenture. If the aggregate principal amount of Securities surrendered by Holders thereof and other Pari Passu Notes surrendered by holders or lenders, collectively, exceeds the amount of Excess Proceeds, the Trustee shall select the Securities and Pari Passu Notes to be purchased on a pro rata basis on the basis of the aggregate principal amount of tendered Securities and Pari Passu Notes. Upon completion of such Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero.

          The Asset Disposition Offer will remain open for a period of 20 Business Days following its commencement, except to the extent that a longer period is required by applicable law (the “Asset Disposition Offer Period”). The Company will mail a notice of an Asset Disposition Offer first class, postage prepaid, to the record holders shown on the register of Holders within 20 days following the 366th day referred to in the second paragraph of this Section 3.5 with a copy to the Trustee, offering to purchase the Securities and Pari Passu Notes as described above. Each notice of an Asset Disposition Offer shall state, among other things, the purchase date, which must be no earlier than 30 days nor later than 60 days from the date the notice is mailed, subject to applicable law (the “Asset Disposition Purchase Date”). No later than five Business Days after the termination of the Asset Disposition Offer Period, the Company will purchase the principal amount of Securities and Pari Passu Notes required to be purchased pursuant to this Section 3.5 (the “Asset Disposition Offer Amount”) or, if less than the Asset Disposition Offer Amount has been so validly tendered, all Securities and Pari Passu Notes validly tendered in response to the Asset Disposition Offer.

          If the Asset Disposition Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest will be paid to the Person in whose name a Security is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Securities pursuant to the Asset Disposition Offer.

          On or before the Asset Disposition Purchase Date, the Company will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Asset Disposition Offer Amount of Securities and Pari Passu Notes or portions of Securities and Pari Passu Notes so validly tendered and not properly withdrawn pursuant to the Asset Disposition Offer, or if less than the Asset Disposition Offer Amount has been validly tendered and not properly withdrawn, all Securities and Pari Passu Notes so validly tendered and not properly withdrawn, in each case in integral multiples of $1,000. The Company will deliver to the Trustee an Officers’ Certificate stating that such Securities or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.5 and, in addition, the Company will deliver all certificates and securities required, if any, by the agreements governing the Pari Passu Notes. The Company or the Paying Agent, as the case may be, will promptly (but in any case not later than five Business Days after the Asset Disposition Purchase Date) mail or

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deliver to each tendering Holder of Securities or holder or lender of Pari Passu Notes, as the case may be, an amount equal to the purchase price of the Securities or Pari Passu Notes so validly tendered and not properly withdrawn by such holder or lender, as the case may be, and accepted by the Company for purchase, and the Company will promptly issue a new Security, and the Trustee, upon delivery of an Officers’ Certificate from the Company, will authenticate and mail or deliver such new Security to such Holder, in a principal amount equal to any unpurchased portion of the Security surrendered; provided that each such new Security will be in a principal amount of $1,000 or an integral multiple of $1,000. In addition, the Company will take any and all other actions required by the agreements governing the Pari Passu Notes. Any Security not so accepted will be promptly mailed or delivered by the Company to the Holder thereof. The Company will publicly announce the results of the Asset Disposition Offer on the Asset Disposition Purchase Date.

          For the purposes of clause (2) of this Section 3.5, the following will be deemed to be cash:

(1)

any liabilities as shown on the most recent consolidated balance sheet of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Securities) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability; and

(2)

any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash, to the extent of the cash received in that conversion, with 90 days following the closing of such Asset Disposition.

          The Company will comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws or regulations in connection with the repurchase of Securities pursuant to this Indenture. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 3.5, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Indenture by virtue of any conflict.

          SECTION 3.6. Limitation on Liens. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer to exist any Lien (other than Permitted Liens) upon any of its property or assets (including Capital Stock of Restricted Subsidiaries), whether owned on the Issue Date or acquired after that date, which Lien is securing any Indebtedness, unless contemporaneously with the Incurrence of such Liens effective provision is made to secure the Indebtedness due under this Indenture and the Securities or, in respect of Liens on any Restricted Subsidiary’s property or assets, any Subsidiary Guarantee of such Restricted Subsidiary, equally and ratably with (or senior in priority to in the case of Liens with respect to Subordinated Obligations or Guarantor Subordinated Obligations, as the case may be) the Indebtedness secured by such Lien for so long as such Indebtedness is so secured. In addition, if the Company or any Subsidiary Guarantor, directly or indirectly, shall

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create, Incur or suffer to exist any Lien (other than Permitted Liens) securing any Credit Agreement Obligations, the Company or such Subsidiary Guarantor, as the case may be, must concurrently grant at least a second-priority Lien upon such property as security for the Securities.

          SECTION 3.7. Limitation on Sale/Leaseback Transaction. The Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any Sale/Leaseback Transaction unless:

(1)	the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Sale/Leaseback Transaction at least equal to the fair market value (as evidenced by a resolution of the Board of Directors of the Company) of the property subject to such transaction;
(2)	the Company or such Restricted Subsidiary could have Incurred Indebtedness in an amount equal to the Attributable Indebtedness in respect of such Sale/Leaseback Transaction pursuant to Section 3.2;
(3)	the Company or such Restricted Subsidiary would be permitted to create a Lien on the property subject to such Sale/Leaseback Transaction without securing the Securities under Section 3.6; and
(4)	the Sale/Leaseback Transaction is treated as an Asset Disposition and all of the conditions of this Indenture described under Section 3.5 (including the provisions concerning the application of Net Available Cash) are satisfied with respect to such Sale/Leaseback Transaction, treating all of the consideration received in such Sale/Leaseback Transaction as Net Available Cash for purposes of such covenant.

          SECTION 3.8. Limitation on Affiliate Transactions. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or conduct any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of the Company (an “Affiliate Transaction”) unless:

(1)

the terms of such Affiliate Transaction are no less favorable to the Company or such Restricted Subsidiary, as the case may be, than those that could be obtained in a comparable transaction at the time of such transaction in arm’s-length dealings with a Person who is not such an Affiliate;

(2)

in the event such Affiliate Transaction involves an aggregate consideration in excess of $5.0 million, the terms of such transaction have been approved by a majority of the members of the Board of Directors of the Company and by a majority of the members of such Board having no personal stake in such transaction, if any (and such majority or majorities, as the case may be, determines that such Affiliate Transaction satisfies the criteria in clause (1) above); and

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(3) in the event such Affiliate Transaction involves an aggregate consideration in excess of $10.0 million, the Company has received a written opinion from an independent investment banking, accounting or appraisal firm of nationally recognized standing that such Affiliate Transaction is not materially less favorable than those that might reasonably have been obtained in a comparable transaction at such time on an arm’s-length basis from a Person that is not an Affiliate.

The preceding paragraph will not apply to:

(1)	any Restricted Payment (other than a Restricted Investment) permitted to be made pursuant to Section 3.3;
(2)	any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements and other compensation arrangements, options to purchase Capital Stock of the Company restricted stock plans, long-term incentive plans, stock appreciation rights plans, participation plans or similar employee benefits plans, pension plans or similar plans and/or indemnity provided on behalf of directors, officers and employees approved by the Board of Directors of the Company;
(3)	loans or advances to employees, officers or directors of the Company or any Restricted Subsidiary of the Company in the ordinary course of business consistent with past practices, in an aggregate amount outstanding at any time not in excess of $2.5 million (without giving effect to the forgiveness of any such loan);
(4)	any transaction between the Company and a Restricted Subsidiary or between Restricted Subsidiaries and any Guarantees issued by the Company or a Restricted Subsidiary for the benefit of the Company or a Restricted Subsidiary, as the case may be, in accordance with Section 3.2;
(5)	the payment of reasonable and customary fees paid to, and indemnity provided on behalf of, directors of the Company or any Restricted Subsidiary;
(6)	the existence of, and the performance of obligations of the Company or any of its Restricted Subsidiaries under the terms of any agreement to which the Company or any of its Restricted Subsidiaries is a party as of or on the Issue Date, as these agreements may be amended, modified, supplemented, extended or renewed from time to time; provided, however, that any future amendment, modification, supplement, extension or renewal entered into after the Issue Date will be permitted to the extent that its terms are not more disadvantageous to the Holders of the Securities than the terms of the agreements in effect on the Issue Date;

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(7)

transactions with customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of the business of the Company and its Restricted Subsidiaries and otherwise in compliance with the terms of this Indenture; provided that in the reasonable determination of the members of the Board of Directors or senior management of the Company, such transactions are on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and

(8)

any issuance or sale of Capital Stock (other than Disqualified Stock) to Affiliates of the Company and the granting of registration and other customary rights in connection therewith.

          SECTION 3.9. Limitation on Sale of Capital Stock of Restricted Subsidiaries. The Company will not, and will not permit any Restricted Subsidiary to, transfer, convey, sell, lease or otherwise dispose of any Voting Stock of any Restricted Subsidiary or to issue any of the Voting Stock of a Restricted Subsidiary (other than, if necessary, shares of its Voting Stock constituting directors’ qualifying shares) to any Person except:

(1)

to the Company or a Wholly-Owned Subsidiary; or

(2)

in compliance with Section 3.5 and immediately after giving effect to such issuance or sale, such Restricted Subsidiary either continues to be a Restricted Subsidiary or if such Restricted Subsidiary would no longer be a Restricted Subsidiary, then the Investment of the Company in such Person (after giving effect to such issuance or sale) would have been permitted to be made under Section 3.3 as if made on the date of such issuance or sale.

          Notwithstanding the preceding paragraph, the Company and any Restricted Subsidiary may sell all the Voting Stock of a Restricted Subsidiary as long as the Company and its Restricted Subsidiaries comply with the terms of Section 3.5.

          SECTION 3.10. Limitation on Lines of Business. The Company will not, and will not permit any Restricted Subsidiary to, engage in any business other than a Related Business.

          SECTION 3.11. Change of Control. If a Change of Control occurs, each Holder shall have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount of the Securities plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

          Within 30 days following any Change of Control, the Company shall mail a notice (the “Change of Control Offer”) to each Holder, with a copy to the Trustee, stating:

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(1)	that a Change of Control has occurred and that such Holder has the right to require the Company to purchase such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount of such Securities plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on a record date to receive interest on the relevant interest payment date) (the “Change of Control Payment”);
(2)	the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed) (the “Change of Control Payment Date”); and
(3)	the procedures determined by the Company, consistent with this Indenture, that a Holder must follow in order to have its Securities repurchased.

          On the Change of Control Payment Date, the Company shall, to the extent lawful:

(1)	accept for payment all Securities or portions of Securities (in integral multiples of $1,000) properly tendered pursuant to the Change of Control Offer;
(2)	deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Securities or portions of Securities so tendered; and
(3)	deliver or cause to be delivered to the Trustee the Securities so accepted together with an Officers’ Certificate stating the aggregate principal amount of Securities or portions of Securities being purchased by the Company.

          The Paying Agent shall promptly mail to each Holder of Securities so tendered the Change of Control Payment for such Securities, and the Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Security equal in principal amount to any unpurchased portion of the Securities surrendered, if any; provided that each such new Security shall be in a principal amount of $1,000 or an integral multiple thereof.

          If the Change of Control Payment Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest, if any, will be paid to the Person in whose name a Security is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender pursuant to the Change of Control Offer.

          The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

          The Company will not be required to make a Change of Control Offer upon a Change of Control if (i) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to

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a Change of Control Offer made by the Company and purchases all Securities validly tendered and not withdrawn under such Change of Control Offer or (ii) a notice of redemption has been given pursuant to Article V of this Indenture, unless and until there is a default in payment of the applicable redemption price.

          The Company shall comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws or regulations thereunder in connection with the repurchase of Securities pursuant to this Section 3.11. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue of the conflict.

          SECTION 3.12. SEC Reports. Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, to the extent permitted by the Exchange Act, the Company will file with the SEC, and make available to the Trustee and the registered Holders of the Securities:

(1)

all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were required to file such Forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by the Company’s certified independent accountants; and

(2)

all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports.

          In the event that the Company is not permitted to file such reports, documents and information with the SEC pursuant to the Exchange Act, the Company will nevertheless make available such Exchange Act information to the Trustee and the Holders of the Securities as if the Company were subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act within 15 days of the time periods specified therein or in the relevant Forms; provided that the Company shall not be required to furnish any information, certifications or reports required by Items 307 or 308 of Regulation S-K prior to the commencement of the Exchange Offer or the effectiveness of the Shelf Registration Statement.

          If the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes to the financial statements and in Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the financial condition and results of operations of the Company and its Restricted Subsidiaries.

          In addition, the Company and the Guarantors have agreed that they will make available to the Holders and to prospective investors, upon the request of such Holders, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so

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long as the Securities are not freely transferable under the Securities Act. For purposes of this Section 3.12, the Company and the Note Guarantors will be deemed to have furnished the reports to the Trustee and the Holders of Securities as required by this Section 3.12 if it has filed such reports with the SEC via the EDGAR filing system and such reports are publicly available.

          The filing requirements set forth above for the applicable period shall be deemed satisfied by the Company prior to the commencement of the Exchange Offer or the effectiveness of the Shelf Registration Statement by the filing with the SEC of the exchange offer registration statement and/or Shelf Registration Statement, and any amendments thereto, with such financial information that satisfies Regulation S-X of the Securities Act; provided that this paragraph shall not supersede or in any manner suspend or delay the Company’s reporting obligations set forth in the first three paragraphs of this Section 3.12.

          The Parent may satisfy the obligations of the Company set forth above; provided that (x) the financial information filed with the SEC or delivered to Holders pursuant to this covenant should include consolidating financial statements for the Parent, the Company, the Subsidiary Guarantors and the Subsidiaries that are not Subsidiary Guarantors in the form prescribed by the SEC and (y) the Parent is not engaged in any business in any material respect other than incidental to its ownership, directly or indirectly, of the Company.

          SECTION 3.13. Future Subsidiary Guarantors. The Company will cause each Restricted Subsidiary that Guarantees, on the Issue Date or any time thereafter, any Indebtedness of the Company or any Subsidiary Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which such Restricted Subsidiary will unconditionally Guarantee, on a joint and several basis, the full and prompt payment of the principal of, premium, if any, and interest (including Additional Interest, if any) in respect of the Securities on a senior secured basis and all other obligations under this Indenture. Each Restricted Subsidiary that becomes a Subsidiary Guarantor after the Issue Date will also become a party to the Collateral Documents and the Intercreditor Agreement and will take such actions as are necessary or advisable to grant to the Collateral Agent for the benefit of the Trustee, the Collateral Agent and the holders of the Securities a perfected and at least second-priority security interest in any Collateral held by such Restricted Subsidiary, subject to Permitted Liens. Notwithstanding the foregoing, in the event (a) a Subsidiary Guarantor is released and discharged in full from all of its obligations under its Guarantee of (1) Indebtedness under the Senior Secured Credit Agreement and (2) all other Indebtedness of the Company and its Restricted Subsidiaries, including a Guarantee under the indenture governing the Private Placement Notes, and (b) such Subsidiary Guarantor has not Incurred any Indebtedness in reliance on its status as a Subsidiary Guarantor under Section 3.2 or such Subsidiary Guarantor’s obligations under such Indebtedness are satisfied in full and discharged or are otherwise permitted to be Incurred by a Restricted Subsidiary (other than a Subsidiary Guarantor) under the second paragraph of Section 3.2, then the Subsidiary Guarantee and the obligations of such Subsidiary Guarantor under the Collateral Documents and Intercreditor Agreement of such Subsidiary Guarantor shall be automatically and unconditionally released or discharged.

          SECTION 3.14. Maintenance of Office or Agency. The Company shall maintain an office or agency where the Securities may be presented or surrendered for payment, where, if applicable, the Securities may be surrendered for registration of transfer or exchange

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and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The agency of The Bank of New York Trust Company, N.A. (the “Agent”), currently located at 101 Barclay Street, New York, NY 10286, Attention: Corporation Trust Administration (or at such address in the Borough of Manhattan, The City of New York as the Agent shall designate upon request therefor from the Company or any Holder), shall be such office or agency of the Company, unless the Company shall designate and maintain some other office or agency for one or more of such purposes. The Company shall give prompt written notice to the Trustee of any change in the location of any such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Agent of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

          The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation. The Company shall give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such other office or agency.

          SECTION 3.15. Corporate Existence. Except as otherwise provided in Article III, Article IV and Section 10.2(b), the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate, partnership, limited liability company or other existence of each Subsidiary Guarantor, if any, in accordance with their respective organizational documents (as the same may be amended from time to time) and the rights (charter and statutory) licenses and franchises of the Company and each such Subsidiary Guarantor; provided, however, that the Company shall not be required to preserve any such right, license or franchise or the corporate, partnership, limited liability company or other existence of any Subsidiary Guarantor if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and each of its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not, and will not be, disadvantageous in any material respect to the Holders; provided, further, that the foregoing shall not prohibit a sale, transfer, or conveyance of a Restricted Subsidiary or any of its assets in compliance with the terms of this Indenture.

          SECTION 3.16. Payment of Taxes and Other Claims. The Company shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all material taxes, assessments and governmental charges levied or imposed upon the Company or any Restricted Subsidiary or upon the income, profits or property of the Company or any Restricted Subsidiary and (ii) all lawful claims for labor, materials and supplies, which, if unpaid, might by law become a material liability or lien upon the property of the Company or any Restricted Subsidiary; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim the amount, applicability or validity of which is being contested in good faith by appropriate actions and for which appropriate reserves, if necessary (in the good faith judgment of management of the Company), are being maintained in accordance with GAAP or where the failure to effect such payment will not be disadvantageous to the Holders.

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          SECTION 3.17. Payments for Consent. Neither the Company nor any of its Restricted Subsidiaries will, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fees or otherwise, to any Holder of any Securities for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Securities unless such consideration is offered to be paid or is paid to all Holders of the Securities that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or amendment.

          SECTION 3.18. Compliance Certificate. The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company an Officers’ Certificate stating that in the course of the performance by the signers of their duties as Officers of the Company they would normally have knowledge of any Default or Event of Default and whether or not the signers know of any Default or Event of Default that occurred during the previous fiscal year. If they do, the certificate shall describe the Default or Event of Default, its status and the action the Company is taking or proposes to take with respect thereto. The Company also shall comply with TIA § 314(a)(4).

          SECTION 3.19. Further Instruments and Acts. Upon request of the Trustee or as necessary to comply with any future developments or requirements, the Company shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture with respect to such future developments or requirements.

          SECTION 3.20. Statement by Officers as to Default. The Company shall deliver to the Trustee, as soon as possible and in any event within 30 days after the occurrence of any Event of Default or an event which, with notice or the lapse of time or both, would constitute an Event of Default, an Officers’ Certificate setting forth the details of such Event of Default or Default, its status and the actions which the Company is taking or proposes to take with respect thereto.

ARTICLE IV
SUCCESSOR COMPANY

          SECTION 4.1. Merger and Consolidation. The Company will not consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person, unless:

(1) the resulting, surviving or transferee Person (the “Successor Company”) will be a corporation organized and existing under the laws of the United States of America, any State of the United States or the District of Columbia and the Successor Company (if not the Company) will expressly assume, by supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the Securities and this Indenture and will expressly assume, by written agreement all the obligations of the Company under the Registration Rights Agreement, the Collateral Documents and the Intercreditor Agreement and the Successor Company shall cause such amendments, supplements or other instruments to be executed, filed, and

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	recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral pledged by or transferred to such Person, together with such financing statements or comparable documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions, in each case in a form reasonably satisfactory to the Trustee;
(2)	immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Company or any Subsidiary of the Successor Company as a result of such transaction as having been Incurred by the Successor Company or such Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing;
(3)	immediately after giving effect to such transaction, the Successor Company would (i) be able to Incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of Section 3.2 or (ii) have a Consolidated Coverage Ratio of not less than the Consolidated Coverage Ratio of the Company immediately prior to such transaction;
(4)	each Note Guarantor (unless it is the other party to the transactions above, in which case clause (1) shall apply) shall have by supplemental indenture confirmed that its Note Guarantee shall apply to such Person’s obligations in respect of this Indenture and the Securities and shall have by written agreement confirmed that its obligations under the Registration Rights Agreement, the Collateral Documents and the Intercreditor Agreement shall continue to be in effect and shall cause such amendments, supplements or other instruments to be executed, filed, and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral pledged by such Note Guarantor, together with such financing statements or comparable documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions, in each case in a form reasonably satisfactory to the Trustee; and
(5)	the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture, the Collateral Documents and the Intercreditor Agreement.

Notwithstanding the preceding clause (3), (x) any Restricted Subsidiary may consolidate with, merge into or transfer all or part of its properties and assets to the Company and (y) the Company may merge with an Affiliate incorporated solely for the purpose of reincorporating the Company

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in another jurisdiction; provided that, in the case of a Restricted Subsidiary that merges into the Company, the Company will not be required to comply with the preceding clause (5).

          Parent will not consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person, unless:

(1)	the resulting, surviving or transferee Person (the “Successor Parent”) will be a corporation organized and existing under the laws of the United States of America, any State of the United States or the District of Columbia, the Successor Parent (if not the Parent) will expressly assume, by supplemental indenture (and other applicable documents), executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Parent under its Note Guarantee, this Indenture, the Collateral Documents, the Intercreditor Agreement and the Registration Rights Agreement and the Successor Parent shall cause such amendments, supplements or other instruments to be executed, filed, and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral pledged by or transferred to such Person, together with such financing statements or comparable documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions, in each case in a form reasonably satisfactory to the Trustee;
(2)	immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Parent or any Subsidiary of the Successor Parent as a result of such transaction as having been Incurred by the Successor Parent or such Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; and
(3)	the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture, the Collateral Documents and the Intercreditor Agreement.

          For purposes of this Section 4.1, the sale, lease, conveyance, assignment, transfer, or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Company, which properties and assets, if held by the Parent or the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Parent or the Company on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Parent and the Company.

          The predecessor Company will be released from its obligations under this Indenture and the Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture, the Collateral Documents and the

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Intercreditor Agreement, but, in the case of a lease of all or substantially all its assets, the predecessor Company will not be released from the obligation to pay the principal of and interest on the Securities or any obligation under the Collateral Documents and the Intercreditor Agreement.

          In addition, the Company will not permit any Subsidiary Guarantor to consolidate with, merge with or into any Person (other than another Subsidiary Guarantor) and will not permit the conveyance, transfer or lease of all or substantially all of the assets of any Subsidiary Guarantor (other than to another Subsidiary Guarantor) unless:

(1)

(a) if such entity remains a Subsidiary Guarantor, the resulting, surviving or transferee Person will be a corporation, partnership, trust or limited liability company organized and existing under the laws of the United States of America, any State of the United States or the District of Columbia; (b) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the resulting, surviving or transferee Person or any Restricted Subsidiary as a result of such transaction as having been Incurred by such Person or such Restricted Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; (c) the resulting, surviving or transferee Person assumes all the obligations of such Subsidiary Guarantor pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee under the Securities, this Indenture, the Collateral Documents, the Intercreditor Agreement and the Registration Rights Agreement and shall cause such amendments, supplements or other instruments to be executed, filed and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral pledged by or transferred to the surviving entity, together with such financing statements or comparable documents as may be required to perfect any security interest in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions in each case in a form reasonably satisfactory to the Trustee; and (d) the Company will have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture; and

(2)

the transaction is made in compliance with Section 3.5 (it being understood that only such portion of the Net Available Cash as is required to be applied on the date of such transaction in accordance with the terms of this Indenture needs to be applied in accordance therewith at such time), Section 3.9 and this Section 4.1.

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ARTICLE V
REDEMPTION OF SECURITIES

          SECTION 5.1. Redemption. The Securities may be redeemed, as a whole or from time to time in part, subject to the conditions and at the redemption prices specified in paragraph 5 of the form of Securities set forth in Exhibit A and Exhibit B hereto, which are hereby incorporated by reference and made a part of this Indenture, together with accrued and unpaid interest, if any, to the Redemption Date.

          SECTION 5.2. Applicability of Article. Redemption of Securities at the election of the Company or otherwise, as permitted or required by any provision of this Indenture, shall be made in accordance with such provision and this Article.

          SECTION 5.3. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Securities pursuant to Section 5.1 shall be evidenced by a Board Resolution of the Company. In case of any redemption at the election of the Company, the Company shall, upon not later than the earlier of the date that is 45 days prior to the Redemption Date fixed by the Company or the date on which notice is given to the Holders (except as provided under Section 5.5 or unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities to be redeemed and shall deliver to the Trustee such documentation and records as shall enable the Trustee to select the Securities to be redeemed pursuant to Section 5.4. Any such notice may be cancelled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect.

          SECTION 5.4. Selection by Trustee of Securities to Be Redeemed. If less than all the Securities are to be redeemed at any time pursuant to an optional redemption, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the outstanding Securities not previously called for redemption, in compliance with the requirements of the principal national securities exchange, if any, on which such Securities are listed, or, if such Securities are not so listed, on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem fair and appropriate (and in such manner as complies with applicable legal requirements) and which may provide for the selection for redemption of portions of the principal of the Securities; provided, however, that no such partial redemption shall reduce the portion of the principal amount of a Security not redeemed to less than $1,000.

          The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the method it has chosen for the selection of Securities and the principal amount thereof to be redeemed.

          For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed.

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          SECTION 5.5. Notice of Redemption. Notice of redemption shall be given in the manner provided for under Section 12.2 not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed. At the Company’s request, the Trustee shall give notice of redemption in the Company’s name and at the Company’s expense; provided, however, that the Company shall deliver to the Trustee, at least 45 days prior to the Redemption Date, an Officers’ Certificate requesting that the Trustee give such notice at the Company’s expense and the form of notice that shall include the following items.

          All notices of redemption shall state:

     (1) the Redemption Date,

     (2) the redemption price and the amount of accrued interest to the Redemption Date payable as provided under Section 5.7, if any,

     (3) if less than all outstanding Securities are to be redeemed, the identification of the particular Securities (or portion thereof) to be redeemed, as well as the aggregate principal amount of Securities to be redeemed and the aggregate principal amount of Securities to be outstanding after such partial redemption,

     (4) in case any Security is to be redeemed in part only, the notice which relates to such Security shall state that on and after the Redemption Date, upon surrender of such Security, the Holder will receive, without charge, a new Security or Securities of authorized denominations for the principal amount thereof remaining unredeemed,

     (5) that on the Redemption Date the redemption price (and accrued interest, if any, to the Redemption Date payable as provided under Section 5.7) will become due and payable upon each such Security, or the portion thereof, to be redeemed, and, unless the Company defaults in making the redemption payment, that interest on Securities called for redemption (or the portion thereof) will cease to accrue on and after said date,

     (6) the place or places where such Securities are to be surrendered for payment of the redemption price and accrued interest, if any,

     (7) the name and address of the Paying Agent,

     (8) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price,

     (9) the CUSIP, Common Code and ISIN numbers, if applicable, and that no representation is made as to the accuracy or correctness of the CUSIP, Common Code and ISIN numbers, if applicable, if any, listed in such notice or printed on the Securities, and

     (10) the paragraph of the Securities pursuant to which the Securities are to be redeemed.

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          SECTION 5.6. Deposit of Redemption Price. Prior to 10:00 a.m., New York City time, on any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company or any of the Company’s Subsidiaries is acting as its own Paying Agent, segregate and hold in trust as provided under Section 2.4) an amount of money sufficient to pay the redemption price of, and accrued interest on, all the Securities which are to be redeemed on that date, other than Securities or portions of Securities called for redemption that are beneficially owned by the Company and have been delivered by the Company to the Trustee for cancellation.

          SECTION 5.7. Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Securities or portions of Securities so to be redeemed shall, on the Redemption Date, become due and payable at the redemption price therein specified (together with accrued interest, if any, to the Redemption Date), and on and after such date (unless the Company shall default in the payment of the redemption price and accrued interest) such Securities shall cease to bear interest and the only right of the Holders thereof will be to receive payment of the redemption price and, subject to the next sentence, unpaid interest on such Securities to the Redemption Date. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the redemption price, together with accrued interest, if any, to the Redemption Date (subject to the rights of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

          If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the unpaid principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate borne by the Securities.

          SECTION 5.8. Securities Redeemed in Part. Any Security which is to be redeemed only in part (pursuant to the provisions of this Article) shall be surrendered at the office or agency of the Company maintained for such purpose pursuant to Section 3.14 (with, if the Company or the Trustee so require, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by the Holder thereof or such Holder’s attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Security at the expense of the Company, a new Security or Securities, of any authorized denomination as requested by such Holder, in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered, provided, that each such new Security will be in a principal amount of $1,000 or an integral multiple thereof.

ARTICLE VI
DEFAULTS AND REMEDIES

          SECTION 6.1. Events of Default. Each of the following is an event of default (an “Event of Default”):

(1) default in any payment of interest or additional interest (as required by the Registration Rights Agreement) on any Security when due, continued for 30 days;

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(2)	default in the payment of principal of or premium, if any, on any Security when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;
(3)	failure by the Company or any Note Guarantor to comply with its obligations under Section 4.1;
(4)	failure by the Company or any Note Guarantor to comply for 30 days after notice as provided below with (a) any of its obligations under Article III (in each case, other than a failure to purchase Securities that will constitute an Event of Default under clause (2) above and other than a failure to comply with Section 4.1, which will constitute an Event of Default under clause 3 of this section) or (b) any of its agreements contained in the Collateral Documents or Intercreditor Agreement;
(5)	failure by the Company or any Note Guarantor to comply for 60 days after notice as provided below with its other agreements contained in this Indenture;
(6)	default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), other than Indebtedness owed to the Company or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists, or is created after the Issue Date, which default:

(a)	is caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness (“payment default”); or
(b)	results in the acceleration of such Indebtedness prior to its maturity (the “cross acceleration provision”);

	and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates $15.0 million or more;
(7)	(a) the Company or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:

(i) commences a voluntary case or proceeding;

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(ii)	consents to the entry of judgment, decree or order for relief against it in an involuntary case or proceeding;
(iii)	consents to the appointment of a Custodian of it or for any substantial part of its property;
(iv)	makes a general assignment for the benefit of its creditors;
(v)	consents to or acquiesces in the institution of a bankruptcy or an insolvency proceeding against it;
(vi)	takes any corporate action to authorize or effect any of the foregoing;
(vii)	takes any comparable action under any foreign laws relating to insolvency; or

(b) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i)	is for relief in an involuntary case against the Company or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law;
(ii)	appoints a Custodian for all or substantially all of the property of the Company or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law; or
(iii)	orders the winding up or liquidation of the Company or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law; and
(iv)	in each case the order, decree or relief remains unstayed and in effect for 60 days;

(8) failure by the Company or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited

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	consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary to pay final judgments aggregating in excess of $15.0 million (net of any amounts that a reputable and creditworthy insurance company has acknowledged liability for in writing), which judgments are not paid, discharged or stayed for a period of 60 days (the “judgment default provision”);
(9)	any Subsidiary Guarantee, Collateral Document or obligation under the Intercreditor Agreement of a Significant Subsidiary or group of Restricted Subsidiaries that taken together as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries would constitute a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms of this Indenture) or is declared null and void in a judicial proceeding or any Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary Guarantors that taken together as of the latest audited consolidated financial statements of the Company and its Restricted Subsidiaries would constitute a Significant Subsidiary denies or disaffirms its obligations under this Indenture, its Subsidiary Guarantee, any Collateral Document or the Intercreditor Agreement; or
(10)	with respect to any Collateral having a fair market value in excess of $15.0 million, individually or in the aggregate, (A) the security interest under the Collateral Documents, at any time, ceases to be in full force and effect for any reason other than in accordance with their terms and the terms of this Indenture and other than the satisfaction in full of all obligations under this Indenture and discharge of this Indenture, (B) any security interest created thereunder or under this Indenture is declared invalid or unenforceable or (C) the Company or any Note Guarantor asserts, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable.

However, a default under clauses (4) and (5) of this paragraph will not constitute an Event of Default until the Trustee or the Holders of 25% in principal amount of the outstanding Securities notify the Company of the default and the Company does not cure such default within the time specified in clauses (4) and (5) of this paragraph after receipt of such notice.

          The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

          SECTION 6.2. Acceleration. If an Event of Default (other than an Event of Default described in clause (7) of Section 6.1) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the outstanding Securities by notice to the Company and the Trustee, may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued and unpaid interest, if any, on all the

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Securities to be due and payable. Upon such a declaration, such principal, premium and accrued and unpaid interest will be due and payable immediately.

          In the event of a declaration of acceleration of the Securities because an Event of Default described in clause (6) of Section 6.1 has occurred and is continuing, the declaration of acceleration of the Securities shall be automatically annulled if the default triggering such Event of Default pursuant to clause (6) of Section 6.1 shall be remedied or cured by the Company or a Restricted Subsidiary or waived by the Holders of the relevant Indebtedness within 20 days after the declaration of acceleration with respect thereto and if (1) the annulment of the acceleration of the Securities would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, except nonpayment of principal, premium or interest on the Securities that became due solely because of the acceleration of the Securities, have been cured or waived.

          If an Event of Default described in clause (7) of Section 6.1 occurs and is continuing, the principal of, premium, if any, and accrued and unpaid interest on all the Securities will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

          SECTION 6.3. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of (or premium, if any) or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture.

          The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative.

          SECTION 6.4. Waiver of Past Defaults. The Holders of a majority in principal amount of the outstanding Securities by notice to the Trustee may (a) waive, by their consent (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities), an existing Default or Event of Default and its consequences, except a Default or Event of Default in the payment of the principal of, or premium, if any, or interest on a Security, and (b) rescind any such acceleration with respect to the Securities and its consequences if (1) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, other than the nonpayment of the principal of, premium, if any, and interest on the Securities that have become due solely by such declaration of acceleration, have been cured or waived. When a Default or Event of Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any consequent right.

          SECTION 6.5. Control by Majority. The Holders of a majority in principal amount of the outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or the Collateral Agent or of exercising any trust or power conferred on the Trustee or the Collateral Agent. However, the Trustee may

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refuse to follow any direction that conflicts with law or this Indenture, the Collateral Documents or the Intercreditor Agreement or, subject to Sections 7.1 and 7.2, that the Trustee determines is unduly prejudicial to the rights of any other Holder or would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

          SECTION 6.6. Limitation on Suits. Subject to the provisions of this Indenture relating to the duties of the Trustee or the Collateral Agent, if an Event of Default occurs and is continuing, the Trustee or the Collateral Agent will be under no obligation to exercise any of the rights or powers under this Indenture or the Collateral Documents at the request or direction of any of the Holders unless such Holders have offered to the Trustee or the Collateral Agent reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium, if any, or interest when due, no Holder may pursue any remedy with respect to this Indenture or the Securities unless:

(1)	such Holder has previously given the Trustee written notice that an Event of Default is continuing;
(2)	Holders of at least 25% in principal amount of the outstanding Securities have made a written request to the Trustee to pursue the remedy;
(3)	such Holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense;
(4)	the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity; and
(5)	the Holders of a majority in principal amount of the outstanding Securities have not given the Trustee a direction that, in the opinion of the Trustee, is inconsistent with such request within such 60-day period.

          A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.

          SECTION 6.7. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture (including Section 6.6), the right of any Holder to receive payment of principal of, premium, if any, or interest on the Securities held by such Holder, on or after the respective due dates expressed in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

          SECTION 6.8. Collection Suit by Trustee. If an Event of Default specified in clauses (1) or (2) of Section 6.1 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for under Section 7.7.

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          SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company, its Subsidiaries or its or their respective creditors or properties and, unless prohibited by law or applicable regulations, may be entitled and empowered to participate as a member of any official committee of creditors appointed in such matter and may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.7.

          SECTION 6.10. Priorities. If the Trustee collects any money or property pursuant to this Article VI, it shall pay out the money or property in the following order:

     FIRST: to the Trustee and Collateral Agent for amounts due under Section 7.7 and to the Collateral Agent for any other amounts due under the Collateral Documents;

     SECOND: to Holders for amounts due and unpaid on the Securities for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and

     THIRD: to the Company or to whomever may be lawfully entitled to receive the same.

          The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10.

          SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in outstanding principal amount of the Securities.

ARTICLE VII
TRUSTEE

          SECTION 7.1. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee will exercise the rights and powers vested in it by this Indenture and

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use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.

          (b) Except during the continuance of an Event of Default:

     (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

     (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates, opinions or orders furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

          (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

     (1) this paragraph does not limit the effect of paragraph (b) of this Section 7.1;

     (2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

     (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.5.

          (d) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.

          (e) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

          (f) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

          (g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.1 and to the provisions of the TIA.

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          (h) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company.

          (i) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee indemnity or security reasonably satisfactory to it against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities that might be incurred by it in compliance with such request or direction.

          SECTION 7.2. Rights of Trustee. Subject to Section 7.1:

          (a) The Trustee may conclusively rely on any document (whether in its original or facsimile form) reasonably believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. The Trustee shall receive and retain financial reports and statements of the Company as provided herein, but shall have no duty to review or analyze such reports or statements to determine compliance under covenants or other obligations of the Company.

          (b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate and/or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officers’ Certificate or Opinion of Counsel.

          (c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

          (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers, unless the Trustee’s conduct constitutes willful misconduct or negligence.

          (e) The Trustee may consult with counsel of its selection, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

          (f) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the corporate trust office of the Trustee specified under Section 12.2, and such notice references the Securities and this Indenture.

          (g) In the event the Trustee receives inconsistent or conflicting requests and indemnity from two or more groups of Holders of Securities , each representing less than a majority in aggregate principal amount of the Securities outstanding, pursuant to the provisions of this Indenture, the Trustee, in its sole discretion, may determine what action, if any, will be taken.

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          (h) The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder.

          (i) The Trustee shall not be deemed to have knowledge of any fact or matter unless such fact or matter is known to a Trust Officer of the Trustee.

          (j) Whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may request, and in the absence of bad faith or willful misconduct on its part, rely upon an Officers’ Certificate and an Opinion of Counsel.

          (k) The Trustee may request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person specified as so authorized in any such certificate previously delivered and not superseded.

          (l) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

          SECTION 7.3. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company, the Subsidiary Guarantors or their Affiliates with the same rights it would have if it were not Trustee. However, the Trustee must comply with Sections 7.10 and 7.11. In addition, the Trustee shall be permitted to engage in transactions with the Company; provided, however, that if the Trustee acquires any conflicting interest, as defined in TIA § 310(b), the Trustee must (i) eliminate such conflict within 90 days of acquiring such conflicting interest, (ii) apply to the SEC for permission to continue acting as Trustee or (iii) resign. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with like rights.

          SECTION 7.4. Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Securities, shall not be accountable for the Company’s use of the proceeds from the sale of the Securities, shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee or any money paid to the Company pursuant to the terms of this Indenture and shall not be responsible for any statement of the Company in this Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee’s certificate of authentication.

          SECTION 7.5. Notice of Defaults. If a Default occurs and is continuing and is known to the Trustee, the Trustee must mail to each Holder notice of the Default within 90 days after it occurs. Except in the case of a Default in the payment of principal of, premium, if any, or interest on any Security, the Trustee may withhold notice if and so long as a committee of Trust

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Officers of the Trustee in good faith determines that withholding notice is in the interests of the Holders.

          SECTION 7.6. Reports by Trustee to Holders. As promptly as practicable after each June 1 following the date of this Indenture beginning June 1, 2006, and in any event prior to July 1 in each year, the Trustee shall mail to each Holder a brief report dated as of such mail date that complies with TIA § 313(a) if and to the extent required thereby. The Trustee also shall comply with TIA § 313(b) and TIA § 313(c).

          A copy of each report at the time of its mailing to Holders shall be filed with the SEC and each stock exchange (if any) on which the Securities are listed. The Company agrees to notify promptly the Trustee whenever the Securities become listed on any stock exchange and of any delisting thereof and the Trustee shall comply with TIA § 313(d).

          SECTION 7.7. Compensation and Indemnity. The Company and each Subsidiary Guarantor, if any, shall be jointly and severally liable for paying to each of the Trustee and Collateral Agent from time to time reasonable compensation for the Trustee’s acceptance of this Indenture and services hereunder and the Collateral Agent’s acceptance of the Collateral Documents and services thereunder, respectively, as the Company and the Trustee or the Collateral Agent, respectively, shall from time to time agree in writing. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company and each Subsidiary Guarantor, if any, shall be jointly and severally liable for reimbursing the Trustee and the Collateral Agent upon request for all reasonable out-of-pocket expenses incurred or made by each of them, including costs of collection, costs of preparing and reviewing reports, certificates and other documents, costs of preparation and mailing of notices to Holders and reasonable fees and expenses of counsel retained by the Trustee or the Collateral Agent, as applicable, in addition to the compensation for each agent’s services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s or Collateral Agent’s (as applicable) agents, counsel, accountants and experts.

          The Company and each Subsidiary Guarantor (if any), jointly and severally, shall indemnify the Trustee against any and all loss, liability, damages, claims or expense (including reasonable attorneys’ fees and expenses) incurred by it without negligence, bad faith or willful misconduct on its part in connection with the administration of this trust and the performance of its duties hereunder, including the costs and expenses of enforcing this Indenture (including this Section 7.7) and of defending itself against any claims (whether asserted by any Holder, the Company or otherwise) or liability in connection with the exercise or performance of any of its powers or duties hereunder. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company or any Subsidiary Guarantor of its obligations hereunder, except to the extent that they were prejudiced by such failure to notify. The Company shall defend the claim and the Trustee shall provide reasonable cooperation at the Company’s expense in the defense. The Trustee may have separate counsel and the Company and the Subsidiary Guarantors, if any, shall pay the fees and expenses of such counsel; provided that the Company shall not be required to pay such fees and expenses if they assume the Trustee’s defense, and, in the reasonable judgment of outside counsel to the Trustee, there is no conflict of interest between the Company and the Trustee in connection with such defense. Notwithstanding the foregoing, the Company and the

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Subsidiary Guarantors, if any, need not reimburse any expense or indemnify against any loss, liability or expense which is finally determined by a court of competent jurisdiction to have been caused by the Trustee’s own willful misconduct, negligence or bad faith.

          To secure the Company’s and the Subsidiary Guarantors’ payment obligations in this Section 7.7, each of the Trustee and the Collateral Agent shall have a lien prior to the Securities on all money or property held or collected by the Trustee or Collateral Agent other than money or property held in trust to pay principal of and interest on particular Securities. Such lien shall survive the satisfaction and discharge of this Indenture. Each of the Trustee’s and Collateral Agent’s rights to receive payment of any amounts due under this Section 7.7 shall not be subordinate to any other liability or Indebtedness of the Company or the Subsidiary Guarantors (if any).

          The Company’s and the Subsidiary Guarantors’ payment obligations pursuant to this Section 7.7 shall survive the discharge of this Indenture. When the Trustee or Collateral Agent incurs expenses after the occurrence of a Default specified in clause (7) of Section 6.1 with respect to the Company, the expenses are intended to constitute expenses of administration under any Bankruptcy Law.

          SECTION 7.8. Replacement of Trustee. The Trustee may resign at any time by so notifying the Company in writing. The Holders of a majority in principal amount of the Securities may remove the Trustee by so notifying the removed Trustee in writing and may appoint a successor Trustee with the Company’s written consent, which consent will not be unreasonably withheld. The Company shall remove the Trustee if:

(1)	the Trustee fails to comply with Section 7.10;
(2)	the Trustee is adjudged bankrupt or insolvent;
(3)	a receiver or other public officer takes charge of the Trustee or its property; or
(4)	the Trustee otherwise becomes incapable of acting as trustee hereunder.

          If the Trustee resigns or is removed by the Company or by the Holders of a majority in principal amount of the Securities and such Holders do not reasonably promptly appoint a successor Trustee as described in the preceding paragraph, or if a vacancy exists in the office of the Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee.

          A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee, upon payment of its charges hereunder, shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for under Section 7.7.

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          If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of at least 10% in principal amount of the Securities may petition, at the Company’s expense, any court of competent jurisdiction for the appointment of a successor Trustee.

          If the Trustee fails to comply with Section 7.10, unless the Trustee’s duty to resign is stayed as provided in TIA § 310(b), any Holder, who has been a bona fide holder of a Security for at least six months, may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

          Notwithstanding the replacement of the Trustee pursuant to this Section 7.8, the Company’s obligations under Section 7.7 shall continue for the benefit of the retiring Trustee.

          SECTION 7.9. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.

          In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture, any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; provided that the right to adopt the certificate of authentication of any predecessor Trustee or authenticate Securities in the name of any predecessor Trustee shall only apply to its successor or successors by merger, consolidation or conversion.

          SECTION 7.10. Eligibility; Disqualification. This Indenture shall always have a Trustee that satisfies the requirements of TIA § 310 in every respect. The Trustee shall have a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA § 310(b); provided, however, that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

          SECTION 7.11. Preferential Collection of Claims Against the Company. The Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.

          SECTION 7.12. Trustee’s Application for Instruction from the Company. Any application by the Trustee for written instructions from the Company may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be

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effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three Business Days after the date any officer of the Company actually receives such application, unless any such officer shall have consented in writing to any earlier date) unless prior to taking any such action (or the effective date in the case of an omission), the Trustee shall have received written instructions in response to such application specifying the action to be taken or omitted.

          SECTION 7.13. Paying Agents. The Company shall cause each Paying Agent other than the Trustee to execute and deliver to it and the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 7.13:

     (1) that it will hold all sums held by it as agent for the payment of principal of, or premium, if any, or interest on, the Securities (whether such sums have been paid to it by the Company or by any obligor on the Securities) in trust for the benefit of Holders of the Securities or the Trustee;

     (2) that it will at any time during the continuance of any Event of Default, upon written request from the Trustee, deliver to the Trustee all sums so held in trust by it together with a full accounting thereof; and

     (3) that it will give the Trustee written notice within three Business Days of any failure of the Company (or by any obligor on the Securities) in the payment of any installment of the principal of, premium, if any, or interest on, the Securities when the same shall be due and payable.

ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE

          SECTION 8.1. Discharge of Liability on Securities; Defeasance. (a) Subject to Section 8.1(c), when (i)(x) the Company delivers to the Trustee all outstanding Securities (other than Securities replaced pursuant to Section 2.9) for cancellation or (y) all outstanding Securities not theretofore delivered for cancellation have become due and payable, whether at maturity or upon redemption, or will become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption pursuant to Article V hereof and the Company or any Subsidiary Guarantor irrevocably deposits or causes to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders money in U.S. dollars, U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption; (ii) no Default or Event of Default shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit (other than a default resulting from borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing) and such deposit will not result in a breach or violation of, or constitute a default under, the Senior Secured Credit Agreement or any other material instrument to which the Company or any Significant Subsidiary is a party or by which the Company or any

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Significant Subsidiary is bound; (iii) the Company or any Subsidiary Guarantor has paid or caused to be paid all sums payable to the Trustee under this Indenture and the Securities; and (iv) the Company has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of such Securities at maturity or the Redemption Date, as the case may be, then upon demand of the Company (accompanied by an Officers’ Certificate and an Opinion of Counsel stating that all conditions precedent specified herein relating to the satisfaction and discharge of this Indenture have been complied with) this Indenture shall cease to be of further effect with respect to the Securities and the Trustee shall acknowledge satisfaction and discharge of this Indenture, at the cost and expense of the Company.

          (b) Subject to Sections 8.1(c) and 8.2, the Company and the Subsidiary Guarantors at any time may terminate (i) all their obligations under the Securities, this Indenture, the Collateral Documents and the Intercreditor Agreement, and cause the release of all Collateral under the Collateral Documents (“legal defeasance option”), and after giving effect to such legal defeasance, any omission to comply with such obligations shall no longer constitute a Default or Event of Default or (ii) their obligations under Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.17 and 4.1(3), and the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply with such covenants shall no longer constitute a Default or an Event of Default under Sections 6.1(3) (only with respect to Section 4.1(3)), 6.1(4) (only with respect to such covenants), 6.1(5) (only with respect to such covenants), 6.1(6), 6.1(7) (with respect only to Significant Subsidiaries), 6.1(8) or 6.1(10) and the events specified in such Sections shall no longer constitute an Event of Default (clause (ii) being referred to as the “covenant defeasance option”), but except as specified above, the remainder of this Indenture and the Securities shall be unaffected thereby. The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option.

          If the Company exercises its legal defeasance option, payment of the Securities may not be accelerated because of an Event of Default and the Subsidiary Guarantees in effect at such time shall terminate. If the Company exercises its covenant defeasance option, payment of the Securities may not be accelerated because of an Event of Default specified under Sections 6.1(3) (only with respect to Section 4.1(3)), 6.1(4) (only with respect to such covenants), 6.1(5) (only with respect to such covenants), 6.1(6), 6.1(7) (with respect only to Significant Subsidiaries) 6.1(8) or 6.1(10).

          Upon satisfaction of the conditions set forth herein and upon request of the Company, the Trustee shall acknowledge in writing the discharge of those obligations that the Company terminates.

          (c) Notwithstanding the provisions of Sections 8.1(a) and (b), the Company’s obligations under Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.9, 2.10, 2.11, 2.12, 3.1, 3.14, 3.15, 3.16, 3.18, 3.19, 3.20, 6.7, 7.7 and 7.8 and in this Article VIII shall survive until the Securities have been paid in full. After the Securities have been paid in full, the Company’s obligations under Sections 7.7, 8.5 and 8.6 shall survive such satisfaction and discharge or defeasance.

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          SECTION 8.2. Conditions to Defeasance. The Company may exercise its legal defeasance option or its covenant defeasance option only if:

(1)	the Company irrevocably deposits in trust with the Trustee for the benefit of the Holders money in U.S. dollars or U.S. Government Obligations or a combination thereof, the principal of and interest (without reinvestment) on which will be sufficient, or a combination thereof sufficient, for the payment of principal of, premium, if any, and interest on the Securities to maturity or redemption, as the case may be;
(2)	the Company delivers to the Trustee an Officers’ Certificate stating that the payments of principal and interest when due and without reinvestment of the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal and interest when due on all the Securities to maturity or redemption, as the case may be;
(3)	no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowings) or insofar as Events of Default specified in Section 6.1(7) are concerned, at any time in the period ending on the 91st day after such date of deposit;
(4)	such legal defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a Default under, this Indenture or any other material agreement or instrument to which the Company or any of its Significant Subsidiaries is a party or by which the Company or any of its Significant Subsidiaries is bound;
(5)	the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that (A) the Securities and (B) assuming no intervening bankruptcy of the Company between the date of deposit and the 91st day following the deposit and that no Holder of the Securities is an insider of the Company, after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally;
(6)	the Company delivers to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, and does not qualify as, a regulated investment company under the Investment Company Act of 1940;
(7)	in the case of the legal defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel (subject to customary assumptions and exclusions) in the United States stating that (i) the Company has received from, or there has been published by, the Internal

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	Revenue Service a ruling, or (ii) since the date of this Indenture there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and legal defeasance and will be subject to federal income tax on the same amount, in the same manner and at the same times as would have been the case if such deposit and legal defeasance had not occurred;
(8)	in the case of the covenant defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel (subject to customary assumptions and exclusions) in the United States to the effect that the Holders will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and covenant defeasance and will be subject to federal income tax on the same amount, in the same manner and at the same times as would have been the case if such deposit and covenant defeasance had not occurred; and
(9)	the Company delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent to either the legal defeasance or covenant defeasance, as the case may be, as contemplated by this Article VIII have been complied with.

          SECTION 8.3. Application of Trust Money. The Trustee shall hold in trust all money or U.S. Government Obligations (including proceeds thereof) deposited with it pursuant to this Article VIII. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture and the Securities to the Holders of the Securities of all sums due in respect of the payment of principal of, premium, if any, and accrued interest on the Securities.

          SECTION 8.4. Repayment to the Company. The Trustee and the Paying Agent shall promptly turn over to the Company upon request any excess money, U.S. Government Obligations or securities held by them upon payment of all the obligations under this Indenture.

          Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal of or premium, if any, or interest on the Securities that remains unclaimed by the Holders thereof for two years, and, thereafter, Holders entitled to the money must look to the Company for payment as unsecured general creditors.

          SECTION 8.5. Indemnity for U.S. Government Obligations. The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations other than any such tax, fee or other charge that is for the account of the Holder of the Securities.

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          SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company and each Subsidiary Guarantor, if any, under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article VIII; provided, however, that, if the Company or the Subsidiary Guarantors have made any payment of principal, premium, if any, interest on or principal of any Securities because of the reinstatement of its obligations, the Company or Subsidiary Guarantors, as the case may be, shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.

          The Trustee’s rights under this Article VIII shall survive termination of this Indenture.

ARTICLE IX
AMENDMENTS

          SECTION 9.1. Without Consent of Holders. The Company, the Note Guarantors and the Trustee may amend or supplement this Indenture, the Securities, the Collateral Documents, the Intercreditor Agreement, or any Note Guarantees without the consent of any Holder to:

(1)	cure any ambiguity, omission, defect or inconsistency;
(2)	provide for the assumption by a successor corporation of the obligations of the Company or any Note Guarantor under this Indenture;
(3)	provide for uncertificated Securities in addition to or in place of certificated Securities (provided that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Securities are described in Section 163(f) (2) (B) of the Code);
(4)	add Guarantees with respect to the Securities or release a Subsidiary Guarantor upon its designation as an Unrestricted Subsidiary; provided, however, that the designation is in accordance with the applicable provisions of this Indenture;
(5)	expand the collateral securing the Securities;
(6)	add to the covenants of the Company and the Restricted Subsidiaries for the benefit of the Holders or surrender any right or power conferred upon the Company or any Restricted Subsidiary;
(7)	make any change that does not adversely affect the rights of any Holder;

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(8)	comply with any requirement of the SEC in connection with the qualification of this Indenture under the TIA;
(9)	release a Note Guarantor from its obligations under its Note Guarantee or this Indenture in accordance with the applicable provisions of this Indenture;
(10)	release Liens in favor of the Collateral Agent in the Collateral as provided under Section 11.7 or otherwise in accordance with the terms of this Indenture, Collateral Documents or the Intercreditor Agreement;
(11)	provide for the appointment of a successor trustee; provided that the successor trustee is otherwise qualified and eligible to act as such under the terms of this Indenture;
(12)	provide for the issuance of Exchange Securities that shall have terms substantially identical in all respects to the Securities (except that the transfer restrictions contained in the Securities shall be modified or eliminated as appropriate) and that shall be treated, together with any outstanding Securities, as a single class of securities; or
(13)	conform the text of this Indenture, the Securities or the Note Guarantees to any provision of the “Description of senior secured notes” section of the Offering Memorandum to the extent that such provision in the “Description of senior secured notes” was intended to be a verbatim recitation of a provision of this Indenture, the Securities or the Note Guarantees.

          After an amendment or supplement under this Section, the Collateral Documents, or the Intercreditor Agreement becomes effective, the Company shall mail to Holders a notice briefly describing such amendment or supplement. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment or supplement under this Section 9.1.

          SECTION 9.2. With Consent of Holders. The Company, the Subsidiary Guarantors and the Trustee may amend or supplement this Indenture, the Securities or any Subsidiary Guarantee with the consent of the Holders of at least a majority in principal amount of the Securities then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities). Any past default or compliance with any provision of this Indenture, the Securities or any Subsidiary Guarantee (other than a Default or an Event of Default in the payment of the principal of, or premium, if any, or interest on a Security (except in accordance with Section 6.4)) may be waived with the consent of the Holders of a majority in principal amount of the Securities then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities). However, without the consent of each Holder affected, an amendment, supplement or waiver may not (with respect to any Securities held by a non-consenting Holder of Securities):

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     (1) reduce the amount of Securities whose Holders must consent to an amendment;

     (2) change the method of calculating the rate of interest or extend the stated time for payment of interest on any Security;

     (3) reduce the principal of or extend the Stated Maturity of any Security;

     (4) reduce the premium payable upon the redemption or repurchase of any Security or change the time at which any Security may be redeemed or repurchased pursuant to Article V or Section 3.11, whether through an amendment or waiver of provisions in the covenants or otherwise; provided that amendments to the definition of Change of Control shall not require the consent of each Holder affected;

     (5) make any Security payable in money other than that stated in the Security;

     (6) impair the right of any Holder to receive payment of principal, premium, if any, and interest on such Holder’s Securities on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Securities;

     (7) make any change to the amendment provisions that require each Holder’s consent or to the waiver provisions;

     (8) modify the Note Guarantees in any manner adverse to the Holders of the Securities; or

     (9) modify the provisions of the Collateral Documents or the Intercreditor Agreement in any manner materially adverse to the holders of the Securities or release all or substantially all of the Collateral from the Lien under the Intercreditor Agreement other than in accordance with this Indenture, the Collateral Documents or the Intercreditor Agreement.

          In addition, without the consent of holders of sixty-six and two-thirds percent (66 2/3%) in aggregate principal amount of the Securities outstanding, an amendment or waiver may not (with respect to any Securities held by a non-consenting holder) release Collateral other than in accordance with this Indenture, the Collateral Documents and the Intercreditor Agreement.

          It shall not be necessary for the consent of the Holders under this Section 9.2 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof. A consent to any amendment, supplement or waiver under this Indenture by any Holder of the Securities given in connection with a tender or exchange of such Holder’s Securities will not be rendered invalid by such tender or exchange.

          After an amendment or supplement under this Section becomes effective, the Company shall mail to Holders a notice briefly describing such amendment or supplement. The

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failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment or supplement under this Section 9.2.

          SECTION 9.3. Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or the Securities shall comply with the TIA as then in effect.

          SECTION 9.4. Revocation and Effect of Consents and Waivers. A consent to an amendment, supplement or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent or waiver is not made on the Security. Any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective or otherwise in accordance with any related solicitation documents. After an amendment, supplement or waiver becomes effective, it shall bind every Holder unless it makes a change described in any of clauses (1) through (9) of Section 9.2, in which case the amendment, supplement, waiver or other action shall bind each Holder who has consented to it and every subsequent Holder that evidences the same debt as the consenting Holder’s Securities. An amendment, supplement or waiver shall become effective upon receipt by the Trustee of the requisite number of written consents under Section 9.1 or 9.2 as applicable.

          The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall become valid or effective more than 120 days after such record date.

          SECTION 9.5. Notation on or Exchange of Securities. If an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determine, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment.

          SECTION 9.6. Trustee To Sign Amendments. The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article IX if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment, supplement or waiver the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and shall be provided with, and (subject to Sections 7.1 and 7.2) shall be fully protected in relying upon an Officers’ Certificate and an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Company and any

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Subsidiary Guarantors, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.3).

ARTICLE X
NOTE GUARANTEES

          SECTION 10.1. Note Guarantees. Each Note Guarantor hereby fully, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, jointly and severally with each other Note Guarantor, to each Holder of the Securities and the Trustee the full and punctual payment when due, whether at maturity, by acceleration, by redemption or otherwise, of the principal of, premium, if any, and interest on the Securities and all other monetary obligations of the Company under this Indenture (including interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Company or any Note Guarantor whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) (all the foregoing being hereinafter collectively called the “Guarantor Obligations”). Each Note Guarantor further agrees (to the extent permitted by law) that the Guarantor Obligations may be extended or renewed, in whole or in part, without notice or further assent from it, and that it will remain bound under this Article X notwithstanding any extension or renewal of any Guarantor Obligation.

          Each Note Guarantor waives presentation to, demand of payment from and protest to the Company of any of the Guarantor Obligations and also waives notice of protest for nonpayment. Each Note Guarantor waives notice of any default under the Securities or the Guarantor Obligations.

          Each Note Guarantor further agrees that its Note Guarantee herein constitutes a Guarantee of payment when due (and not a Guarantee of collection) and waives any right to require that any resort be had by any Holder to any security held for payment of the Guarantor Obligations.

          Except as set forth under Section 10.2, the obligations of each Note Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than payment of the Guarantor Obligations in full), including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guarantor Obligations or otherwise. Without limiting the generality of the foregoing, the Guarantor Obligations of each Note Guarantor herein shall not be discharged or impaired or otherwise affected by (a) the failure of any Holder to assert any claim or demand or to enforce any right or remedy against the Company or any other person under this Indenture, the Securities, the other Securities Documents or any other agreement or otherwise; (b) any extension or renewal of any thereof; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Securities, the other Securities Documents or any other agreement; (d) the release of any security held by any Holder or the Trustee for the Guarantor Obligations or any of them; (e) the failure of any Holder to exercise any right or remedy against any other Note Guarantor, or (f) any change in the ownership of the Company; (g) by any default, failure or delay, willful or otherwise, in the performance of the Guarantor Obligations, or (h) by any other act or thing or omission or delay to do any other act or thing

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which may or might in any manner or to any extent vary the risk of any Note Guarantor or would otherwise operate as a discharge of such Note Guarantor as a matter of law or equity.

          Subject to the provisions of Section 3.13, each Note Guarantor agrees that its Note Guarantee herein shall remain in full force and effect until payment in full of all the Guarantor Obligations or such Note Guarantor is released from its Note Guarantee upon the merger or the sale of all the Capital Stock or assets of the Note Guarantor in compliance with Section 10.2. Each Note Guarantor further agrees that its Note Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of, premium, if any, or interest on any of the Guarantor Obligations is rescinded or must otherwise be restored by any Holder upon the bankruptcy or reorganization of the Company or otherwise.

          In furtherance of the foregoing and not in limitation of any other right which any Holder has at law or in equity against any Note Guarantor by virtue hereof, upon the failure of the Company to pay any of the Guarantor Obligations when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, each Note Guarantor hereby promises to and will, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders an amount equal to the sum of (i) the unpaid amount of such Guarantor Obligations then due and owing and (ii) accrued and unpaid interest on such Guarantor Obligations then due and owing (but only to the extent not prohibited by law) (including interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the Company or any Note Guarantor whether or not a claim for post-filing or post-petition interest is allowed in such proceeding).

          Each Note Guarantor further agrees that, as between such Note Guarantor, on the one hand, and the Holders, on the other hand, (x) the maturity of the Guarantor Obligations guaranteed hereby may be accelerated as provided in this Indenture for the purposes of its Note Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guarantor Obligations guaranteed hereby and (y) in the event of any such declaration of acceleration of such Guarantor Obligations, such Guarantor Obligations (whether or not due and payable) shall forthwith become due and payable by the Note Guarantor for the purposes of this Note Guarantee.

          Each Note Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Trustee or the Holders in enforcing any rights under this Section.

          SECTION 10.2. Limitation on Liability; Termination, Release and Discharge. (a) Any term or provision of this Indenture to the contrary notwithstanding, the obligations of each Note Guarantor hereunder will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Note Guarantor (including any guarantees under the Senior Secured Credit Agreement) and after giving effect to any collections from or payments made by or on behalf of any other Note Guarantor in respect of the obligations of such other Note Guarantor under its Note Guarantee or pursuant to its contribution obligations under this Indenture, result in the obligations of such Note Guarantor under its Note Guarantee

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not constituting a fraudulent conveyance or fraudulent transfer under federal or state law and not otherwise being void or voidable under any similar laws affecting the rights of creditors generally.

          (b) Upon the sale or disposition of a Note Guarantor (by merger, consolidation, the sale of its Capital Stock or the sale of all or substantially all of its assets (other than by lease)), and whether or not the Note Guarantor is the surviving corporation in such transaction, to a Person which is not the Company or a Restricted Subsidiary of the Company (other than a Receivables Entity), such Note Guarantor will be automatically released from all its obligations under this Indenture and its Note Guarantee and the Registration Rights Agreement and such Note Guarantee will terminate; provided, however, that (x) the sale or other disposition is in compliance with this Indenture, including Sections 3.5, 3.9 and 4.1 and (y) all the obligations of such Note Guarantor under all Credit Facilities and related documentation and any other agreements relating to any other Indebtedness of the Company or its Restricted Subsidiaries terminate upon consummation of such transaction.

          (c) Each Note Guarantor shall be deemed released from all its obligations under this Indenture and the Registration Rights Agreement and such Note Guarantee shall terminate (x) upon the legal defeasance of the Securities pursuant to the provisions of Article VIII hereof or (y) in accordance with Section 3.13 of this Indenture.

          (d) Each Note Guarantor shall be released from its obligations under this Indenture, its Note Guarantee and the Registration Rights Agreement if the Company designates such Note Guarantor as an Unrestricted Subsidiary and such designation complies with the other applicable provisions of this Indenture.

          (e) Each Note Guarantor shall be released from its obligations under this Indenture, its Note Guarantee and the Registration Rights Agreement upon satisfaction and discharge of this Indenture pursuant to Section 8.1(a).

          (f) The Trustee shall promptly execute and deliver an appropriate instrument prepared and delivered to it at the expense of the Company evidencing any such release upon receipt of a request by the Company accompanied by an Officers’ Certificate certifying as to the compliance with this Section 11.2.

          SECTION 10.3. Right of Contribution. Each Note Guarantor hereby agrees that to the extent that any Note Guarantor shall have paid more than its proportionate share of any payment made on the obligations under the Note Guarantees, such Note Guarantor shall be entitled to seek and receive contribution from and against the Company, or any other Note Guarantor who has not paid its proportionate share of such payment. The provisions of this Section 11.3 shall in no respect limit the obligations and liabilities of each Note Guarantor to the Trustee and the Holders and each Note Guarantor shall remain liable to the Trustee and the Holders for the full amount guaranteed by such Note Guarantor hereunder.

          SECTION 10.4. No Subrogation. Notwithstanding any payment or payments made by each Note Guarantor hereunder, no Note Guarantor shall be entitled to be subrogated to any of the rights of the Trustee or any Holder against the Company or any other Note Guarantor

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or any collateral security or guarantee or right of offset held by the Trustee or any Holder for the payment of the Guarantor Obligations, nor shall any Note Guarantor seek or be entitled to seek any contribution or reimbursement from the Company or any other Note Guarantor in respect of payments made by such Note Guarantor hereunder, until all amounts owing to the Trustee and the Holders by the Company on account of the Guarantor Obligations are paid in full. If any amount shall be paid to any Note Guarantor on account of such subrogation rights at any time when all of the Guarantor Obligations shall not have been paid in full, such amount shall be held by such Note Guarantor in trust for the Trustee and the Holders, segregated from other funds of such Note Guarantor, and shall, forthwith upon receipt by such Note Guarantor, be turned over to the Trustee in the exact form received by such Note Guarantor (duly indorsed by such Note Guarantor to the Trustee, if required), to be applied against the Guarantor Obligations.

ARTICLE XI
COLLATERAL

          SECTION 11.1. The Collateral. (a) The Company hereby appoints The Bank of New York Trust Company, N.A., to act as Collateral Agent, and the Collateral Agent shall have the privileges, powers and immunities as set forth herein and in the Collateral Documents. The due and punctual payment of the principal of, premium, if any, and interest on the Securities and the Note Guarantees when and as the same shall be due and payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, interest on the overdue principal of and interest (to the extent permitted by law), if any, on the Securities and the Note Guarantees and performance of all other obligations under this Indenture, including, without limitation, the obligations of the Company set forth in Section 7.7, and the Securities and the Note Guarantees and the Collateral Documents, shall be secured by at least second-priority Liens and security interests in the Collateral, in each case subject to Permitted Liens, as provided in the Collateral Documents to which the Company and the Note Guarantors, as the case may be, have entered into simultaneously with the execution of this Indenture and will be secured by all of the Collateral pledged pursuant to the Collateral Documents hereafter delivered as required or permitted by this Indenture, the Collateral Documents and the Intercreditor Agreement. The Company and the Note Guarantors hereby agree that the Collateral Agent shall hold the Collateral in trust for the benefit of all of the Holders and the Trustee, in each case pursuant to the terms of the Collateral Documents and the Intercreditor Agreement and the Collateral Agent is hereby authorized to execute and deliver the Collateral Documents and the Intercreditor Agreement.

          (b) Each Holder, by its acceptance of any Securities and the Note Guarantees, consents and agrees to the terms of the Collateral Documents and the Intercreditor Agreement (including, without limitation, the provisions providing for foreclosure) as the same may be in effect or may be amended from time to time in accordance with their terms and authorizes and directs the Collateral Agent to perform its obligations and exercise its rights under the Collateral Documents in accordance therewith.

          (c) The Trustee and each Holder, by accepting the Securities and the Note Guarantees, acknowledges that, as more fully set forth in the Collateral Documents and the Intercreditor Agreement, the Collateral as now or hereafter constituted shall be held for the benefit of all the Holders and the Trustee, and that the Lien of this Indenture and the Collateral

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Documents in respect of the Trustee and the Holders is subject to and qualified and limited in all respects by the Collateral Documents and the Intercreditor Agreement and actions that may be taken thereunder.

          SECTION 11.2. Maintenance of Collateral. The Company and the Note Guarantors shall maintain the Collateral in good, safe and insurable operating order, condition and repair (ordinary wear and tear excepted) and do all other acts as may be reasonably necessary or appropriate to maintain and preserve the value of the Collateral, except where the failure to maintain such value would not have a material adverse effect on the Collateral. The Company and the Note Guarantors shall pay all real estate and other taxes (except for those being contested in good faith and for which adequate reserves have been made), and maintain in full force and effect in all material permits and certain insurance coverages, except to the extent that the failure to maintain such permits and coverages follows the sale, in accordance with this Indenture, of the assets to which such permits or coverages relate or where such failure would not have a material adverse effect on the Collateral.

          SECTION 11.3. Further Assurances. (a) The Company and the Note Guarantors shall, at their sole expense, do all acts reasonably requested by the Collateral Agent which may be reasonably necessary to confirm that the Collateral Agent holds, for the benefit of the Holders and the Trustee and the holders of any Pari Passu Secured Indebtedness, duly created, enforceable and perfected and at least second-priority Liens and security interests in the Collateral (subject to Permitted Liens) as contemplated by this Indenture, the Collateral Documents and the Intercreditor Agreement.

          (b) As necessary, or upon reasonable request of the Collateral Agent or Trustee, the Company and the Note Guarantors shall, at their sole expense, execute, acknowledge and deliver such documents and instruments and take such other actions, which may be necessary or which the Collateral Agent or the Trustee may reasonably request to create, protect, assure, perfect, transfer and confirm the Liens, benefits, property and rights conveyed or intended to be conveyed by this Indenture or the Collateral Documents for the benefit of the Holders and the Trustee, including with respect to after-acquired Collateral. If the Company or such Note Guarantor fails to do so, the Trustee is hereby irrevocably authorized and empowered, with full power of substitution, to execute, acknowledge and deliver such Collateral Documents, the Intercreditor Agreement, instruments, certificates, notices and other documents and, subject to the provisions of the Collateral Documents and the Intercreditor Agreement, take such other actions in the name, place and stead and at the expense of the Company or such Note Guarantor, but the Trustee will have no obligation to do so and no liability for any action taken or omitted by it in good faith in connection therewith.

          SECTION 11.4. After Acquired Property. Upon the acquisition by the Company or any Note Guarantor after the Closing Date of any assets located in the United States, including, but not limited to, any after-acquired fee interest in real property or any equipment or fixtures which constitute accretions, additions or technological upgrades to the equipment or fixtures that form part of the Collateral (in each case, with value in excess of $1,000,000), to the extent any such assets secure Credit Agreement Obligations or any Pari Passu Secured Indebtedness, the Company or such Note Guarantor, as the case may be, shall execute and deliver such Mortgages, security instruments and financing statements, together with

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reasonably required certificates and opinions of counsel, as may be necessary to vest in the Collateral Agent a perfected security interest, subject only to Permitted Liens, in such after-acquired property and to have such after-acquired property added to the Collateral, and thereupon all provisions of this Indenture and the other Securities Documents relating to the Collateral shall be deemed to relate to such after-acquired property to the same extent and with the same force and effect. In addition, the Company or any Note Guarantor shall comply with the second sentence of Section 3.6.

          SECTION 11.5. Agreements Requiring Application of Proceeds of Collateral. Neither the Company nor any of its Restricted Subsidiaries shall enter into any agreement that requires the proceeds received from any sale of Collateral to be applied to repay, redeem, defease or otherwise acquire or retire any Indebtedness of any Person, other than as permitted by this Indenture, the Securities, the Note Guarantees, the Collateral Documents and the Intercreditor Agreement. The Company shall, and shall cause each Note Guarantor to, at its sole cost and expense, execute and deliver all such agreements and instruments as necessary or as the Collateral Agent or Trustee shall reasonably request to more fully or accurately describe the assets and property intended to be Collateral or the obligations intended to be secured by the Collateral Documents.

          SECTION 11.6. Real Estate Mortgages and Filings and Leasehold Interests. (a) With respect to any fee interest in certain real property interests identified in Schedule 11.5 to this Indenture (individually and collectively, the “Premises”) owned by the Company or a Note Guarantor on the Issue Date or acquired by the Company or a Note Guarantor after the Issue Date (in each case, with value in excess of $1,000,000) that secures Credit Agreement Obligations:

(1)

the Company shall deliver to the Collateral Agent, as mortgagee or beneficiary, as applicable, fully executed counterparts of Mortgages, each dated as of the Issue Date or, if later, the date such property is pledged to secure the Credit Agreement Obligations, in accordance with the requirements of this Indenture and/or the Collateral Documents, duly executed by the Company or the applicable Note Guarantor, together with evidence of the completion (or satisfactory arrangements for the completion) of all recordings and filings of such Mortgage (and payment of any taxes or fees in connection therewith) as may be necessary to create a valid, perfected at least second-priority Lien (subject to Permitted Liens) against the properties purported to be covered thereby;

(2)

the Collateral Agent shall have received mortgagee’s title insurance policies in favor of the Collateral Agent, as mortgagee for the ratable benefit of itself, the Trustee, Holders and holders of any Pari Passu Secured Indebtedness, in the form necessary, with respect to the property purported to be covered by such Mortgage, to insure that the interests created by the Mortgage constitute valid and at least second-priority Liens on such property free and clear of all Liens, defects and encumbrances, (other than Permitted Liens), each such title insurance policy to be in an amount reasonably satisfactory to the Collateral Agent and such policies

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shall also include, to the extent available at a commercially reasonable premium, the endorsements equivalent to those delivered in connection with the Senior Secured Credit Agreement and shall be accompanied by evidence of the payment in full of all premiums thereon; and

(3)

the Company shall, or shall cause each Note Guarantor to, deliver to the Collateral Agent, with respect to each of the covered Premises, such filings, surveys (or any updates or affidavits that the title company may reasonably require as necessary to issue the title insurance policies), local counsel opinions, landlord agreements and fixture filings, along with such other documents, instruments, certificates and agreements, as the Collateral Agent and its counsel shall reasonably require to create, evidence or perfect a valid and at least second-priority Lien on the property subject to each such Mortgage (subject to Permitted Liens).

          (b) With respect to any leasehold interest in certain real property identified in Schedule 11.5 to this Indenture (individually and collectively, the ‘‘Leased Premises’’) leased by the Company or a Note Guarantor on the Issue Date or leased by the Company or a Note Guarantor after the Issue Date, the Company shall, or shall cause each Note Guarantor to, deliver to the Collateral Agent, with respect to each of the covered Leased Premises, any landlord waiver, collateral access agreement or other agreement, in form and substance satisfactory to the administrative agent under the Senior Secured Credit Agreement, between such administrative agent and (i) any other person in possession of any Collateral and (ii) any landlord of the Company of any Note Guarantor where any Collateral is located.

          SECTION 11.7. Release of Liens on the Collateral. (a) The Liens on the Collateral will be released with respect to the Securities and the Note Guarantees, as applicable:

(1)	in whole, upon payment in full of the principal of, accrued and unpaid interest, including additional interest, and premium, if any, on the Securities;
(2)	in whole, upon satisfaction and discharge of this Indenture in accordance with Section 8.1(a);
(3)	in whole, upon a legal defeasance as set forth under Article VIII;
(4)	in part, as to any asset constituting Collateral (A) that is cash withdrawn from deposit accounts for any purpose permitted by this Indenture, the Collateral Documents or the Intercreditor Agreement, (B) if all other Liens on that asset securing the Credit Agreement Obligations and any Pari Passu Secured Indebtedness then secured by that asset (including all commitments thereunder) are released or (C) otherwise in accordance with, and as expressly provided for under, this Indenture;
(5)	with the consent of holders of sixty-six and two-thirds percent (66 2/3%) in aggregate principal amount of the Securities (or, in the case of a release of all or substantially all Collateral, each holder of the Securities affected

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	thereby), including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, Securities; and
(6)	with respect to assets of a Note Guarantor upon release of such Note Guarantor from its Note Guarantee as set forth under Article X above.

          (b) The Company and each Note Guarantor will furnish to the Trustee and the Collateral Agent, prior to each proposed release of Collateral pursuant to Section 11.06(a)(1) through (6) or pursuant to the Collateral Documents:

     (1) an Officers’ Certificate and an Opinion of Counsel to the effect that all conditions precedent provided for in this Indenture and the Collateral Documents to such release have been complied with;

     (2) a form of such release (which release shall be in form reasonably satisfactory to the Trustee and shall provide that the requested release is without recourse or warranty to the Trustee);

     (3) all documents required by this Indenture, the Collateral Documents and the Intercreditor Agreement; and

     (4) an Opinion of Counsel to the effect that such release and other accompanying documents constitute all documents required by the Collateral Documents, the Intercreditor Agreement and this Indenture.

Upon compliance by the Company or the Note Guarantors, as the case may be, with the conditions precedent set forth above, and if required by this Indenture upon delivery by the Company or such Note Guarantor to the Trustee an Opinion of Counsel to the effect that such conditions have been complied with, the Trustee or the Collateral Agent shall promptly cause to be released and reconveyed to the Company, or the relevant Note Guarantor, as the case may be, the released Collateral, and the Trustee and Collateral Agent shall promptly execute and deliver to the Company or the relevant Guarantor, as the case may be, such instruments of release or reconveyance and other documents as the Company or such Guarantor may request.

          SECTION 11.8. Authorization of Actions to be Taken by the Trustee or the Collateral Agent Under the Collateral Documents (a) Subject to the provisions of the Collateral Documents and the Intercreditor Agreement, each of the Trustee or the Collateral Agent may, in its sole discretion and without the consent of the Holders, on behalf of the Holders, take all actions it deems necessary or appropriate in order to (i) enforce any of its rights or any of the rights of the Holders under the Collateral Documents and the Intercreditor Agreement and (ii) collect and receive any and all amounts payable in respect of the Collateral in respect of the obligations of the Company and the Note Guarantors hereunder and thereunder. Subject to the provisions of the Collateral Documents and the Intercreditor Agreement, the Trustee or the Collateral Agent shall have the power to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts that may be unlawful or in violation of the Collateral Documents, the Intercreditor Agreement or this Indenture, and such suits and proceedings as the Trustee or the Collateral Agent may deem

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expedient to preserve or protect its interest and the interests of the Holders in the Collateral (including the power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest hereunder or be prejudicial to the interests of the Holders or the Trustee).

          (b) The Trustee or the Collateral Agent shall not be responsible for the existence, genuineness or value (or diminution of value) of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, except to the extent such action or omission constitutes negligence, bad faith or willful misconduct on the part of the Trustee or the Collateral Agent, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of the Company to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. The Trustee or the Collateral Agent shall have no responsibility for recording, filing, re-recording or refiling any financing statement, continuation statement, document, instrument or other notice in any public office at any time or times or to otherwise take any action to perfect or maintain the perfection of any security interest granted to it under the Collateral Documents or otherwise.

          (c) Where any provision of this Indenture requires that additional property or assets be added to the Collateral, the Company and each Note Guarantor shall deliver to the Trustee or the Collateral Agent the following:

     (i) a request from the Company that such Collateral be added;

     (ii) the form of instrument adding such Collateral, which, based on the type and location of the property subject thereto, shall be in substantially the form of the applicable Collateral Documents entered into on the date of this Indenture, with such changes thereto as the Company shall consider appropriate, or in such other form as the Company shall deem proper, provided that any such changes or such form are administratively satisfactory to the Trustee or the Collateral Agent;

     (iii) an Officers’ Certificate to the effect that the Collateral being added is in the form and consists of the assets required by this Indenture;

     (iv) an Officers’ Certificate and Opinion of Counsel to the effect that all conditions precedent provided for in this Indenture to the addition of such Collateral have been complied with, which Opinion of Counsel shall also opine as to the creation and perfection of the Collateral Agent’s Lien on such Collateral and as to the due authorization, execution, delivery, validity and enforceability of the Collateral Document being entered into (in each case subject to customary exceptions); and

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     (v) such financing statements, if any, as the Company shall deem necessary to perfect the Collateral Agent’s security interest in such Collateral.

          SECTION 11.9. Acknowledgment by Holders. By acceptance of the benefits hereof, each Holder (i) irrevocably appoints the Collateral Agent and authorizes the Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Collateral Agent by the terms of the Note Pledge and Security Agreement, dated as of the date of this Indenture among the Company, the Parent, the subsidiaries of the Company party thereto and the Collateral Agent (“the Note Pledge and Security Agreement”) and this Indenture, together with such powers as are reasonably incidental thereto; and (ii) acknowledges and consents to the provisions of this Indenture and the Note Pledge and Security Agreement, and that it shall not be entitled to the benefits of the Note Pledge and Security Agreement or this Indenture except pursuant to the terms and conditions of this Indenture and the Note Pledge and Security Agreement.

ARTICLE XII
MISCELLANEOUS

          SECTION 12.1. Trust Indenture Act Controls. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the provision required by the TIA shall control. Each Note Guarantor in addition to performing its obligations under its Note Guarantee shall perform such other obligations as may be imposed upon it with respect to this Indenture under the TIA.

          SECTION 12.2. Notices. Any notice or communication shall be in writing and delivered in person, sent by facsimile, delivered by commercial courier service or mailed by first-class mail, postage prepaid, addressed as follows:

if to the Parent, the Company or any Subsidiary
Guarantor:

Libbey Glass Inc.
300 Madison Ave.
P.O. Box 10060
Toledo, Ohio 43699-0060
Fax: (419) 325-2585
Attention: Susan Kovach, Esq.

with copies to:

Christopher Lueking, Esq.
Latham & Watkins LLP
Sears Tower
233 South Wacker Drive
Chicago, IL 60606

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if to the Trustee:

The Bank of New York Trust Company, N.A.
2 North LaSalle Street
Chicago, IL 60602
Attention: Corporate Trust Administration

with copies to:

John B. Duer, Esq.
McGuireWoods LLP
1345 Avenue of the Americas
New York NY 10105

          The Company or the Trustee by written notice to the other may designate additional or different addresses for subsequent notices or communications.

          Any notice or communication to the Company or the Note Guarantors shall be deemed to have been given or made as of the date so delivered if personally delivered; when receipt is acknowledged, if telecopied; and five calendar days after mailing if sent by registered or certified mail, postage prepaid (except that a notice of change of address shall not be deemed to have been given until actually received by the addressee).

          Any notice or communication mailed to a registered Holder shall be mailed to the Holder at the Holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.

          Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee shall be effective only upon receipt.

          SECTION 12.3. Communication by Holders with other Holders. Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

          SECTION 12.4. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee:

     (1) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

     (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent, if

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any, provided for in this Indenture relating to the proposed action have been complied with.

          SECTION 12.5. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant to Section 3.18) shall include:

     (1) a statement that the individual making such certificate or opinion has read such covenant or condition;

     (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

     (3) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

     (4) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with.

          In giving such Opinion of Counsel, counsel may rely as to factual matters on an Officers’ Certificate or on certificates of public officials.

          SECTION 12.6. When Securities Disregarded. In determining whether the Holders of the required aggregate principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company, any Note Guarantor or any Affiliate of them shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee actually knows are so owned shall be so disregarded. Also, subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination.

          SECTION 12.7. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by, or at meetings of, Holders. The Registrar and the Paying Agent may make reasonable rules for their functions.

          SECTION 12.8. Legal Holidays. A “Legal Holiday” is a Saturday, a Sunday or other day on which commercial banking institutions are authorized or required to be closed in New York, New York. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected.

          SECTION 12.9. GOVERNING LAW. THIS INDENTURE, THE SECURITIES, THE COLLATERAL DOCUMENTS AND THE INTERCREDITOR AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF

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NEW YORK OR OF THE UNITED STATES SITTING IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE NOTE GUARANTEES. HOWEVER, THE MORTGAGES WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATES IN WHICH THE APPLICABLE PREMISES ARE LOCATED.

          SECTION 12.10. No Recourse Against Others. No director, officer, employee, incorporator or stockholder of the Parent, the Company or any of the Subsidiary Guarantors, as such, shall have any liability for any obligations of the Company or such Note Guarantor under the Securities, this Indenture, a Guarantee, the Collateral Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Securities by accepting a Security waives and releases all such liability to the extent permitted by applicable law. The waiver and release are part of the consideration for issuance of the Securities. Such waiver may not be effective to waive liabilities under the federal securities laws, and it is the view of the SEC that such a waiver is against public policy.

          SECTION 12.11. Successors. All agreements of the Company and each Note Guarantor in this Indenture and the Securities shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind its successors.

          SECTION 12.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture.

          SECTION 12.13. Qualification of Indenture. The Company shall qualify this Indenture under the TIA in accordance with the terms and conditions of the Registration Rights Agreement. The Trustee shall be entitled to receive from the Company any such Officers’ Certificates, Opinions of Counsel or other documentation as it may reasonably request in connection with any such qualification of this Indenture under the TIA.

          SECTION 12.14. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

          SECTION 12.15. Designated Senior Indebtedness. The Company and the Note Guarantors hereby designate the obligations under this Indenture, the Securities and the Collateral Documents to be “Designated Senior Indebtedness” and “Designated Guarantor Senior Indebtedness,” as the case may be, as defined in and for purposes of the indenture governing the Private Placement Notes.

          SECTION 12.16. Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer

120

(software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

          SECTION 12.17. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.

          SECTION 12.18. Severability. In case any one or more of the provisions in this Indenture or in the Securities shall be held invalid, illegal or unenforceable, in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions shall not in any way be affected or impaired thereby, it being intended that all of the provisions hereof shall be enforceable to the full extent permitted by law.

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          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first above written.

LIBBEY GLASS INC.
By:	/s/ Scott Sellick
	Name:	Scott Sellick
	Title:	Vice President and
		Chief Financial Officer

LIBBEY INC.
By:	/s/ Scott Sellick
	Name:	Scott Sellick
	Title:	Vice President and
		Chief Financial Officer

SYRACUSE CHINA COMPANY
WORLD TABLEWARE INC.
LGA4 CORP.
LGA3 CORP.
THE DRUMMOND GLASS COMPANY
LGC CORP.
TRAEX COMPANY
LIBBEY.COM LLC
LGFS INC.
LGAC LLC
By:	/s/ Scott Sellick
	Name:	Scott Sellick
	Title:	Vice President and
		Chief Financial Officer

CRISA INDUSTRIAL, L.L.C.
By:	/s/ Susan A. Kovach
	Name:	Susan Kovach
	Title:	Vice President and General Counsel

THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Trustee
By	/s/ Linda Garcia
	Linda Garcia
	Assistant Vice President
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Collateral Agent
By	/s/ Linda Garcia
	Linda Garcia
	Assistant Vice President

SCHEDULE 3.8

EXISTING AFFILIATE TRANSACTIONS

SCHEDULE 11.5

PREMISES AND LEASED PREMISES

EXHIBIT A

[FORM OF FACE OF SERIES A NOTE]

[Applicable Restricted Securities Legend]
[Depository Legend, if applicable]
[OID Legend, if applicable]

No. ___	Principal Amount $           , as
	revised by the Schedule of Increases and
	Decreases in Global Security attached hereto
	CUSIP NO.
	ISIN:

LIBBEY GLASS INC.

Floating Rate Senior Secured Note, Series A, due 2011

          Libbey Glass Inc., a Delaware corporation, promises to pay to Cede & Co., or its registered assigns, the principal sum of [                    ] DOLLARS, as revised by the Schedule of Increases and Decreases in Global Security attached hereto, on June 1, 2011.

     Interest Payment Dates: June 1 and December 1 commencing on December 1, 2006

     Record Dates: May 15 and November 15

          Additional provisions of this Security are set forth on the other side of this Security.

A-1

LIBBEY GLASS INC.
By:
	Name:	Scott Sellick
	Title:	Vice President and
		Chief Financial Officer
Date:

A-2

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Trustee, certifies
that this is one of
the Securities referred
to in the withinmentioned Indenture.

By:
	Authorized Signatory

Date:

A-3

[FORM OF REVERSE SIDE OF SERIES A NOTE]

LIBBEY GLASS INC.

Floating Rate Senior Secured Note, Series A, due 2011

1. Interest

          Libbey Glass Inc., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount of this Security at a rate per annum, reset semi-annually, equal to LIBOR (as defined below) plus 7.0% as determined by the calculation agent (the “Calculation Agent”), which shall initially be the Trustee, commencing June 16, 2006 until maturity and shall pay additional interest, if any, payable pursuant to Section 2(d) of the Registration Rights Agreement referred to below. The Company shall make each interest payment in cash semi-annually in arrears on June 1 and December 1 of each year commencing December 1, 2006, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). Notwithstanding the foregoing, if any such Interest Payment Date (other than an Interest Payment Date at maturity) would otherwise be a day that is not a Business Day, then the interest payment will be postponed to the next succeeding Business Day (except if that Business Day falls in the next succeeding calendar month, then interest will be paid on the immediately preceding Business Day). If the maturity date of the Securities is a day that is not a Business Day, all payments to be made on such day will be made on the next succeeding Business Day, with the same force and effect as if made on the maturity date, and no additional interest will be payable as a result of such delay in payment. The interest rate for each Interest Period (as defined below), other than the Interest Period commencing June 16, 2006 and continuing until November 30, 2006, for which the interest rate shall be [          ]%, shall be adjusted with effect from the Interest Payment Date on which such Interest Period begins. Interest on this Security will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from June 16, 2006; provided, that the first Interest Payment Date shall be December 1, 2006. The Company shall pay interest on overdue principal, and on overdue premium, if any (plus interest on such interest to the extent lawful), at the rate borne by the Securities to the extent lawful. Interest on the Securities will be computed on the basis of the actual number of days in an Interest Period and a 360-day year.

          The amount of interest for each day that this Security is outstanding (the “Daily Interest Amount”) shall be calculated by dividing the interest rate in effect for such day by 360 and multiplying the result by the principal amount of the Securities. The amount of interest to be paid on the Securities for each Interest Period will be calculated by adding the Daily Interest Amounts for each day in the Interest Period. All percentages resulting from any of the above calculations shall be rounded, if necessary, to the nearest one hundredth thousandth of a percentage point, with five one-millionths of a percentage point being rounded upwards (e.g., 9.876545% (or 0.09876545) being rounded to 9.87655% (or 0.0987655)) and all dollar amounts used in or resulting from such calculations shall be rounded to the nearest cent (with one-half cent being rounded upwards).

A-4

          “Determination Date,” with respect to an Interest Period, will be the second London Banking Day preceding the first day of the Interest Period.

          “Interest Period” means the period commencing on and including an Interest Payment Date and ending on and including the day immediately preceding the next succeeding Interest Payment Date; provided that the first Interest Period shall commence on and include June 16, 2006, and end on and include November 30, 2006.

          “LIBOR” with respect to an Interest Period will be the rate (expressed as a percentage per annum) for deposits in U.S. dollars for six-month periods beginning on the first day of such Interest Period that appears on Telerate Page 3750 as of 11:00 a.m., London time, on the Determination Date. If Telerate Page 3750 does not include such a rate or is unavailable on a Determination Date, the Calculation Agent will request the principal London office of each of four major banks in the London interbank market, as selected by the Calculation Agent, to provide such bank’s offered quotation (expressed as a percentage per annum), as of approximately 11:00 a.m., London time, on such Determination Date, to prime banks in the London interbank market for deposits in a Representative Amount in U. S. dollars for a six-month period beginning on the first day of such Interest Period. If at least two such offered quotations are so provided, LIBOR for the Interest Period will be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, the Calculation Agent will request each of three major banks in New York City, as selected by the Calculation Agent, to provide such bank’s rate (expressed as a percentage per annum), as of approximately 11:00 a.m., New York City time, on such Determination Date, for loans in a Representative Amount in United States dollars to leading European banks for a six-month period beginning on the first day of such Interest Period. If at least two such rates are so provided, LIBOR for the Interest Period will be the arithmetic mean of such rates. If fewer than two such rates are so provided, then LIBOR for the Interest Period will be LIBOR in effect with respect to the immediately preceding Interest Period.

          “London Banking Day” is any day in which dealings in U.S. dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market.

          “Representative Amount” means a principal amount of not less than $1,000,000 for a single transaction in the relevant market at the relevant time.

          The interest rate on the Securities will in no event be higher than the maximum rate permitted by applicable law. The Calculation Agent will, upon the request of the holder of any Securities, provide the interest rate then in effect with respect to the Securities. All calculations made by the Calculation Agent in the absence of manifest error will be conclusive for all purposes and binding on the Company, the Note Guarantors and the holders of the Securities.

          In the event that either the exchange offer registered under the Securities Act (the “Exchange Offer”) is not completed or the shelf registration statement (the “Shelf Registration Statement”), if required by the Registration Rights Agreement, dated as of June 16, 2006, among the Company and the Initial Purchasers (the “Registration Rights Agreement”), has not become effective on or prior to the date that is 270 days after the Issue Date (the “Target Registration

A-5

Date”), the interest rate on the Securities will be increased by (A) 0.25% per annum for the first 90-day period immediately following the Target Registration Date and (B) an additional 0.25% per annum with respect to each subsequent 90-day period, in each case until the Exchange Offer is completed or the Shelf Registration Statement, if required by the Registration Rights Agreement, becomes effective, as the case may be, or until the Securities become freely tradable under the Securities Act, up to a maximum of 1.00% per annum of additional interest. In the event the Company receives a request pursuant to Section 2(b) of the Registration Rights Agreement (a “Shelf Request”), and the Shelf Registration Statement required to be filed thereby has not become effective by the later of (x) the date that is 240 days after the Closing Date or (y) 90 days after the delivery of such Shelf Request (such later date, the “Shelf Additional Interest Date”), then the interest rate on the Securities will be increased by (1) 0.25% per annum for the first 90-day period payable commencing from one day after the Shelf Additional Interest Date and (2) an additional 0.25% per annum with respect to each subsequent 90-day period, in each case until the Shelf Registration Statement is declared effective or the Securities become freely tradable under the Securities Act, up to a maximum increase of 1.00% per annum of additional interest.

          If the Shelf Registration Statement, if required by the Registration Rights Agreement, has become effective and thereafter either ceases to be effective or the Prospectus contained therein ceases to be usable, in each whether or not permitted by the Registration Rights Agreement, at any time during the Shelf Effectiveness Period (as defined in the Registration Rights Agreement), and such failure to remain effective or usable exists for more than 30 days (whether or not consecutive) in any 12-month period, then the interest rate on the Securities will be increased by (i) 0.25% per annum for the first 90-day period commencing on the 31^st day in such 12-month period and (ii) an additional 0.25% per annum with respect to each subsequent 90-day period, in each case ending on such date that the Shelf Registration Statement has again become effective or the Prospectus again becomes usable, up to a maximum increase of 1.00% per annum of additional interest.

          The Holder of this Security is entitled to the benefits of the Registration Rights Agreement.

2. Method of Payment

          By no later than 10:00 a.m. (New York City time) on the date on which any principal of, premium, if any, or interest on any Security is due and payable, the Company shall irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay such principal, premium, if any, and/or interest. The Company will pay interest (except Defaulted Interest) to the Persons who are registered Holders of Securities at the close of business on the May 15 or November 15 next preceding the interest payment date even if Securities are cancelled, repurchased or redeemed after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal, premium, if any, and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of Securities represented by a Global Security (including principal, premium, if any, and interest) will be made by the transfer of immediately available funds to the accounts specified by The Depository Trust Company or any successor depository. The Company will make all payments

A-6

in respect of a Definitive Security (including principal, premium, if any, and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on the Securities may also be made, in the case of a Holder of at least $1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 15 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

3. Paying Agent and Registrar

          Initially, The Bank of New York Trust Company, N.A. (the “Trustee”) will act as Trustee, Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice to any Holder. Any of the domestically organized Restricted Subsidiaries may act as Paying Agent, Registrar or co-registrar.

4. Indenture

          The Company issued the Securities under an Indenture dated as of June 16, 2006 (as it may be amended or supplemented from time to time in accordance with the terms thereof, the “Indenture”), among the Company and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “Act”). Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all terms and provisions of the Indenture, and Holders are referred to the Indenture and the Act for a statement of those terms.

          The Securities are general senior secured obligations of the Company. The aggregate principal amount of securities that may be authenticated and delivered under the Indenture is unlimited. This Security is one of the Floating Rate Senior Secured Notes, Series A, due 2011 referred to in the Indenture. The Securities include (i) $306,000,000 aggregate principal amount of the Company’s Floating Rate Senior Secured Notes, Series A, due 2011 issued under the Indenture on June 16, 2006 (herein called “Initial Securities”), (ii) if and when issued, additional Floating Rate Senior Secured Notes, Series A, due 2011 or Floating Rate Senior Secured Notes, Series B, due 2011 of the Company that may be issued from time to time under the Indenture subsequent to June 16, 2006 (herein called “Additional Securities”) and (iii) if and when issued, the Company’s Floating Rate Senior Secured Notes, Series B, due 2011 that may be issued from time to time under the Indenture in exchange for Initial Securities or Additional Securities in an offer registered under the Securities Act as provided in the Registration Rights Agreement (herein called “Exchange Securities”). The Initial Securities, Additional Securities and Exchange Securities are treated as a single class of securities under the Indenture. The Indenture imposes certain limitations on the incurrence of indebtedness, the making of restricted payments, the sale of assets and subsidiary stock, the incurrence of certain liens, affiliate transactions, the sale of capital stock of restricted subsidiaries, the making of payments for consents, the entering into of agreements that restrict distributions from restricted subsidiaries and the consummation of mergers and consolidations. The Indenture also imposes

A-7

requirements with respect to the provision of financial information and the provision of guarantees of the Securities by certain subsidiaries.

          To guarantee the due and punctual payment of the principal, premium, if any, and interest (including post-filing or post-petition interest) on the Securities and all other amounts payable by the Company under the Indenture and the Securities when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Securities and the Indenture, the Note Guarantors have fully, unconditionally and irrevocably Guaranteed (and future guarantors, together with the Note Guarantors, will fully, unconditionally and irrevocably Guarantee), jointly and severally, to each Holder of the Securities and the Trustee the Guarantor Obligations pursuant to Article X of the Indenture on a senior basis.

5. Redemption

          Except as set forth below, the Securities will not be redeemable at the option of the Company prior to June 1, 2008. On and after such date, the Securities will be redeemable, at the Company’s option, in whole or in part, at any time from time to time, upon not less than 30 nor more than 60 days’ prior notice, at the following redemption prices (expressed in percentages of principal amount), plus accrued and unpaid interest, if any, to the applicable redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on June 1 of the years set forth below:

Period	Percentage
2008		107.500	%
2009		102.500	%
2010 and thereafter		100.000	%

          In addition, at any time and from time to time prior to June 1, 2008, the Company may redeem in the aggregate up to 35% of the original principal amount of the Securities (after giving effect to any future issuance of Additional Securities) with the Net Cash Proceeds of one or more Equity Offerings at a redemption price (expressed as a percentage of principal amount) of 100% of the principal amount thereof plus a premium equal to the interest rate per annum on the Securities applicable on the date on which notice of redemption is given, plus accrued and unpaid interest, if any, to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that at least 65% of the original principal amount of the Securities (after giving effect to any future issuance of Additional Securities) must remain outstanding after each such redemption; provided further, that each such redemption occurs within 90 days of the date of closing of such Equity Offering.

          If the optional redemption date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest, if any, will be paid to the Person in whose name the Security is registered at the close of business on such record date,

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and no additional interest will be payable to Holders whose Securities will be subject to redemption by the Company.

          In the case of any partial redemption, selection of the Securities for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Securities are listed or, if the Securities are not listed, then on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate, although no Securities of $1,000 in original principal amount or less will be redeemed in part. Any such notice to the Trustee may be cancelled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect. If any Security is to be redeemed in part only, the notice of redemption relating to such Security shall state the portion of the principal amount thereof to be redeemed. A new Security in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Security. On and after the redemption date, interest will cease to accrue on Securities or portions thereof called for redemption as long as the Company has deposited with the Paying Agent funds in satisfaction of the applicable redemption price pursuant to the Indenture.

6. Repurchase Provisions

          If a Change of Control occurs, unless the Company has exercised its right to redeem all of the Securities as described under paragraph 5 of the Securities, then such Change of Control shall constitute a triggering event which shall trigger the obligation of the Company to offer to repurchase from each Holder all or any part (equal to $1,000 or an integral multiple thereof) of such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) as provided in, and subject to the terms of, the Indenture.

7. Denominations; Transfer; Exchange

          The Securities are in registered form without coupons in denominations of principal amount of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay a sum sufficient to cover any transfer tax or other governmental taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange of any Security for a period beginning 15 days before the mailing of a notice of an offer to repurchase or redeem Securities and ending at the close of business on the day of such mailing. The Registrar shall not be required to register the transfer of or exchange of any Security selected for redemption.

8. Persons Deemed Owners

          The registered Holder of this Security may be treated as the owner of it for all purposes.

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9. Unclaimed Money

          Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal of or premium, if any, or interest on the Securities that remains unclaimed by the Holders thereof for two years, and, thereafter, Holders entitled to the money must look to the Company for payment as unsecured general creditors.

10. Defeasance

          Subject to certain exceptions and conditions set forth in the Indenture, the Company at any time may terminate some or all of its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal, premium, if any, and interest on the Securities to redemption or maturity, as the case may be.

11. Amendment, Supplement, Waiver

          Subject to certain exceptions set forth in the Indenture, (i) the Indenture, the Securities, the Collateral Documents, the Intercreditor Agreement and any Note Guarantee may be amended or supplemented by the Company, the Note Guarantors and the Trustee with the written consent of the Holders of at least a majority in principal amount of the then outstanding Securities and (ii) any default (other than with respect to nonpayment (except in accordance with Section 6.4 of the Indenture)) or noncompliance with any provision may be waived with the written consent of the Holders of a majority in principal amount of the then outstanding Securities and except as otherwise set forth in the Indenture, in each case other than in respect of a provision that cannot be amended without the written consent of each Holder affected. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company, the Note Guarantors and the Trustee may amend or supplement the Indenture or the Securities cure any ambiguity, omission, defect or inconsistency; provide for the assumption by a successor corporation of the obligations of the Company or any Note Guarantor under the Indenture; provide for uncertificated Securities in addition to or in place of certificated Securities (provided that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Securities are described in Section 163(f) (2) (B) of the Code); add Guarantees with respect to the Securities or release a Subsidiary Guarantor upon its designation as an Unrestricted Subsidiary; provided, however, that the designation is in accordance with the applicable provisions of the Indenture; secure the Securities with additional Collateral; add to the covenants of the Company and the Restricted Subsidiaries for the benefit of the Holders or surrender any right or power conferred upon the Company or any Restricted Subsidiary; make any change that does not adversely affect the rights of any Holder; comply with any requirement of the SEC in connection with the qualification of the Indenture under the TIA; release a Note Guarantor from its obligations under its Note Guarantee or the Indenture in accordance with the applicable provisions of the Indenture; provide for the appointment of a successor trustee, provided that the successor trustee is otherwise qualified and eligible to act as such under the terms of the Indenture; release Liens in favor of the Collateral Agent in the Collateral, as provided under Section 11.7 or otherwise in accordance with this Indenture, the Collateral Documents or the Intercreditor Agreement; provide for the issuance of

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Exchange Securities that shall have terms substantially identical in all respects to the Securities (except that the transfer restrictions contained in the Securities shall be modified or eliminated as appropriate) and that shall be treated, together with any outstanding Securities, as a single class of securities; or conform the text of the Indenture, the Securities or the Guarantees to any provision of the “Description of senior secured notes” section of the Offering Memorandum to the extent that such provision in the “Description of senior secured notes” was intended to be a verbatim recitation of a provision of the Indenture, the Securities or the Note Guarantees.

12. Defaults and Remedies

          Under the Indenture, Events of Default include (each of which are more specifically described in the Indenture) (i) default in any payment of interest or additional interest (as required by the Registration Rights Agreement) on any Security when due, continued for 30 days; (ii) default in the payment of principal of or premium, if any, on any Security when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise; (iii) failure by the Company or any Note Guarantor to comply with its obligations under Section 4.1 of the Indenture; (iv) failure by the Company or any Note Guarantor to comply for 30 days after notice with any of its obligations under Article III of the Indenture (in each case, other than a failure to purchase Securities which will constitute an Event of Default under clause (ii) and a failure to comply with Section 4.1 of the Indenture, which will constitute an Event of Default under clause (iii)); (v) failure by the Company or any Note Guarantor to comply for 60 days after notice as provided below with its other agreements contained in the Indenture; (vi) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), other than Indebtedness owed to the Company or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists, or is created after the Issue Date, which default (1) is caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness or (2) results in the acceleration of such Indebtedness prior to its maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates $15.0 million or more; (vii) certain events set forth in Section 6.1(7) of the Indenture of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law; (viii) failure by the Company or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries) would constitute a Significant Subsidiary to pay final judgments aggregating in excess of $15.0 million (net of any amounts that a reputable and creditworthy insurance company has acknowledged liability for in writing), which judgments are not paid, discharged or stayed for a period of 60 days; (ix) any Subsidiary Guarantee, Collateral Document or obligation under the Intercreditor Agreement of a Significant Subsidiary or group of Restricted Subsidiaries that taken together as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries would constitute a Significant Subsidiary ceases to be in full force and effect (except as contemplated

A-11

by the terms of the Indenture) or is declared null and void in a judicial proceeding or any Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary Guarantors that taken together as of the latest audited consolidated financial statements of the Company and its Restricted Subsidiaries would constitute a Significant Subsidiary denies or disaffirms its obligations under the Indenture, or its Subsidiary Guarantee any Collateral Document or the Intercreditor Agreement; or (x) with respect to any Collateral having a fair market value in excess of $15.0 million, individually or in the aggregate, (A) the security interest under the Collateral Documents, at any time, ceases to be in full force and effect for any reason other than in accordance with their terms and the terms of this Indenture and other than the satisfaction in full of all obligations under this Indenture and discharge of this Indenture, (B) any security interest created thereunder or under this Indenture is declared invalid or unenforceable or (C) the Company or any Note Guarantor asserts, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable. However, a default under clauses (iv) and (v) will not constitute an Event of Default until the Trustee or the Holders of 25% in principal amount of the outstanding Securities notify the Company of the default and the Company does not cure such default within the time specified in clauses (iv) and (v) hereof after receipt of such notice.

          If an Event of Default (other than an Event of Default described in (vii) hereof) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the outstanding Securities by notice to the Company and the Trustee, may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued and unpaid interest, if any, on all the Securities to be due and payable. If an Event of Default described in (vii) hereof occurs and is continuing, the principal of, premium, if any, and accrued and unpaid interest on all the Securities will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

          Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives indemnity or security reasonably satisfactory to it. Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment of principal, premium, if any, or interest) if it determines in good faith that withholding notice is in their interest.

13. Trustee Dealings with the Company

          Subject to certain limitations set forth in the Indenture, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company, the Subsidiary Guarantors or their Affiliates and may otherwise deal with the Company, the Subsidiary Guarantors or their Affiliates with the same rights it would have if it were not Trustee.

14. No Recourse Against Others

          No director, officer, employee, incorporator or stockholder of the Parent, the Company or any of the Subsidiary Guarantors, as such, shall have any liability for any

A-12

obligations of the Company under the Securities, the Indenture or any Guarantee or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Securities by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities. Such waiver may not be effective to waive liabilities under the federal securities laws, and it is the view of the SEC that such a waiver is against public policy.

15. Authentication

          This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent acting on its behalf) manually signs the certificate of authentication on the other side of this Security.

16. Abbreviations

          Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with rights of survivorship and not as tenants in common), CUST (= custodian) and U/G/M/A (= Uniform Gift to Minors Act).

17. CUSIP, Common Code and ISIN Numbers

          The Company has caused CUSIP, Common Code or ISIN numbers, if applicable, to be printed on the Securities and has directed the Trustee to use CUSIP, Common Code or ISIN numbers, if applicable, in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon.

18. Governing Law

          This Security shall be governed by, and construed in accordance with, the laws of the State of New York.

          The Company will furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture. Requests may be made to:

Libbey Inc.
300 Madison Ave.
P.O. Box 10060
Toledo, Ohio 43699-0060
Attention: Treasurer

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ASSIGNMENT FORM

          To assign this Security, fill in the form below:

          I or we assign and transfer this Security to:

(Print or type assignee’s name, address and zip code)

(Insert assignee’s social security or tax I.D. No.)

and irrevocably appoint                      agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Date: Your Signature:

Signature Guarantee:
	(Signature must be guaranteed)

Sign exactly as your name appears on the other side of this Security.

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to SEC Rule 17Ad-15.

     In connection with any transfer or exchange of any of the Securities evidenced by this certificate occurring prior to the date that is two years after the later of the date of original issuance of such Securities and the last date, if any, on which such Securities were owned by the Company, or any Affiliate of the Company, the undersigned confirms that such Securities are being:

CHECK ONE BOX BELOW:

1¨	acquired for the undersigned’s own account, without transfer; or
2¨	transferred to the Company; or
3¨	transferred pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”); or
4¨	transferred pursuant to an effective registration statement under the Securities Act; or
5¨	transferred pursuant to and in compliance with Regulation S under the Securities Act; or

A-14

6¨	transferred to an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act), that has furnished to the Trustee a signed letter containing certain representations and agreements (the form of which letter appears as Section 2.7 of the Indenture); or
7¨	transferred pursuant to another available exemption from the registration requirements of the Securities Act.

Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any person other than the registered Holder thereof; provided, however, that if box (5), (6) or (7) is checked, the Trustee or the Company may require, prior to registering any such transfer of the Securities, the delivery of an opinion of counsel, certification and/or other information satisfactory to each of them to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, such as the exemption provided by Rule 144 under such Act.

Signature Guarantee:	Signature
(Signature must be guaranteed)	Signature

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to SEC Rule 17Ad-15.

TO BE COMPLETED BY PURCHASER IF (1) OR (3) ABOVE IS CHECKED.

     The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

Dated:

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[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES AND DECREASES IN GLOBAL SECURITY

     The following increases and decreases in this Global Security have been made:

				Signature of
	Amount of	Amount of	Principal Amount	authorized
Date of	decrease in	increase in	of this Global	signatory of
Decrease	Principal Amount	Principal Amount	Security following	Trustee or
or	of this Global	of this Global	such decrease or	Securities
Increase	Security	Security	increase	Custodian

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OPTION OF HOLDER TO ELECT PURCHASE

          If you elect to have this Security purchased by the Company pursuant to Section 3.5 or 3.11 of the Indenture, check either box:

o           o
3.5           3.11

     If you want to elect to have only part of this Security purchased by the Company pursuant to Section 3.5 or Section 3.11 of the Indenture, state the amount in principal amount (must be integral multiple of $1,000): $                                                                                                    

Date:	Your Signature:
	(Sign exactly as your name appears on the other side of the Security)

Signature Guarantee:
	(Signature must be guaranteed)

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to SEC Rule 17Ad-15.

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EXHIBIT B

[FORM OF FACE OF SERIES B NOTE]

[Depository Legend, if applicable]
[OID Legend, if applicable]

No.	Principal Amount $                     , as
	revised by the Schedule of Increases and
	Decreases in Global Security attached hereto
	CUSIP NO.
	ISIN:

LIBBEY GLASS INC.

Floating Rate Senior Secured Note, Series B, due 2011

          Libbey Glass Inc., a Delaware corporation, promises to pay to Cede & Co., or its registered assigns, the principal sum of [                    ] DOLLARS, as revised by the Schedule of Increases and Decreases in Global Security attached hereto, on June 1, 2011.

     Interest Payment Dates: June 1 and December 1 commencing on December 1, 2006

     Record Dates: May 15 and November 15

          Additional provisions of this Security are set forth on the other side of this Security.

B-1

LIBBEY GLASS INC.
By:
Name:	Scott Sellick
Title:	Vice President and
	Chief Financial Officer
Date:

B-2

TRUSTEE’S CERTIFICATE OF
  AUTHENTICATION
THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Trustee, certifies
that this is one of
the Securities referred
to in the withinmentioned Indenture.

By:
	Authorized Signatory

Date:

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EXHIBIT B

[FORM OF REVERSE SIDE OF SERIES B NOTE]

LIBBEY GLASS INC.

Floating Rate Senior Secured Note, Series B, due 2011

1. Interest

          Libbey Glass Inc., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount of this Security at a rate per annum, reset semi-annually, equal to LIBOR (as defined below) plus 7.0% as determined by the calculation agent (the “Calculation Agent”), which shall initially be the Trustee, commencing June 16, 2006 until maturity and shall pay additional interest, if any, payable pursuant to Section 2(d) of the Registration Rights Agreement referred to below. The Company shall make each interest payment in cash semi-annually in arrears on June 1 and December 1 of each year commencing December 1, 2006, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). Notwithstanding the foregoing, if any such Interest Payment Date (other than an Interest Payment Date at maturity) would otherwise be a day that is not a Business Day, then the interest payment will be postponed to the next succeeding Business Day (except if that Business Day falls in the next succeeding calendar month, then interest will be paid on the immediately preceding Business Day). If the maturity date of the Securities is a day that is not a Business Day, all payments to be made on such day will be made on the next succeeding Business Day, with the same force and effect as if made on the maturity date, and no additional interest will be payable as a result of such delay in payment. The interest rate for each Interest Period (as defined below), other than the Interest Period commencing June 16, 2006 and continuing until November 30, 2006, for which the interest rate shall be [      ]%, shall be adjusted with effect from the Interest Payment Date on which such Interest Period begins. Interest on this Security will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from June 16, 2006; provided, that the first Interest Payment Date shall be December 1, 2006. The Company shall pay interest on overdue principal, and on overdue premium, if any (plus interest on such interest to the extent lawful), at the rate borne by the Securities to the extent lawful. Interest on the Securities will be computed on the basis of the actual number of days in an Interest Period and a 360-day year of twelve 30-day months.

          The amount of interest for each day that this Security is outstanding (the “Daily Interest Amount”) shall be calculated by dividing the interest rate in effect for such day by 360 and multiplying the result by the principal amount of the Securities. The amount of interest to be paid on the Securities for each Interest Period will be calculated by adding the Daily Interest Amounts for each day in the Interest Period. All percentages resulting from any of the above calculations shall be rounded, if necessary, to the nearest one hundredth thousandth of a percentage point, with five one-millionths of a percentage point being rounded upwards (e.g., 9.876545% (or 0.09876545) being rounded to 9.87655% (or 0.0987655)) and all dollar amounts

B-1

used in or resulting from such calculations shall be rounded to the nearest cent (with one-half cent being rounded upwards).

          “Determination Date,” with respect to an Interest Period, will be the second London Banking Day preceding the first day of the Interest Period.

          “Interest Period” means the period commencing on and including an Interest Payment Date and ending on and including the day immediately preceding the next succeeding Interest Payment Date; provided that the first Interest Period shall commence on and include June 16, 2006, and end on and include November 30, 2006.

          “LIBOR” with respect to an Interest Period will be the rate (expressed as a percentage per annum) for deposits in U.S. dollars for six-month periods beginning on the first day of such Interest Period that appears on Telerate Page 3750 as of 11:00 a.m., London time, on the Determination Date. If Telerate Page 3750 does not include such a rate or is unavailable on a Determination Date, the Calculation Agent will request the principal London office of each of four major banks in the London interbank market, as selected by the Calculation Agent, to provide such bank’s offered quotation (expressed as a percentage per annum), as of approximately 11:00 a.m., London time, on such Determination Date, to prime banks in the London interbank market for deposits in a Representative Amount in U. S. dollars for a six-month period beginning on the first day of such Interest Period. If at least two such offered quotations are so provided, LIBOR for the Interest Period will be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, the Calculation Agent will request each of three major banks in New York City, as selected by the Calculation Agent, to provide such bank’s rate (expressed as a percentage per annum), as of approximately 11:00 a.m., New York City time, on such Determination Date, for loans in a Representative Amount in United States dollars to leading European banks for a six-month period beginning on the first day of such Interest Period. If at least two such rates are so provided, LIBOR for the Interest Period will be the arithmetic mean of such rates. If fewer than two such rates are so provided, then LIBOR for the Interest Period will be LIBOR in effect with respect to the immediately preceding Interest Period.

          “London Banking Day” is any day in which dealings in U.S. dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market.

          “Representative Amount” means a principal amount of not less than $1,000,000 for a single transaction in the relevant market at the relevant time.

          The interest rate on the Securities will in no event be higher than the maximum rate permitted by applicable law. The Calculation Agent will, upon the request of the holder of any Securities, provide the interest rate then in effect with respect to the Securities. All calculations made by the Calculation Agent in the absence of manifest error will be conclusive for all purposes and binding on the Company, the Note Guarantors and the holders of the Securities.

B-2

2. Method of Payment

          By no later than 10:00 a.m. (New York City time) on the date on which any principal of, premium, if any, or interest on any Security is due and payable, the Company shall irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay such principal, premium, if any, and/or interest. The Company will pay interest (except Defaulted Interest) to the Persons who are registered Holders of Securities at the close of business on the May 15 or November 15 next preceding the interest payment date even if Securities are cancelled, repurchased or redeemed after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal, premium, if any, and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of Securities represented by a Global Security (including principal, premium, if any, and interest) will be made by the transfer of immediately available funds to the accounts specified by The Depository Trust Company or any successor depository. The Company will make all payments in respect of a Definitive Security (including principal, premium, if any, and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on the Securities may also be made, in the case of a Holder of at least $1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 15 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

3. Paying Agent and Registrar

          Initially, The Bank of New York Trust Company, N.A. (the “Trustee”) will act as Trustee, Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice to any Holder. Any of the domestically organized Restricted Subsidiaries may act as Paying Agent, Registrar or co-registrar.

4. Indenture

          The Company issued the Securities under an Indenture dated as of June 16, 2006 (as it may be amended or supplemented from time to time in accordance with the terms thereof, the “Indenture”), among the Company and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “Act”). Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all terms and provisions of the Indenture, and Holders are referred to the Indenture and the Act for a statement of those terms.

          The Securities are general senior secured obligations of the Company. The aggregate principal amount of securities that may be authenticated and delivered under the Indenture is unlimited. This Security is one of the Floating Rate Senior Secured Notes, Series B, due 2011 referred to in the Indenture. The Securities include (i) $306,000,000 aggregate principal amount of the Company’s Floating Rate Senior Secured Notes, Series A, due 2011

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issued under the Indenture on June 16, 2006 (herein called “Initial Securities”), (ii) if and when issued, additional Floating Rate Senior Secured Notes, Series A, due 2011 or Floating Rate Senior Secured Notes, Series B, due 2011 of the Company that may be issued from time to time under the Indenture subsequent to June 16, 2006 (herein called “Additional Securities”) and (iii) if and when issued, the Company’s Floating Rate Senior Secured Notes, Series B, due 2011 that may be issued from time to time under the Indenture in exchange for Initial Securities or Additional Securities in an offer registered under the Securities Act as provided in the Registration Rights Agreement (herein called “Exchange Securities”). The Initial Securities, Additional Securities and Exchange Securities are treated as a single class of securities under the Indenture. The Indenture imposes certain limitations on the incurrence of indebtedness, the making of restricted payments, the sale of assets and subsidiary stock, the incurrence of certain liens, affiliate transactions, the sale of capital stock of restricted subsidiaries, the making of payments for consents, the entering into of agreements that restrict distributions from restricted subsidiaries and the consummation of mergers and consolidations. The Indenture also imposes requirements with respect to the provision of financial information and the provision of guarantees of the Securities by certain subsidiaries.

          To guarantee the due and punctual payment of the principal, premium, if any, and interest (including post-filing or post-petition interest) on the Securities and all other amounts payable by the Company under the Indenture and the Securities when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Securities and the Indenture, the Note Guarantors have fully, unconditionally and irrevocably Guaranteed (and future guarantors, together with the Note Guarantors, will fully, unconditionally and irrevocably Guarantee), jointly and severally, to each Holder of the Securities and the Trustee the Guarantor Obligations pursuant to Article X of the Indenture on a senior basis.

5. Redemption

          Except as set forth below, the Securities will not be redeemable at the option of the Company prior to June 1, 2008. On and after such date, the Securities will be redeemable, at the Company’s option, in whole or in part, at any time from time to time, upon not less than 30 nor more than 60 days’ prior notice, at the following redemption prices (expressed in percentages of principal amount), plus accrued and unpaid interest, if any, to the applicable redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on June 1 of the years set forth below:

Period	Percentage
2008		107.500	%
2009		102.500	%
2010 and thereafter		100.000	%

          In addition, at any time and from time to time prior to June 1, 2008, the Company may redeem in the aggregate up to 35% of the original principal amount of the Securities (after

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giving effect to any future issuance of Additional Securities) with the Net Cash Proceeds of one or more Equity Offerings at a redemption price (expressed as a percentage of principal amount) of 100% of the principal amount thereof plus a premium equal to the interest rate per annum on the Securities applicable on the date on which notice of redemption is given, plus accrued and unpaid interest, if any, to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that at least 65% of the original principal amount of the Securities (after giving effect to any future issuance of Additional Securities) must remain outstanding after each such redemption; provided further, that each such redemption occurs within 90 days of the date of closing of such Equity Offering.

          If the optional redemption date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest, if any, will be paid to the Person in whose name the Security is registered at the close of business on such record date, and no additional interest will be payable to Holders whose Securities will be subject to redemption by the Company.

          In the case of any partial redemption, selection of the Securities for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Securities are listed or, if the Securities are not listed, then on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate, although no Securities of $1,000 in original principal amount or less will be redeemed in part. Any such notice to the Trustee may be cancelled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect. If any Security is to be redeemed in part only, the notice of redemption relating to such Security shall state the portion of the principal amount thereof to be redeemed. A new Security in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Security. On and after the redemption date, interest will cease to accrue on Securities or portions thereof called for redemption as long as the Company has deposited with the Paying Agent funds in satisfaction of the applicable redemption price pursuant to the Indenture.

6. Repurchase Provisions

          If a Change of Control occurs, unless the Company has exercised its right to redeem all of the Securities as described under paragraph 5 of the Securities, then such Change of Control shall constitute a triggering event which shall trigger the obligation of the Company to offer to repurchase from each Holder all or any part (equal to $1,000 or an integral multiple thereof) of such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) as provided in, and subject to the terms of, the Indenture.

7. Denominations; Transfer; Exchange

          The Securities are in registered form without coupons in denominations of principal amount of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange

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Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay a sum sufficient to cover any transfer tax or other governmental taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange of any Security for a period beginning 15 days before the mailing of a notice of an offer to repurchase or redeem Securities and ending at the close of business on the day of such mailing. The Registrar shall not be required to register the transfer of or exchange of any Security selected for redemption.

8. Persons Deemed Owners

          The registered Holder of this Security may be treated as the owner of it for all purposes.

9. Unclaimed Money

          Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal of or premium, if any, or interest on the Securities that remains unclaimed by the Holders thereof for two years, and, thereafter, Holders entitled to the money must look to the Company for payment as unsecured general creditors.

10. Defeasance

          Subject to certain exceptions and conditions set forth in the Indenture, the Company at any time may terminate some or all of its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal, premium, if any, and interest on the Securities to redemption or maturity, as the case may be.

11. Amendment, Supplement, Waiver

          Subject to certain exceptions set forth in the Indenture, (i) the Indenture, the Securities, the Collateral Documents, the Intercreditor Agreement and any Note Guarantee may be amended or supplemented by the Company, the Note Guarantors and the Trustee with the written consent of the Holders of at least a majority in principal amount of the then outstanding Securities and (ii) any default (other than with respect to nonpayment (except in accordance with Section 6.4 of the Indenture)) or noncompliance with any provision may be waived with the written consent of the Holders of a majority in principal amount of the then outstanding Securities and except as otherwise set forth in the Indenture, in each case other than in respect of a provision that cannot be amended without the written consent of each Holder affected. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company, the Note Guarantors and the Trustee may amend or supplement the Indenture or the Securities cure any ambiguity, omission, defect or inconsistency; provide for the assumption by a successor corporation of the obligations of the Company or any Note Guarantor under the Indenture; provide for uncertificated Securities in addition to or in place of certificated Securities (provided that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Securities are described in Section 163(f) (2) (B) of the Code); add Guarantees with respect to the Securities or release a Subsidiary

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Guarantor upon its designation as an Unrestricted Subsidiary; provided, however, that the designation is in accordance with the applicable provisions of the Indenture; secure the Securities with additional Collateral; add to the covenants of the Company and the Restricted Subsidiaries for the benefit of the Holders or surrender any right or power conferred upon the Company or any Restricted Subsidiary; make any change that does not adversely affect the rights of any Holder; comply with any requirement of the SEC in connection with the qualification of the Indenture under the TIA; release a Note Guarantor from its obligations under its Note Guarantee or the Indenture in accordance with the applicable provisions of the Indenture; provide for the appointment of a successor trustee, provided that the successor trustee is otherwise qualified and eligible to act as such under the terms of the Indenture; release Liens in favor of the Collateral Agent in the Collateral, as provided under Section 11.7 or otherwise in accordance with this Indenture, the Collateral Documents or the Intercreditor Agreement; provide for the issuance of Exchange Securities that shall have terms substantially identical in all respects to the Securities (except that the transfer restrictions contained in the Securities shall be modified or eliminated as appropriate) and that shall be treated, together with any outstanding Securities, as a single class of securities; or conform the text of the Indenture, the Securities or the Guarantees to any provision of the “Description of senior secured notes” section of the Offering Memorandum to the extent that such provision in the “Description of senior secured notes” was intended to be a verbatim recitation of a provision of the Indenture, the Securities or the Note Guarantees.

12. Defaults and Remedies

          Under the Indenture, Events of Default include (each of which are more specifically described in the Indenture) (i) default in any payment of interest or additional interest (as required by the Registration Rights Agreement) on any Security when due, continued for 30 days; (ii) default in the payment of principal of or premium, if any, on any Security when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise; (iii) failure by the Company or any Note Guarantor to comply with its obligations under Section 4.1 of the Indenture; (iv) failure by the Company or any Note Guarantor to comply for 30 days after notice with any of its obligations under Article III of the Indenture (in each case, other than a failure to purchase Securities which will constitute an Event of Default under clause (ii) and a failure to comply with Section 4.1 of the Indenture, which will constitute an Event of Default under clause (iii)); (v) failure by the Company or any Note Guarantor to comply for 60 days after notice as provided below with its other agreements contained in the Indenture; (vi) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), other than Indebtedness owed to the Company or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists, or is created after the Issue Date, which default (1) is caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness or (2) results in the acceleration of such Indebtedness prior to its maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates $15.0 million or more; (vii) certain events set forth in Section 6.1(7) of the Indenture of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as

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of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law; (viii) failure by the Company or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries) would constitute a Significant Subsidiary to pay final judgments aggregating in excess of $15.0 million (net of any amounts that a reputable and creditworthy insurance company has acknowledged liability for in writing), which judgments are not paid, discharged or stayed for a period of 60 days; (ix) any Subsidiary Guarantee, Collateral Document or obligation under the Intercreditor Agreement of a Significant Subsidiary or group of Restricted Subsidiaries that taken together as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries would constitute a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms of the Indenture) or is declared null and void in a judicial proceeding or any Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary Guarantors that taken together as of the latest audited consolidated financial statements of the Company and its Restricted Subsidiaries would constitute a Significant Subsidiary denies or disaffirms its obligations under the Indenture, its Subsidiary Guarantee, any Collateral Document or the Intercreditor Agreement; or (x) with respect to any Collateral having a fair market value in excess of $15.0 million, individually or in the aggregate, (A) the security interest under the Collateral Documents, at any time, ceases to be in full force and effect for any reason other than in accordance with their terms and the terms of this Indenture and other than the satisfaction in full of all obligations under this Indenture and discharge of this Indenture, (B) any security interest created thereunder or under this Indenture is declared invalid or unenforceable or (C) the Company or any Note Guarantor asserts, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable. However, a default under clauses (iv) and (v) will not constitute an Event of Default until the Trustee or the Holders of 25% in principal amount of the outstanding Securities notify the Company of the default and the Company does not cure such default within the time specified in clauses (iv) and (v) hereof after receipt of such notice.

          If an Event of Default (other than an Event of Default described in (vii) hereof) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the outstanding Securities by notice to the Company and the Trustee, may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued and unpaid interest, if any, on all the Securities to be due and payable. If an Event of Default described in (vii) hereof occurs and is continuing, the principal of, premium, if any, and accrued and unpaid interest on all the Securities will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

          Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives indemnity or security reasonably satisfactory to it. Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment of principal, premium, if any, or interest) if it determines in good faith that withholding notice is in their interest.

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13. Trustee Dealings with the Company

          Subject to certain limitations set forth in the Indenture, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company, the Subsidiary Guarantors or their Affiliates and may otherwise deal with the Company, the Subsidiary Guarantors or their Affiliates with the same rights it would have if it were not Trustee.

14. No Recourse Against Others

          No director, officer, employee, incorporator or stockholder of the Parent, the Company or any of the Subsidiary Guarantors, as such, shall have any liability for any obligations of the Company under the Securities, the Indenture or any Guarantee or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Securities by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities. Such waiver may not be effective to waive liabilities under the federal securities laws, and it is the view of the SEC that such a waiver is against public policy.

15. Authentication

          This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent acting on its behalf) manually signs the certificate of authentication on the other side of this Security.

16. Abbreviations

          Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with rights of survivorship and not as tenants in common), CUST (= custodian) and U/G/M/A (= Uniform Gift to Minors Act).

17. CUSIP, Common Code and ISIN Numbers

          The Company has caused CUSIP, Common Code or ISIN numbers, if applicable, to be printed on the Securities and has directed the Trustee to use CUSIP, Common Code or ISIN numbers, if applicable, in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon.

18. Governing Law

          This Security shall be governed by, and construed in accordance with, the laws of the State of New York.

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          The Company will furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture. Requests may be made to:

Libbey Inc.
300 Madison Ave.
P.O. Box 10060
Toledo, Ohio 43699-0060
Attention: Treasurer

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ASSIGNMENT FORM

          To assign this Security, fill in the form below:

          I or we assign and transfer this Security to:

(Print or type assignee’s name, address and zip code)

(Insert assignee’s social security or tax I.D. No.)

and irrevocably appoint                      agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Date:                                          Your Signature:

Signature Guarantee:
	(Signature must be guaranteed)

Sign exactly as your name appears on the other side of this Security.

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to SEC Rule 17Ad-15.

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[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES AND DECREASES IN GLOBAL SECURITY

          The following increases and decreases in this Global Security have been made:

				Signature of
	Amount of	Amount of	Principal Amount	authorized
Date of	decrease in	increase in	of this Global	signatory of
Decrease	Principal Amount	Principal Amount	Security following	Trustee or
or	of this Global	of this Global	such decrease or	Securities
Increase	Security	Security	increase	Custodian

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OPTION OF HOLDER TO ELECT PURCHASE

          If you elect to have this Security purchased by the Company pursuant to Section 3.5 or 3.11 of the Indenture, check either box:

o           o
3.5           3.11

          If you want to elect to have only part of this Security purchased by the Company pursuant to Section 3.5 or Section 3.11 of the Indenture, state the amount in principal amount (must be integral multiple of $1,000): $                                                                                                          

Date:	Your Signature:
	(Sign exactly as your name appears on the other side of the Security)

Signature Guarantee:
	(Signature must be guaranteed)

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to SEC Rule 17Ad-15.

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EXHIBIT C

FORM OF INDENTURE SUPPLEMENT TO ADD SUBSIDIARY GUARANTORS

          This Supplemental Indenture, dated as of                      ___, 20___ (this “Supplemental Indenture” or “Guarantee”), among [name of future Subsidiary Guarantor] (the “Guarantor”), LIBBEY GLASS INC. (together with its successors and assigns, the “Company”), each other then-existing Guarantors under the Indenture referred to below, and The Bank of New York Trust Company, N.A., as Trustee under the Indenture referred to below.

WITNESSETH:

          WHEREAS, the Company, the Subsidiary Guarantors and the Trustee have heretofore executed and delivered an Indenture, dated as of June 16, 2006 (as amended, supplemented, waived or otherwise modified, the “Indenture”), providing for the issuance of Floating Rate Senior Secured Notes due 2011 of the Company (the “Securities”);

          WHEREAS, Section 3.13 of the Indenture provides that under certain circumstances the Company is required to cause each Restricted Subsidiary that Guarantees any Indebtedness of the Company or of any other Restricted Subsidiary to execute and deliver to the Trustee a supplemental indenture pursuant to which such Restricted Subsidiary will unconditionally Guarantee, on a joint and several basis with the other Subsidiary Guarantors, the full and prompt payment of the principal of, premium, if any, and interest on the Securities on a senior basis; and

          WHEREAS, pursuant to Section 10.1 of the Indenture, the Trustee, the Company and the Subsidiary Guarantors are authorized to execute and deliver this Supplemental Indenture to amend or supplement the Indenture, without the consent of any Holder;

          NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guarantor, the Company, the other Subsidiary Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Securities as follows:

ARTICLE I

Definitions

          SECTION 1.1 Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term “Holders” in this Guarantee shall refer to the term “Holders” as defined in the Indenture and the Trustee acting on behalf or for the benefit of such Holders. The words “herein,” “hereof” and “hereby” and other words of similar import used in this Supplemental

C-1

Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.

ARTICLE II

Agreement to be Bound; Guarantee

          SECTION 2.1 Agreement to be Bound. The Guarantor hereby becomes a party to the Indenture as a Subsidiary Guarantor and as such will have all of the rights and be subject to all of the obligations and agreements of a Note Guarantor under the Indenture. The Guarantor agrees to be bound by all of the provisions of the Indenture applicable to a Note Guarantor and to perform all of the obligations and agreements of a Note Guarantor under the Indenture.

          SECTION 2.2 Guarantee. The Guarantor agrees, on a joint and several basis with all the existing Note Guarantors, to fully, unconditionally and irrevocably Guarantee to each Holder of the Securities and the Trustee the Guarantor Obligations pursuant to Article X of the Indenture on a senior basis.

ARTICLE III

Miscellaneous

          SECTION 3.1 Notices. All notices and other communications to the Guarantor shall be given as provided in the Indenture to the Guarantor, at its address set forth below, with a copy to the Company as provided in the Indenture for notices to the Company.

          SECTION 3.2 Parties. Nothing expressed or mentioned herein is intended or shall be construed to give any Person, firm or corporation, other than the Holders and the Trustee, any legal or equitable right, remedy or claim under or in respect of this Supplemental Indenture or the Indenture or any provision herein or therein contained.

          SECTION 3.3 Governing Law. This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.

          SECTION 3.4 Ratification of Indenture; Supplemental Indenture Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Securities heretofore or hereafter authenticated and delivered shall be bound hereby. The Trustee makes no representation or warranty as to the validity or sufficiency of this Supplemental Indenture.

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          SECTION 3.5 Counterparts. The parties hereto may sign one or more copies of this Supplemental Indenture in counterparts, all of which together shall constitute one and the same agreement.

          SECTION 3.6 Headings. The headings of the Articles and the Sections in this Guarantee are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

          SECTION 3.7 Trustee. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture. The recitals and statements herein are deemed to be those of the Guarantor and not of the Trustee.

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          IN WITNESS WHEREOF, the parties hereto have caused the Indenture to be duly executed as of the date first above written.

[SECURITIES GUARANTOR],
as a Guarantor
By:
	Name:
	Title:
	[Address]
THE BANK OF NEW YORK TRUST
COMPANY, N.A.
as Trustee
By:
	Name:
	Title:
LIBBEY GLASS INC.
By:
	Name:
	Title:
[EXISTING GUARANTORS]
By:
	Name:
	Title:

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EX-4.4

EXHIBIT 4.4

EXECUTION VERSION

REGISTRATION RIGHTS AGREEMENT

          This REGISTRATION RIGHTS AGREEMENT dated June 16, 2006 (the “Agreement”) is entered into by and among Libbey Glass Inc., a Delaware corporation (the “Company”), Libbey Inc., a Delaware Corporation (the “Parent Guarantor”) the guarantors listed in Schedule 1 hereto (together with the Parent Guarantor, the “Guarantors”), and J.P. Morgan Securities Inc. (“JPMorgan”), Bear, Stearns & Co. Inc., and BNY Capital Markets, Inc. (collectively, the “Initial Purchasers”).

          The Company, the Guarantors and the Initial Purchasers are parties to the Purchase Agreement dated June 9, 2006 (the “Purchase Agreement”), which provides for the sale by the Company to the Initial Purchasers of $306,000,000 aggregate principal amount of the Company’s Floating Rate Senior Secured Notes due 2011 (the “Securities”), which will be guaranteed on a senior secured basis by each of the Guarantors. As an inducement to the Initial Purchasers to enter into the Purchase Agreement, the Company and the Guarantors have agreed to provide to the Initial Purchasers and their direct and indirect transferees the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the closing under the Purchase Agreement.

          In consideration of the foregoing, the parties hereto agree as follows:

          1. Definitions. As used in this Agreement, the following terms shall have the following meanings:

          “Additional Guarantor” shall mean any subsidiary of the Company that executes a Subsidiary Guarantee under the Indenture after the date of this Agreement.

          “Business Day” shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed.

          “Company” shall have the meaning set forth in the preamble and shall also include the Company’s successors.

          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time and the rules and regulations promulgated thereunder.

          “Exchange Dates” shall have the meaning set forth in Section 2(a)(ii) hereof.

          “Exchange Offer” shall mean the exchange offer by the Company and the Guarantors of Exchange Securities for Registrable Securities pursuant to Section 2(a) hereof.

          “Exchange Offer Registration” shall mean a registration under the Securities Act effected pursuant to Section 2(a) hereof.

          “Exchange Offer Registration Statement” shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to such registration statement, in each case including the Prospectus contained therein or deemed a part thereof, all exhibits thereto and any document incorporated by reference therein.

          “Exchange Securities” shall mean senior notes issued by the Company and guaranteed by the Guarantors under the Indenture containing terms identical to the Securities (except that the Exchange Securities will not be subject to restrictions on transfer or to any increase in annual interest rate for failure to comply with this Agreement) and to be offered to Holders of Securities in exchange for Securities pursuant to the Exchange Offer.

          “Free Writing Prospectus” means each free writing prospectus (as defined in Rule 405 under the Securities Act) prepared by or on behalf of the Company or used or referred to by the Company in connection with the sale of the Securities.

          “Guarantees” shall mean the guarantees of the Securities and Exchange Securities by the Guarantors under the Indenture.

          “Guarantors” shall have the meaning set forth in the preamble and shall also include any Guarantor’s successors and any Additional Guarantors.

          “Holders” shall mean the Initial Purchasers, for so long as they own any Registrable Securities, and each of their successors, assigns and direct and indirect transferees who become owners of Registrable Securities under the Indenture; provided that for purposes of Sections 4 and 5 of this Agreement, the term “Holders” shall include Participating Broker-Dealers.

          “Indemnified Person” shall have the meaning set forth in Section 5(c) hereof.

          “Indemnifying Person” shall have the meaning set forth in Section 5(c) hereof.

          “Indenture” shall mean the Indenture relating to the Securities dated as of June 16, 2006 among the Company, the Guarantors and The Bank of New York

Trust Company, N.A., as trustee, and as the same may be amended from time to time in accordance with the terms thereof.

          “Initial Purchasers” shall have the meaning set forth in the preamble.

          “Inspector” shall have the meaning set forth in Section 3(a)(xiii) hereof.

          “Issuer Information” shall have the meaning set forth in Section 5(a) hereof.

          “JPMorgan” shall have the meaning set forth in the preamble.

          “Majority Holders” shall mean the Holders of a majority of the aggregate principal amount of the outstanding Registrable Securities; provided that whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, any Registrable Securities owned directly or indirectly by the Company or any of its affiliates shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage or amount; and provided, further, that if the Company shall issue any additional Securities under the Indenture prior to consummation of the Exchange Offer or, if applicable, the effectiveness of any Shelf Registration Statement, such additional Securities and the Registrable Securities to which this Agreement relates shall be treated together as one class for purposes of determining whether the consent or approval of Holders of a specified percentage of Registrable Securities has been obtained.

          “Participating Broker-Dealers” shall have the meaning set forth in Section 4(a) hereof.

          “Person” shall mean an individual, partnership, limited liability company, corporation, joint venture, association, trust or unincorporated organization, or a government or agency or political subdivision thereof.

          “Prospectus” shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to such prospectus, and in each case including any document incorporated by reference therein.

          “Purchase Agreement” shall have the meaning set forth in the preamble.

          “Registrable Securities” shall mean the Securities; provided that the Securities shall cease to be Registrable Securities (i) when a Registration Statement with respect to such Securities has become effective under the

Securities Act and such Securities have been exchanged or disposed of pursuant to such Registration Statement, (ii) when such Securities are sold pursuant to Rule 144 under the Securities Act under circumstances in which any legend borne by such Securities relating to restrictions on transferability thereof is removed or such Securities are eligible to be sold pursuant to Rule 144(k) (or any similar provision then in force, but not Rule 144A) under the Securities Act or (iii) when such Securities cease to be outstanding.

          “Registration Expenses” shall mean any and all expenses incident to performance of or compliance by the Company and the Guarantors with this Agreement, including without limitation: (i) all SEC, stock exchange or National Association of Securities Dealers, Inc. registration and filing fees, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws (including reasonable fees and disbursements of counsel for any Underwriters or Holders in connection with blue sky qualification of any Exchange Securities or Registrable Securities), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus and any amendments or supplements thereto, any underwriting agreements, securities sales agreements or other similar agreements, the certificates and any other documents relating to the performance of and compliance with this Agreement, (iv) all rating agency fees, (v) all fees and disbursements relating to the qualification of the Indenture under applicable securities laws, (vi) the fees and disbursements of the Trustee and its counsel, (vii) the fees and disbursements of counsel for the Company and the Guarantors and, in the case of a Shelf Registration Statement, the fees and disbursements of one counsel for the Holders (which counsel shall be selected by the Majority Holders and which counsel may also be counsel for the Initial Purchasers) and (viii) the fees and disbursements of the independent public accountants of the Company and the Guarantors, including the expenses of any special audits or “comfort” letters required by or incident to the performance of and compliance with this Agreement, but excluding fees and expenses of counsel to the Underwriters (other than fees and expenses set forth in clause (ii) above) or the Holders and underwriting discounts and commissions, brokerage commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder.

          “Registration Statement” shall mean any registration statement of the Company and the Guarantors that covers any of the Exchange Securities or Registrable Securities pursuant to the provisions of this Agreement and all amendments and supplements to any such registration statement, including post-effective amendments, in each case including the Prospectus contained therein or deemed a part thereof, all exhibits thereto and any document incorporated by reference therein.

          “SEC” shall mean the United States Securities and Exchange Commission.

          “Securities” shall have the meaning set forth in the preamble.

          “Securities Act” shall mean the Securities Act of 1933, as amended from time to time and the rules and regulations promulgated thereunder.

          “Shelf Additional Interest Date” shall have the meaning set forth in Section 2(d) hereof.

          “Shelf Effectiveness Period” shall have the meaning set forth in Section 2(b) hereof.

          “Shelf Registration” shall mean a registration effected pursuant to Section 2(b) hereof.

          “Shelf Registration Statement” shall mean a “shelf” registration statement of the Company and the Guarantors that covers all or a portion of the Registrable Securities (but no other securities unless approved by a majority of the Holders whose Registrable Securities are to be covered by such Shelf Registration Statement) on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein or deemed a part thereof, all exhibits thereto and any document incorporated by reference therein.

          “Shelf Request” shall have the meaning set forth in Section 2(b) hereof.

          “Staff” shall mean the staff of the SEC.

          “Target Registration Date” shall have the meaning set forth in Section 2(d) hereof.

          “Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended from time to time.

          “Trustee” shall mean the trustee with respect to the Securities under the Indenture.

          “Underwriter” shall have the meaning set forth in Section 3(e) hereof.

          “Underwritten Offering” shall mean an offering in which Registrable Securities are sold to an Underwriter for reoffering to the public.

          2. Registration Under the Securities Act. (a) To the extent not prohibited by any applicable law or applicable interpretations of the Staff, the

Company and the Guarantors shall use their commercially reasonable efforts to (i) cause to be filed an Exchange Offer Registration Statement covering an offer to the Holders to exchange all the Registrable Securities for Exchange Securities and (ii) have such Registration Statement remain effective until 90 days after the last Exchange Date for use by one or more Participating Broker-Dealers. The Company and the Guarantors shall commence the Exchange Offer promptly after the Exchange Offer Registration Statement is declared effective by the SEC and use their reasonable best efforts to complete the Exchange Offer not later than 60 days after such effective date.

          The Company and the Guarantors shall commence the Exchange Offer by mailing the related Prospectus, appropriate letters of transmittal and other accompanying documents to each Holder stating, in addition to such other disclosures as are required by applicable law, substantially the following:

(i)	that the Exchange Offer is being made pursuant to this Agreement and that all Registrable Securities validly tendered and not properly withdrawn will be accepted for exchange;
(ii)	the dates of acceptance for exchange (which shall be a period of at least 20 Business Days from the date such notice is mailed) (the “Exchange Dates”);
(iii)	that any Registrable Security not tendered will remain outstanding and continue to accrue interest but will not retain any rights under this Agreement, except as otherwise specified herein;
(iv)	that any Holder electing to have a Registrable Security exchanged pursuant to the Exchange Offer will be required to (A) surrender such Registrable Security, together with the appropriate letters of transmittal, to the institution and at the address (located in the Borough of Manhattan, The City of New York) and in the manner specified in the notice, or (B) effect such exchange otherwise in compliance with the applicable procedures of the depositary for such Registrable Security, in each case prior to the close of business on the last Exchange Date; and
(v)	that any Holder will be entitled to withdraw its election, not later than the close of business on the last Exchange Date, by (A) sending to the institution and at the address (located in the Borough of Manhattan, The City of New York) specified in the notice, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Registrable Securities delivered for exchange and a statement that such Holder is withdrawing its election to have such Securities exchanged or (B) effecting such withdrawal in compliance with the applicable procedures of the depositary for the Registrable Securities.

          As a condition to participating in the Exchange Offer, a Holder will be required to represent to the Company and the Guarantors that (i) any Exchange Securities to be received by it will be acquired in the ordinary course of its business, (ii) at the time of the commencement of the Exchange Offer it has no arrangement or understanding with any Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Securities in violation of the provisions of the Securities Act, (iii) it is not an “affiliate” (within the meaning of Rule 405 under the Securities Act) of the Company or any Guarantor and (iv) if such Holder is a broker-dealer that will receive Exchange Securities for its own account in exchange for Registrable Securities that were acquired as a result of market-making or other trading activities, then such Holder will comply with the prospectus delivery requirements of the Securities Act in connection with any resale of such Exchange Securities.

          As soon as practicable after the last Exchange Date, the Company and the Guarantors shall:

(i)	accept for exchange Registrable Securities or portions thereof validly tendered and not properly withdrawn pursuant to the Exchange Offer; and
(ii)	deliver, or cause to be delivered, to the Trustee for cancellation all Registrable Securities or portions thereof so accepted for exchange by the Company and issue, and cause the Trustee to promptly authenticate and deliver to each Holder, Exchange Securities equal in principal amount to the principal amount of the Registrable Securities tendered by such Holder.

          The Company and the Guarantors shall use their respective commercially reasonable efforts to complete the Exchange Offer as provided above and shall cause the Exchange Offer to comply with the applicable requirements of the Securities Act, the Exchange Act and other applicable federal and state securities laws and regulations in connection with the Exchange Offer. The Exchange Offer shall not be subject to any conditions, other than that the Exchange Offer does not violate any applicable law or applicable interpretations of the Staff.

          (b) In the event that (i) the Company and the Guarantors determine that the Exchange Offer Registration provided for in Section 2(a) above is not available or may not be completed as soon as practicable after the last Exchange Date because it would violate any applicable law or applicable interpretations of the Staff, (ii) the Exchange Offer is not for any other reason completed by March 13, 2007 or (iii) upon receipt of a written request (a “Shelf Request”) from any Initial Purchaser prior to the 90^th Business Day after the Exchange Offer Registration Statement is declared effective representing that it holds Registrable Securities that are or were ineligible to be exchanged in the Exchange Offer, the Company and the Guarantors shall use their respective commercially reasonable

efforts to cause to be filed as soon as practicable after such determination, date or Shelf Request, as the case may be, a Shelf Registration Statement providing for the sale of all the Registrable Securities by the Holders thereof and to have such Shelf Registration Statement become effective.

          In the event that the Company and the Guarantors are required to file a Shelf Registration Statement pursuant to clause (iii) of the preceding sentence, the Company and the Guarantors shall use their respective commercially reasonable efforts to file and have become effective both an Exchange Offer Registration Statement pursuant to Section 2(a) with respect to all Registrable Securities and a Shelf Registration Statement (which may be a combined Registration Statement with the Exchange Offer Registration Statement) with respect to offers and sales of Registrable Securities held by the Initial Purchasers after completion of the Exchange Offer.

          The Company and the Guarantors agree to use their reasonable best efforts to keep the Shelf Registration Statement continuously effective until the expiration of the period referred to in Rule 144(k) (or any similar rule then in force, but not Rule 144A) under the Securities Act with respect to the Registrable Securities or such shorter period that will terminate when all the Registrable Securities covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement (the “Shelf Effectiveness Period”). The Company and the Guarantors further agree to supplement or amend the Shelf Registration Statement and the related Prospectus if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the Securities Act or by any other rules and regulations thereunder or if reasonably requested by a Holder of Registrable Securities with respect to information relating to such Holder, and to use their respective commercially reasonable efforts to cause any such amendment to become effective, if required, and such Shelf Registration Statement and Prospectus to become usable as soon as thereafter practicable. The Company and the Guarantors agree to furnish to the Holders of Registrable Securities copies of any such supplement or amendment prior to or promptly after its being used or filed with the SEC.

          (c) The Company and the Guarantors shall pay all Registration Expenses in connection with any registration pursuant to Section 2(a) or Section 2(b) hereof. Each Holder shall pay all underwriting discounts and commissions, brokerage commissions and transfer taxes, if any, attributable to the sale or disposition of such Holder’s Registrable Securities pursuant to the Shelf Registration Statement.

          (d) An Exchange Offer Registration Statement pursuant to Section 2(a) hereof will not be deemed to have become effective unless it has been declared effective by the SEC. A Shelf Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective unless it has been declared

effective by the SEC or is automatically effective upon filing with the SEC as provided by Rule 462 under the Securities Act.

          In the event that either the Exchange Offer is not completed or the Shelf Registration Statement, if required pursuant to Section 2(b)(i) or 2(b)(ii) hereof, has not become effective on or prior to March 13, 2007 (the “Target Registration Date”), the interest rate on the Registrable Securities will be increased by (i) 0.25% per annum for the first 90-day period immediately following the Target Registration Date and (ii) an additional 0.25% per annum with respect to each subsequent 90-day period, in each case until the Exchange Offer is completed or the Shelf Registration Statement, if required hereby, becomes effective or the Securities become freely tradable under the Securities Act, up to a maximum increase of 1.00% per annum. In the event that the Company receives a Shelf Request pursuant to Section 2(b)(iii), and the Shelf Registration Statement required to be filed thereby has not become effective by the later of (x) February 11, 2007 or (y) 90 days after delivery of such Shelf Request (such later date, the “Shelf Additional Interest Date”), then the interest rate on the Registrable Securities will be increased by (i) 0.25% per annum for the first 90-day period payable commencing from one day after the Shelf Additional Interest Date and (ii) an additional 0.25% per annum with respect to each subsequent 90-day period, in each case until the Shelf Registration Statement becomes effective or the Securities become freely tradable under the Securities Act, up to a maximum increase of 1.00% per annum.

          If the Shelf Registration Statement, if required hereby, has become effective and thereafter either ceases to be effective or the Prospectus contained therein ceases to be usable, in each case whether or not permitted by this Agreement, at any time during the Shelf Effectiveness Period, and such failure to remain effective or usable exists for more than 30 days (whether or not consecutive) in any 12-month period, then the interest rate on the Registrable Securities will be increased by (i) 0.25% per annum for the first 90-day period commencing on the 31^st day in such 12-month period and (ii) an additional 0.25% per annum with respect to each subsequent 90-day period and ending, in the case of clauses (i) and (ii), on such date that the Shelf Registration Statement has again become effective or the Prospectus again becomes usable, up to a maximum increase of 1.00% per annum.

          (e) Without limiting the remedies available to the Initial Purchasers and the Holders, the Company and the Guarantors acknowledge that any failure by the Company or the Guarantors to comply with their obligations under Section 2(a) and Section 2(b) hereof may result in material irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to specifically enforce the Company’s and the Guarantors’ obligations under Section 2(a) and Section 2(b) hereof.

          (f) The Company represents, warrants and covenants that it (including its agents and representatives) will not prepare, make, use, authorize, approve or refer to any “written communication” (as defined in Rule 405 under the Securities Act), other than any communication pursuant to Rule 134 under the Securities Act, any document constituting an offer to sell or solicitation of an offer to buy the Securities or the Exchange Securities that falls within the exception from the definition of prospectus in Section 2(a)(10)(a) of the Securities Act or a prospectus satisfying the requirements of section 10(a) of the Securities Act or of Rule 430, Rule 430A, Rule 430B, Rule 430C or Rule 431 under the Securities Act.

          3. Registration Procedures. (a) In connection with their obligations pursuant to Section 2(a) and Section 2(b) hereof, the Company and the Guarantors shall:

          (i) prepare and file with the SEC a Registration Statement on the appropriate form under the Securities Act, which form (x) shall be selected by the Company and the Guarantors and (y) shall, in the case of a Shelf Registration, be available for the sale of the Registrable Securities by the Holders thereof; and use their respective commercially reasonable efforts to cause such Registration Statement to become effective and remain effective for the applicable period in accordance with Section 2 hereof and to provide all financial statements required by the SEC to be filed therewith;

          (ii) prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period in accordance with Section 2 hereof and cause each Prospectus to be supplemented by any required prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424 under the Securities Act; and keep each Prospectus current during the period described in Section 4(3) of and Rule 174 under the Securities Act that is applicable to transactions by brokers or dealers with respect to the Registrable Securities or Exchange Securities;

          (iii) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities, to counsel for the Initial Purchasers, to counsel for such Holders and to each Underwriter of an Underwritten Offering of Registrable Securities, if any, without charge, as many copies of each Prospectus or preliminary prospectus, and any amendment or supplement thereto, as such Holder, counsel or Underwriter may reasonably request in order to facilitate the sale or other disposition of the Registrable Securities thereunder; and the Company and the Guarantors consent to the use of such Prospectus, preliminary prospectus and any amendment or supplement thereto (in accordance with applicable law) by each of the Holders of Registrable Securities and any such Underwriters in connection with the offering and sale of the Registrable

Securities covered by and in the manner described in such Prospectus, preliminary prospectus or any amendment or supplement thereto;

          (iv) use their respective commercially reasonable efforts to register or qualify the Registrable Securities under all applicable state securities or blue sky laws of such jurisdictions as any Holder of Registrable Securities covered by a Registration Statement shall reasonably request in writing by the time the applicable Registration Statement becomes effective; cooperate with such Holders in connection with any filings required to be made with the National Association of Securities Dealers, Inc.; and do any and all other acts and things that may be reasonably necessary or advisable to enable each Holder to complete the disposition in each such jurisdiction of the Registrable Securities owned by such Holder; provided that neither the Company nor any Guarantor shall be required to (1) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (2) file any general consent to service of process in any such jurisdiction or (3) subject itself to taxation in any such jurisdiction if it is not so subject;

          (v) notify counsel for the Initial Purchasers and, in the case of a Shelf Registration, notify each Holder of Registrable Securities and counsel for such Holders promptly and, if requested by any such Holder or counsel, confirm such advice in writing (1) when a Registration Statement has become effective, when any post-effective amendment thereto has been filed and becomes effective and when any amendment or supplement to the Prospectus has been filed, (2) of any request by the SEC or any state securities authority for amendments and supplements to a Registration Statement or Prospectus or for additional information after the Registration Statement has become effective, (3) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, including the receipt by the Company of any notice of objection of the SEC to the use of a Shelf Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act, (4) if, between the applicable effective date of a Shelf Registration Statement and the closing of any sale of Registrable Securities covered thereby, the representations and warranties of the Company or any Guarantor contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to an offering of such Registrable Securities cease to be true and correct in all material respects or if the Company or any Guarantor receives any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, (5) of the existence of any fact or the happening of any event during the period a Registration Statement is effective that makes any statement of a material fact made in the Registration Statement, the related Prospectus, any amendment or supplement thereto or any document incorporated by reference therein untrue, or that requires the making of any

additions to or changes in the Registration Statement in order to make the statements therein not misleading, or that requires the making of any additions to or changes in the Prospectus in order to make the statements therein, in light of circumstances under which they were made, not misleading and (6) of any determination by the Company or any Guarantor that a post-effective amendment to a Registration Statement or any amendment or supplement to the Prospectus would be appropriate;

          (vi) use their respective commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement or, in the case of a Shelf Registration, the resolution of any objection of the SEC pursuant to Rule 401(g)(2), including by filing an amendment to such Shelf Registration Statement on the proper form, at the earliest possible moment and provide immediate notice to each Holder of the withdrawal of any such order or such resolution;

          (vii) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities, upon their request and without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto (without any documents incorporated therein by reference or exhibits thereto, unless requested);

          (viii) in the case of a Shelf Registration, cooperate with the Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends and enable such Registrable Securities to be issued in such denominations and registered in such names (consistent with the provisions of the Indenture) as such Holders may reasonably request at least two Business Days prior to the closing of any sale of Registrable Securities;

          (ix) in conjunction with Section 3(a)(i), in the case of a Shelf Registration, upon the occurrence of any event contemplated by Section 3(a)(v)(5) hereof, use their reasonable best efforts to prepare and file with the SEC a supplement or post-effective amendment to such Shelf Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered (or, to the extent permitted by law, made available) to purchasers of the Registrable Securities, such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and the Company and the Guarantors shall notify the Holders of Registrable Securities to suspend use of the Prospectus as promptly as practicable after the occurrence of such an event, and such Holders hereby agree to suspend use of the Prospectus until the Company and the Guarantors have amended or supplemented the Prospectus to correct such misstatement or omission;

          (x) three Business Days prior to the filing of any Registration Statement, any Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus or of any document that is to be incorporated by reference into a Registration Statement or a Prospectus after initial filing of a Registration Statement, provide copies of such document to the Initial Purchasers and their counsel (and, in the case of a Shelf Registration Statement, to the Holders of Registrable Securities and their counsel) and make such of the representatives of the Company and the Guarantors as shall be reasonably requested by the Initial Purchasers or their counsel (and, in the case of a Shelf Registration Statement, the Holders of Registrable Securities or their counsel) available for discussion of such document; and the Company and the Guarantors shall not, at any time after initial filing of a Registration Statement, use or file any Prospectus or any amendment of or supplement to a Registration Statement or a Prospectus, of which the Initial Purchasers and their counsel (and, in the case of a Shelf Registration Statement, the Holders of Registrable Securities and their counsel) shall not have previously been advised and furnished a copy or to which the Initial Purchasers or their counsel (and, in the case of a Shelf Registration Statement, the Holders of Registrable Securities or their counsel) shall object;

          (xi) obtain a CUSIP number for all Exchange Securities or Registrable Securities, as the case may be, not later than the initial effective date of a Registration Statement;

          (xii) cause the Indenture to be qualified under the Trust Indenture Act in connection with the registration of the Exchange Securities or Registrable Securities, as the case may be; cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and execute, and use their reasonable best efforts to cause the Trustee to execute, all documents as may be required to effect such changes and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner;

          (xiii) in the case of a Shelf Registration, make available for inspection by a representative of the Holders of the Registrable Securities (an “Inspector”), any Underwriter participating in any disposition pursuant to such Shelf Registration Statement, any attorneys and accountants designated by a majority of the Holders of Registrable Securities to be included in such Shelf Registration and any attorneys and accountants designated by such Underwriter, at reasonable times and in a reasonable manner, all pertinent financial and other records, documents and properties of the Company and its subsidiaries, and cause the respective officers, directors and employees of the Company and the Guarantors to supply all information reasonably requested by any such Inspector, Underwriter, attorney or accountant in connection with a Shelf Registration Statement; provided that if any such information is identified by the Company or

any Guarantor as being confidential or proprietary, each Person receiving such information shall take such actions as are reasonably necessary to protect the confidentiality of such information to the extent such action is otherwise not inconsistent with, an impairment of or in derogation of the rights and interests of any Inspector, Holder or Underwriter);

          (xiv) in the case of a Shelf Registration, use their respective commercially reasonable efforts to cause all Registrable Securities to be listed on any securities exchange or any automated quotation system on which similar securities issued or guaranteed by the Company or any Guarantor are then listed if requested by the Majority Holders, to the extent such Registrable Securities satisfy applicable listing requirements;

          (xv) if reasonably requested by any Holder of Registrable Securities covered by a Shelf Registration Statement, promptly include in a Prospectus supplement or post-effective amendment such information with respect to such Holder as such Holder reasonably requests to be included therein and make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the matters to be so included in such filing;

          (xvi) in the case of a Shelf Registration, enter into such customary agreements and take all such other actions in connection therewith (including those requested by the Holders of a majority in principal amount of the Registrable Securities covered by the Shelf Registration Statement) in order to expedite or facilitate the disposition of such Registrable Securities including, but not limited to, an Underwritten Offering and in such connection, (1) to the extent possible, make such representations and warranties to the Holders and any Underwriters of such Registrable Securities with respect to the business of the Company and its subsidiaries and the Registration Statement, Prospectus and documents incorporated by reference or deemed incorporated by reference, if any, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings and confirm the same if and when requested, (2) obtain opinions of counsel to the Company and the Guarantors (which counsel and opinions, in form, scope and substance, shall be reasonably satisfactory to the Holders and such Underwriters and their respective counsel) addressed to each selling Holder and Underwriter of Registrable Securities, covering the matters customarily covered in opinions requested in underwritten offerings, (3) obtain “comfort” letters from the independent certified public accountants of the Company and the Guarantors (and, if necessary, any other certified public accountant of any subsidiary of the Company or any Guarantor, or of any business acquired by the Company or any Guarantor for which financial statements and financial data are or are required to be included in the Registration Statement) addressed to each selling Holder (to the extent permitted by applicable professional standards) and Underwriter of Registrable Securities, such letters to be in customary form and covering matters

of the type customarily covered in “comfort” letters in connection with underwritten offerings, including but not limited to financial information contained in any preliminary prospectus or Prospectus and (4) deliver such documents and certificates as may be reasonably requested by the Holders of a majority in principal amount of the Registrable Securities being sold or the Underwriters, and which are customarily delivered in underwritten offerings, to evidence the continued validity of the representations and warranties of the Company and the Guarantors made pursuant to clause (1) above and to evidence compliance with any customary conditions contained in an underwriting agreement; and

          (xvii) so long as any Registrable Securities remain outstanding, cause each Additional Guarantor upon the creation or acquisition by the Company of such Additional Guarantor, to execute a counterpart to this Agreement in the form attached hereto as Annex A and to deliver such counterpart, together with an opinion of counsel as to the enforceability thereof against such entity, to the Initial Purchasers no later than five Business Days following the execution thereof.

          (b) In the case of a Shelf Registration Statement, the Company may require each Holder of Registrable Securities to furnish to the Company such information regarding such Holder and the proposed disposition by such Holder of such Registrable Securities as the Company and the Guarantors may from time to time reasonably request in writing.

          (c) In the case of a Shelf Registration Statement, each Holder of Registrable Securities covered in such Shelf Registration Statement agrees that, upon receipt of any notice from the Company and the Guarantors of the happening of any event of the kind described in Section 3(a)(v)(3) or 3(a)(v)(5) hereof, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to the Shelf Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(a)(ix) hereof and, if so directed by the Company and the Guarantors, such Holder will deliver to the Company and the Guarantors all copies in its possession, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Registrable Securities that is current at the time of receipt of such notice.

          (d) If the Company and the Guarantors shall give any notice pursuant to Section 3(c) hereof to suspend the disposition of Registrable Securities pursuant to a Shelf Registration Statement, the Company and the Guarantors shall extend the period during which such Shelf Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date when the Holders of such Registrable Securities shall have received copies of the supplemented or amended Prospectus necessary to resume such dispositions. The Company and the Guarantors may give any such

notice only twice during any 365-day period and any such suspensions shall not exceed 30 days for each suspension and there shall not be more than two suspensions in effect during any 365-day period, provided that this limitation shall not apply if two such suspensions during any 365-day period have been effected due to events set forth in Section 3(a)(v)(3).

          (e) The Holders of Registrable Securities covered by a Shelf Registration Statement who desire to do so may sell such Registrable Securities in an Underwritten Offering. In any such Underwritten Offering, the investment bank or investment banks and manager or managers (each an “Underwriter”) that will administer the offering will be selected by the Holders of a majority in principal amount of the Registrable Securities included in such offering.

          4. Participation of Broker-Dealers in Exchange Offer. (a) The Staff has taken the position that any broker-dealer that receives Exchange Securities for its own account in the Exchange Offer in exchange for Securities that were acquired by such broker-dealer as a result of market-making or other trading activities (a “Participating Broker-Dealer”) may be deemed to be an “underwriter” within the meaning of the Securities Act and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Securities.

          The Company and the Guarantors understand that it is the Staff’s position that if the Prospectus contained in the Exchange Offer Registration Statement includes a plan of distribution containing a statement to the above effect and the means by which Participating Broker-Dealers may resell the Exchange Securities, without naming the Participating Broker-Dealers or specifying the amount of Exchange Securities owned by them, such Prospectus may be delivered by Participating Broker-Dealers (or, to the extent permitted by law, made available to purchasers) to satisfy their prospectus delivery obligation under the Securities Act in connection with resales of Exchange Securities for their own accounts, so long as the Prospectus otherwise meets the requirements of the Securities Act.

          (b) In light of the above and notwithstanding the other provisions of this Agreement, to the extent necessary to ensure that the Prospectus contained in the Exchange Offer Registration Statement is available for sales of Exchange Securities by Participating Broker-Dealers, the Company and the Guarantors agree to use all of their respective commercially reasonable efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented, amended and current as required by and in conformity with the requirements of this Agreement, the Securities Act and the policies, rules and regulations of the SEC as announced from time to time, for a period of up to 180 days after the last Exchange Date. The Company and the Guarantors further agree that Participating Broker-Dealers shall be authorized to deliver such Prospectus (or,

to the extent permitted by law, make available) during such period in connection with the resales contemplated by this Section 4.

          5. Indemnification and Contribution. (a) The Company and each Guarantor, jointly and severally, agree to indemnify and hold harmless each Initial Purchaser and each Holder, their respective affiliates, directors and officers and each Person, if any, who controls any Initial Purchaser or any Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, (1) any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading or (2) any untrue statement or alleged untrue statement of a material fact contained in any Prospectus, any Free Writing Prospectus used in violation of this Agreement or any “issuer information” (“Issuer Information”) filed or required to be filed pursuant to Rule 433(d) under the Securities Act, or any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Initial Purchaser or information relating to any Holder furnished to the Company in writing through JPMorgan or any selling Holder, respectively expressly for use therein. In connection with any Underwritten Offering permitted by Section 3, the Company and the Guarantors, jointly and severally, will also indemnify the Underwriters, if any, selling brokers, dealers and similar securities industry professionals participating in the distribution, their respective affiliates and each Person who controls such Persons (within the meaning of the Securities Act and the Exchange Act) to the same extent as provided above with respect to the indemnification of the Holders, if requested in connection with any Registration Statement, any Prospectus, any Free Writing Prospectus or any Issuer Information.

          (b) Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company, the Guarantors, the Initial Purchasers and the other selling Holders, the directors of the Company and the Guarantors, each officer of the Company and the Guarantors who signed the Registration Statement and each Person, if any, who controls the Company, the Guarantors, any Initial Purchaser and any other selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue

statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Holder furnished to the Company in writing by such Holder expressly for use in any Registration Statement and any Prospectus.

          (c) If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such Person (the “Indemnified Person”) shall promptly notify the Person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under this Section 5 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under this Section 5. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 5 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses of such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm (x) for any Initial Purchaser, its affiliates, directors and officers and any control Persons of such Initial Purchaser shall be designated in writing by JPMorgan, (y) for any Holder, its directors and officers and any control Persons of such Holder shall be designated in writing by the Majority Holders and (z) in all other cases shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written

consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (A) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (B) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

          (d) If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors from the offering of the Securities and the Exchange Securities, on the one hand, and by the Holders from receiving Securities or Exchange Securities registered under the Securities Act, on the other hand, or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company and the Guarantors on the one hand and the Holders on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company and the Guarantors on the one hand and the Holders on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors or by the Holders and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

          (e) The Company, the Guarantors and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 5 were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of this Section 5, in no event shall a Holder be required to contribute any amount in excess of the amount by which the total price at which the Securities or Exchange Securities sold by such Holder exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 5(d) and (e) are several and not joint.

          (f) The remedies provided for in this Section 5 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.

          (g) The indemnity and contribution provisions contained in this Section 5 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Initial Purchasers or any Holder or any Person controlling any Initial Purchaser or any Holder, or by or on behalf of the Company or the Guarantors or the officers or directors of or any Person controlling the Company or the Guarantors, (iii) acceptance of any of the Exchange Securities and (iv) any sale of Registrable Securities pursuant to a Shelf Registration Statement.

          6. General.

          (a) No Inconsistent Agreements. The Company and the Guarantors represent, warrant and agree that (i) the rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of any other outstanding securities issued or guaranteed by the Company or any Guarantor under any other agreement, (ii) the Company and the Guarantors will not, or on or after the date of this Agreement enter into, any agreement that is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof and (iii) neither the Company nor any Guarantor has previously entered into any agreement granting any registration rights with respect to their

respective securities to any Person that would require such securities to be included in any Registration Statement filed hereunder.

          (b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company and the Guarantors have obtained the written consent of Holders of at least a majority in aggregate principal amount of the outstanding Registrable Securities affected by such amendment, modification, supplement, waiver or consent; provided that no amendment, modification, supplement, waiver or consent to any departure from the provisions of Section 5 hereof shall be effective as against any Holder of Registrable Securities unless consented to in writing by such Holder. Any amendments, modifications, supplements, waivers or consents pursuant to this Section 6(b) shall be by a writing executed by each of the parties hereto.

          (c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telex, telecopier, or any courier guaranteeing overnight delivery (i) if to a Holder, at the most current address given by such Holder to the Company by means of a notice given in accordance with the provisions of this Section 6(c), which address initially is, with respect to the Initial Purchasers, the address set forth in the Purchase Agreement; (ii) if to the Company and the Guarantors, initially at the Company’s address set forth in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 6(c); and (iii) to such other persons at their respective addresses as provided in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 6(c). All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the next Business Day if timely delivered to an air courier guaranteeing overnight delivery. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee, at the address specified in the Indenture.

          (d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Registrable Securities in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all the terms of this Agreement, and by taking and holding such

Registrable Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such Person shall be entitled to receive the benefits hereof. The Initial Purchasers (in their capacity as Initial Purchasers) shall have no liability or obligation to the Company or the Guarantors with respect to any failure by a Holder to comply with, or any breach by any Holder of, any of the obligations of such Holder under this Agreement.

          (e) Third Party Beneficiaries. Each Holder shall be a third party beneficiary to the agreements made hereunder between the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights or the rights of other Holders hereunder.

          (f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

          (g) Headings. The headings in this Agreement are for convenience of reference only, are not a part of this Agreement and shall not limit or otherwise affect the meaning hereof.

          (h) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

          (j) Entire Agreement; Severability. This Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all oral statements and prior writings with respect thereto. If any term, provision, covenant or restriction contained in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the remainder of the terms, provisions, covenants and restrictions contained herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated. The Company, the Guarantors and the Initial Purchasers shall endeavor in good faith negotiations to replace the invalid, void or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, void or unenforceable provisions.

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

LIBBEY GLASS INC.
By:	/s/ Scott Sellick
Name: Scott Sellick
Title:   Vice President and Chief Financial Officer
LIBBEY INC.
By:	/s/ Scott Sellick
Name: Scott Sellick
Title:   Vice President and Chief Financial Officer
SYRACUSE CHINA COMPANY
WORLD TABLEWARE INC.
LGA4 CORP.
LGA3 CORP.
THE DRUMMOND GLASS
COMPANY
LGC CORP.
TRAEX COMPANY
LIBBEY.COM LLC
LGFS INC.
LGAC LLC
CRISA INDUSTRIAL, L.L.C.
By:	/s/ Scott Sellick
Name: Scott Sellick
Title:   Vice President and Chief Financial Officer

Confirmed and accepted as of the date first above written:

J.P. MORGAN SECURITIES INC.

For itself and on behalf of the
  several Initial Purchasers

By	/s/ Geoffrey Benson
	Authorized Signatory

SCHEDULE 1—LIST OF GUARANTORS

Libbey Inc.
Syracuse China Company
World Tableware Inc.
LGA4 Corp.
LGA3 Corp.
The Drummond Glass Company
LGC Corp.
Traex Company
Libbey.com LLC
LGFS Inc.
LGAC LLC
CRISA INDUSTRIAL, L.L.C.

Annex A

Counterpart to Registration Rights Agreement

     The undersigned hereby absolutely, unconditionally and irrevocably agrees as a Guarantor (as defined in the Registration Rights Agreement, dated as of June 16, 2006 by and among the Company, a Delaware corporation, the guarantors party thereto and J.P. Morgan Securities Inc., on behalf of itself and the other Initial Purchasers) to be bound by the terms and provisions of such Registration Rights Agreement.

     IN WITNESS WHEREOF, the undersigned has executed this counterpart as of                     .

[NAME]
By:
	NAME:
	TITLE:

EX-4.5

EXHIBIT 4.5

EXECUTION VERSION

LIBBEY GLASS INC.

AND

MERRILL LYNCH PCG, INC.

16% Senior Subordinated Pay-In-Kind Notes due 2011

INDENTURE

Dated as of June 16, 2006

Table of Contents

		Page
	ARTICLE I
	DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1.	Definitions		1
SECTION 1.2.	Other Definitions		35
SECTION 1.3.	Incorporation by Reference of Trust Indenture Act		36
SECTION 1.4.	Rules of Construction		36
	ARTICLE II
	THE SECURITIES
SECTION 2.1.	Form, Dating and Terms		37
SECTION 2.2.	Execution and Authentication		40
SECTION 2.3.	Registrar and Paying Agent		41
SECTION 2.4.	Paying Agent to Hold Money in Trust		41
SECTION 2.5.	Holder Lists		42
SECTION 2.6.	Transfer and Exchange		42
SECTION 2.7.	Form of Certificate to be Delivered in Connection with Transfers		44
SECTION 2.8.	Mutilated, Destroyed, Lost or Stolen Securities		45
SECTION 2.9.	Outstanding Securities		46
SECTION 2.10.	Temporary Securities		47
SECTION 2.11.	Cancellation		47
SECTION 2.12.	Payment of Interest; Defaulted Interest		47
SECTION 2.13.	Computation of Interest		48
SECTION 2.14.	CUSIP, Common Code and ISIN Numbers		48
SECTION 2.15.	Original Issue Discount		49
	ARTICLE III
	COVENANTS
SECTION 3.1.	Payment of Securities		49
SECTION 3.2.	Limitation on Indebtedness		49
SECTION 3.3.	Limitation on Restricted Payments		55
SECTION 3.4.	Limitation on Restrictions on Distributions from Restricted Subsidiaries		61
SECTION 3.5.	Limitation on Sales of Assets and Subsidiary Stock		64
SECTION 3.6.	Limitation on Liens		67
SECTION 3.7.	Limitation on Affiliate Transactions		67
SECTION 3.8.	Limitation on Sale of Capital Stock of Restricted Subsidiaries		69
SECTION 3.9.	Limitation on Lines of Business		69
SECTION 3.10.	Change of Control		69
SECTION 3.11.	SEC Reports		71
SECTION 3.12.	Future Subsidiary Guarantors		72

i

		Page
SECTION 3.13.	Maintenance of Office or Agency		72
SECTION 3.14.	Corporate Existence		73
SECTION 3.15.	Payment of Taxes and Other Claims		73
SECTION 3.16.	Payments for Consent		73
SECTION 3.17.	Compliance Certificate		74
SECTION 3.18.	Further Instruments and Acts		74
SECTION 3.19.	Statement by Officers as to Default		74
SECTION 3.20.	Limitation on Layering		75
	ARTICLE IV
	SUCCESSOR COMPANY
SECTION 4.1.	Merger and Consolidation		74
	ARTICLE V
	REDEMPTION OF SECURITIES
SECTION 5.1.	Redemption		78
SECTION 5.2.	Applicability of Article		78
SECTION 5.3.	Election to Redeem; Notice to Trustee		78
SECTION 5.4.	Selection by Trustee of Securities to Be Redeemed		78
SECTION 5.5.	Notice of Redemption		79
SECTION 5.6.	Deposit of Redemption Price		80
SECTION 5.7.	Securities Payable on Redemption Date		80
SECTION 5.8.	Securities Redeemed in Part		80
	ARTICLE VI
	DEFAULTS AND REMEDIES
SECTION 6.1.	Events of Default		80
SECTION 6.2.	Acceleration		83
SECTION 6.3.	Other Remedies		84
SECTION 6.4.	Waiver of Past Defaults		84
SECTION 6.5.	Control by Majority		85
SECTION 6.6.	Limitation on Suits		85
SECTION 6.7.	Rights of Holders to Receive Payment		85
SECTION 6.8.	Collection Suit by Trustee		86
SECTION 6.9.	Trustee May File Proofs of Claim		86
SECTION 6.10.	Priorities		86
SECTION 6.11.	Undertaking for Costs		86
	ARTICLE VII
	TRUSTEE
SECTION 7.1.	Duties of Trustee		87
SECTION 7.2.	Rights of Trustee		88
SECTION 7.3.	Individual Rights of Trustee		89
SECTION 7.4.	Trustee’s Disclaimer		89

ii

		Page
SECTION 7.5.	Notice of Defaults		89
SECTION 7.6.	Reports by Trustee to Holders		90
SECTION 7.7.	Compensation and Indemnity		90
SECTION 7.8.	Appointment and Replacement of Trustee		91
SECTION 7.9.	Successor Trustee by Merger		92
SECTION 7.10.	Eligibility; Disqualification		92
SECTION 7.11.	Preferential Collection of Claims Against the Company		92
SECTION 7.12.	Trustee’s Application for Instruction from the Company		92
SECTION 7.13.	Paying Agents		93
	ARTICLE VIII
	DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1.	Discharge of Liability on Securities; Defeasance		93
SECTION 8.2.	Conditions to Defeasance		95
SECTION 8.3.	Application of Trust Money		95
SECTION 8.4.	Repayment to the Company		96
SECTION 8.5.	Indemnity for U.S. Government Obligations		97
SECTION 8.6.	Reinstatement		97
	ARTICLE IX
	AMENDMENTS
SECTION 9.1.	Without Consent of Holders		97
SECTION 9.2.	With Consent of Holders		98
SECTION 9.3.	Compliance with Trust Indenture Act		100
SECTION 9.4.	Revocation and Effect of Consents and Waivers		100
SECTION 9.5.	Notation on or Exchange of Securities		101
SECTION 9.6.	Trustee To Sign Amendments		101
	ARTICLE X
	Subordination
SECTION 10.1.	Agreement To Subordinate		101
SECTION 10.2.	Liquidation, Dissolution, Bankruptcy		101
SECTION 10.3.	Default on Senior Indebtedness		102
SECTION 10.4.	Acceleration of Payment of Securities		103
SECTION 10.5.	When Distribution Must Be Paid Over		103
SECTION 10.6.	Subrogation		103
SECTION 10.7.	Relative Rights		103
SECTION 10.8.	Subordination May Not Be Impaired by Company		103
SECTION 10.9.	Rights of Trustee and Paying Agent		103
SECTION 10.10.	Distribution or Notice to Representative		104
SECTION 10.11.	Article X Not To Prevent Events of Default or Limit Right To Accelerate		104
SECTION 10.12.	Trust Moneys Not Subordinated		104
SECTION 10.13.	Trustee Entitled To Rely		104

iii

		Page
SECTION 10.14.	Trustee To Effectuate Subordination		105
SECTION 10.15.	Trustee Not Fiduciary for Holders of Senior Indebtedness		105
SECTION 10.16.	Reliance by Holders of Senior Indebtedness on Subordination Provisions		105
	ARTICLE XI
	NOTE GUARANTEES
SECTION 11.1.	Note Guarantees		105
SECTION 11.2.	Limitation on Liability; Termination, Release and Discharge		107
SECTION 11.3.	Right of Contribution		108
SECTION 11.4.	No Subrogation		108
SECTION 11.5.	Subordination of Note Guarantees		110
	ARTICLE XII
	COLLATERAL
SECTION 12.1.	The Collateral		109
SECTION 12.2.	Maintenance of Collateral		109
SECTION 12.3.	Further Assurances		110
SECTION 12.4.	After Acquired Property		110
SECTION 12.5.	Agreements Requiring Application of Proceeds of Collateral		110
SECTION 12.6.	Real Estate Mortgages and Filings and Leasehold Interests		111
SECTION 12.7.	Release of Liens on the Collateral		112
SECTION 12.8.	Authorization of Actions to be Taken by the Trustee or the Collateral Agent Under the Collateral Documents		113
	ARTICLE XIII
	MISCELLANEOUS
SECTION 13.1.	Trust Indenture Act Controls		114
SECTION 13.2.	Notices		115
SECTION 13.3.	Communication by Holders with other Holders		116
SECTION 13.4.	Certificate and Opinion as to Conditions Precedent		116
SECTION 13.5.	Statements Required in Certificate or Opinion		116
SECTION 13.6.	When Securities Disregarded		117
SECTION 13.7.	Rules by Trustee, Paying Agent and Registrar		117
SECTION 13.8.	Legal Holidays		117
SECTION 13.9.	GOVERNING LAW		117
SECTION 13.10.	No Recourse Against Others		117
SECTION 13.11.	Successors		117
SECTION 13.12.	Multiple Originals		117
SECTION 13.13.	Table of Contents; Headings		118
SECTION 13.14.	Force Majeure		118
SCHEDULE 3.8	Existing Affiliate Transactions

iv

		Page
SCHEDULE 11.5	Premises and Leased Premises
EXHIBIT A	Form of the Securities
EXHIBIT B	Form of Indenture Supplement to Add Subsidiary Guarantors

v

CROSS-REFERENCE TABLE

TIA		Indenture
Section		Section
310	(a)(1)	7.10
	(a)(2)	7.10
	(a)(3)	N.A.
	(a)(4)	N.A.
	(a)(5)	7.10
	(b)	7.3; 7.8; 7.10
	(c)	N.A.
311	(a)	7.11
	(b)	7.11
	(c)	N.A.
312	(a)	2.5
	(b)	12.3
	(c)	12.3
313	(a)	7.6
	(b)(1)	7.6
	(b)(2)	7.6
	(c)	7.6
	(d)	7.6
314	(a)	3.12; 3.18; 12.5
	(b)	N.A.
	(c)(1)	8.1; 11.7; 12.4
	(c)(2)	8.1; 11.7; 12.4
	(c)(3)	N.A.
	(d)	12.5
	(e)	12
315	(a)	7.1
	(b)	7.5
	(c)	7.1
	(d)	7.1
	(e)	6.11
316	(a)(last sentence)	12.6
	(a)(1)(A)	6.5
	(a)(1)(B)	6.4
	(a)(2)	N.A.
	(b)	6.7
	(c)	9.4
317	(a)(1)	6.8
	(a)(2)	6.9
	(b)	2.4
318	(a)	12.1

     N.A. means Not Applicable.

Note: This Cross-Reference Table shall not, for any purpose, be deemed to be part of this Indenture.

vi

          INDENTURE dated as of June 16, 2006, among LIBBEY GLASS INC., a Delaware corporation (the “Company” or “Libbey Glass”), LIBBEY, INC. (“Parent”) and certain subsidiaries of the Company (the “Subsidiary Guarantors” and together with Libbey Inc., the “Note Guarantors”) from time to time parties hereto and MERRILL LYNCH PCG, INC., a Delaware corporation (the “Initial Holder”).

          In this Indenture, the term “Trustee” and the provisions related to the Trustee shall be inoperative until such time as the Initial Holder has appointed a Trustee pursuant to Section 7.8 hereof . At such time as a Trustee is appointed, provisions relating to the Initial Holder shall be inoperative.

          For and in consideration of the premises and the purchase of the Securities by the Holders thereof, each party hereto covenants and agrees as follows for the benefit of the other parties and for the equal and ratable benefit of all Holders of (i) $102,000,000 aggregate principal amount of 16% Senior Subordinated Pay-In-Kind Notes due 2011 issued on the date hereof (the “Initial Securities”) and (ii) if and when issued, an unlimited principal amount of additional Senior Subordinated Pay-In-Kind Notes due 2011 in a non-registered offering that may be offered from time to time or issued as payment of interest on the Securities, in each case, subsequent to the Issue Date (the “Additional Securities” and together with the Initial Securities, the “Securities”).

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

          SECTION 1.1. Definitions.

     “Acquired Indebtedness” means Indebtedness (i) of a Person or any of its Subsidiaries existing at the time such Person is merged with or into or becomes a Restricted Subsidiary of the Company or (ii) assumed in connection with the acquisition of assets from such Person, in each case whether or not Incurred by such Person in connection with, or in anticipation or contemplation of, such Person merging into, or becoming a Restricted Subsidiary of the Company or such acquisition. Acquired Indebtedness shall be deemed to have been Incurred, with respect to clause (i) of the preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with respect to clause (ii) of the preceding sentence, on the date of consummation of such acquisition of assets.

     “Acquisition” means the acquisition by certain Subsidiaries of the Company of 51% of the Capital Stock of Vitrocrisa Holding, S. de R.L. de C.V. and related companies.

     “Added Historical Amount” means the special charges in the amounts set forth in and described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Special Charges” in the Offering Memorandum, but only to the extent such special charges occurred in the consecutive four-quarter reference period referred to in the definition of Consolidated Coverage Ratio.

     “Additional Assets” means:

(1)	any property, plant or equipment or other asset (excluding working capital for the avoidance of doubt) to be used by the Company or a Restricted Subsidiary in a Related Business;
(2)	the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or a Restricted Subsidiary; or
(3)	Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

provided, however, that, in the case of clauses (2) and (3), such Restricted Subsidiary is primarily engaged in a Related Business.

     “Additional Securities” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

     “Affiliate” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any Person means the possession, directly or indirectly, of the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; provided that exclusively for purposes of Section 3.8, beneficial ownership of 10% or more of the Voting Stock of a Person shall be deemed to be control. For purpose of this definition, terms “controlling” and “controlled” have meanings correlative to the foregoing.

     “Asset Disposition” means any direct or indirect sale, lease (other than an operating lease entered into in the ordinary course of business), transfer, issuance or other disposition, or a series of related sales, leases, transfers, issuances or dispositions that are part of a common plan, of shares of Capital Stock of a Subsidiary (other than directors’ qualifying shares), property or other assets (each referred to for the purposes of this definition as a “disposition”) by the Company or any of its Restricted Subsidiaries, including any disposition by means of a merger, consolidation or similar transaction.

     Notwithstanding the preceding, the following items shall not be deemed to be Asset Dispositions:

(1) a disposition of assets by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary; provided that in the case of a transfer of Collateral, the transferee shall cause such amendments, supplements or other instruments to be executed, filed and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral pledged by or transferred to the transferee, together with such financing statements or comparable documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a

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	financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions;
(2)	the sale of Cash Equivalents in the ordinary course of business;
(3)	a disposition of inventory or products or a sale of services in the ordinary course of business;
(4)	a disposition of obsolete or worn out equipment or equipment that is no longer useful in the conduct of the business of the Company and its Restricted Subsidiaries and that is disposed of in each case in the ordinary course of business;
(5)	transactions permitted under Section 4.1;
(6)	an issuance of Capital Stock by a Restricted Subsidiary to the Company or by a Restricted Subsidiary to a Restricted Subsidiary (other than a Receivables Entity);
(7)	for purposes of Section 3.5 only, the making of a Permitted Investment (other than a Permitted Investment to the extent such transaction results in the receipt of cash or Cash Equivalents by the Company or its Restricted Subsidiaries) or a disposition subject to Section 3.3;
(8)	sales of accounts receivable and related assets or an interest therein to a Receivables Entity;
(9)	dispositions of assets or issuance or sale of Capital Stock of any Restricted Subsidiary in any transaction or series of related transactions with an aggregate fair market value of less than $2.0 million;
(10)	the creation of a Permitted Lien and dispositions in connection with Permitted Liens;
(11)	dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;
(12)	the issuance by a Restricted Subsidiary of Preferred Stock that is permitted by Section 3.2;
(13)	the licensing or sublicensing of intellectual property or other general intangibles and licenses, leases or subleases of other property in the ordinary course of business which do not materially interfere with the business of the Company and its Restricted Subsidiaries;
(14)	any sale of Capital Stock, Indebtedness or other securities of, an Unrestricted Subsidiary (with the exception of Investments in Unrestricted Subsidiaries

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	acquired pursuant to clauses (11) or (16) of the definition of “Permitted Investments” or clause (14) of the second paragraph of Section 3.3);
(15)	the sale of any property built or acquired by the Company or any Restricted Subsidiary after the Issue Date in a Sale/Leaseback Transaction within three months of the construction or acquisition of such property; and
(16)	foreclosure on assets.

     “Attributable Indebtedness” in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate implicit in the transaction) of the total obligations of the lessee for net rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended), determined in accordance with GAAP; provided, however, that if such Sale/ Leaseback Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capitalized Lease Obligations.”

     “Average Life” means, as of the date of determination, with respect to any Indebtedness or Preferred Stock, the quotient obtained by dividing (1) the sum of the products of the numbers of years from the date of determination to the date or dates of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Preferred Stock multiplied by the amount of each such payment by (2) the sum of all such payments.

     “Bank Indebtedness” means any and all amounts, whether outstanding on the Issue Date or thereafter incurred, payable under or in respect of the Credit Facility and any related notes, collateral documents, letters of credit and guarantees, including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company or any Restricted Subsidiary of the Company whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, indemnities, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof.

     “Bankruptcy Law” means Title 11 of the United States Code or any similar federal or state law for the relief of debtors.

     “Board of Directors” means, as to any Person, the board of directors or managers, as applicable, of such Person or any duly authorized committee thereof.

     “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of a Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.

     “Borrowing Base” means, as of the date of determination, an amount equal to the sum, without duplication of (1) up to 85% of the net book value of the Company’s and its Restricted Subsidiaries’ accounts receivable at such date and (2) up to 65% of the net book value of the

4

Company’s and its Restricted Subsidiaries’ inventory at such date. Net book value shall be determined in accordance with GAAP and shall be calculated using amounts reflected on the most recent available balance sheet (it being understood that the accounts receivable and inventories of an acquired business may be included if such acquisition has been completed on or prior to the date of determination).

     “Business Day” means each day that is not a Saturday, Sunday or other day on which banking institutions in New York, New York or a place of payment under this Indenture are authorized or required by law to close.

     “Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock and limited liability or partnership interests (whether general or limited), but excluding any debt securities convertible into such equity.

     “Capitalized Lease Obligations” means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation will be the capitalized amount of such obligation at the time any determination thereof is to be made as determined in accordance with GAAP, and the Stated Maturity thereof will be the date of the last payment of rent or any other amount due under such lease prior to the first date such lease may be terminated without penalty.

     “Cash Equivalents” means:

(1)	U.S. dollars, or in the case of the Company or any Foreign Subsidiary, such local currencies held by it from time to time in the ordinary course of business;
(2)	securities issued or directly and fully guaranteed or insured by the U.S. Government or any agency or instrumentality of the United States (provided that the full faith and credit of the U.S. Government is pledged in support thereof), having maturities of not more than one year from the date of acquisition;
(3)	marketable general obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition of the United States (provided that the full faith and credit of the United States is pledged in support thereof) and, at the time of acquisition, having a credit rating of “A” or better from either Standard & Poor’s Ratings Services or Moody’s Investors Service, Inc.;
(4)	certificates of deposit, time deposits, eurodollar time deposits, overnight bank deposits or bankers’ acceptances having maturities of not more than one year from the date of acquisition thereof issued by any commercial bank having combined capital and surplus in excess of $500 million;

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(5)	repurchase obligations with a term of not more than thirty days for underlying securities of the types described in clauses (2), (3) and (4), entered into with any bank meeting the qualifications specified in clause (4) above;
(6)	commercial paper rated at the time of acquisition thereof at least “A-2” or the equivalent thereof by Standard & Poor’s Ratings Services or “P-2” or the equivalent thereof by Moody’s Investors Service, Inc., or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of investments, and in any case maturing within one year after the date of acquisition thereof; and
(7)	interests in any investment company or money market fund that invests 95% or more of its assets in instruments of the type specified in clauses (1) through (6) above.

     “Change of Control” means the occurrence of any of the following:

(1)	the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any “person” or “group” of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that such person or group shall be deemed to have “beneficial ownership” of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 35% of the total voting power of the Voting Stock of the Company or the Parent (or its successor by merger, consolidation or purchase of all or substantially all of its assets) (for the purposes of this clause, such person or group shall be deemed to beneficially own any Voting Stock of the Company or the Parent held by a parent entity, if such person or group “beneficially owns” (as defined above), directly or indirectly, more than 35% of the voting power of the Voting Stock of such parent entity); or
(2)	the first day on which a majority of the members of the Board of Directors of the Company or the Parent are not Continuing Directors; or
(3)	the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Parent or the Company and its Restricted Subsidiaries taken as a whole to any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act); or
(4)	the adoption by the stockholders of the Company or the Parent of a plan or proposal for the liquidation or dissolution of the Company or the Parent.

     “Code” means the United States Internal Revenue Code of 1986, as amended.

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     “Collateral” means all property and tangible and intangible assets, whether now owned or hereafter acquired, in which Liens are, from time to time, granted to secure the Securities and the Note Guarantees pursuant to the Collateral Documents.

     “Collateral Agent” means, initially the Initial Holder and when Pari Passu Indebtedness is incurred or a collateral agent is appointed, such Person acting in the capacity of collateral agent under the Collateral Documents.

     “Collateral Documents” means the Mortgages, security agreements, pledge agreements, agency agreements and other instruments and documents executed and delivered pursuant to this Indenture or any of the foregoing, as the same may be amended, supplemented or otherwise modified from time to time and pursuant to which Collateral is pledged, assigned or granted to or on behalf of (a) the Initial Holder or (b) if a Trustee has been appointed or any Pari Passu Secured Indebtedness exists, the Collateral Agent for the ratable benefit of the holders of the Securities and the Trustee and the holders of any Pari Passu Secured Indebtedness, or notice of such pledge, assignment or grant is given.

     “Commodity Agreement” means any commodity futures contract, commodity option or other similar agreement or arrangement entered into by the Company or any Restricted Subsidiary designed to protect the Company or any of its Restricted Subsidiaries against fluctuations in the price of commodities actually used in the ordinary course of business of the Company and its Restricted Subsidiaries.

     “Common Stock” means with respect to any Person, any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or nonvoting) of such Person’s common stock whether or not outstanding on the Issue Date, and includes, without limitation, all series and classes of such common stock.

     “Company” means Libbey Glass Inc., or its successors and assigns.

     “Consolidated Coverage Ratio” means as of any date of determination, with respect to any Person, the ratio of (x) the aggregate amount of Consolidated EBITDA of such Person for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which financial statements are in existence to (y) Consolidated Interest Expense for such four fiscal quarters, provided, however, that:

     (1) if the Company or any Restricted Subsidiary:

(a) has Incurred any Indebtedness since the beginning of such period that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, Consolidated EBITDA and Consolidated Interest Expense for such period will be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period (except that in making such computation, the amount of Indebtedness under any revolving credit facility outstanding on the date of such calculation will be deemed to be (i) the average daily balance of such Indebtedness during such four fiscal

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quarters or such shorter period for which such facility was outstanding or (ii) if such facility was created after the end of such four fiscal quarters, the average daily balance of such Indebtedness during the period from the date of creation of such facility to the date of such calculation) and the discharge of any other Indebtedness repaid, repurchased, defeased or otherwise discharged with the proceeds of such new Indebtedness as if such discharge had occurred on the first day of such period; or

(b)

has repaid, repurchased, defeased or otherwise discharged any Indebtedness since the beginning of the period that is no longer outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio involves a discharge of Indebtedness (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and the related commitment terminated), Consolidated EBITDA and Consolidated Interest Expense for such period will be calculated after giving effect on a pro forma basis to such discharge of such Indebtedness, including with the proceeds of such new Indebtedness, as if such discharge had occurred on the first day of such period;

(2) if since the beginning of such period the Company or any Restricted Subsidiary will have made any Asset Disposition or disposed of any company, division, operating unit, segment, business, group of related assets or line of business or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is such an Asset Disposition:

(a)

the Consolidated EBITDA for such period will be reduced by an amount equal to the Consolidated EBITDA (if positive) directly attributable to the assets that are the subject of such disposition for such period or increased by an amount equal to the Consolidated EBITDA (if negative) directly attributable thereto for such period; and

(b)

Consolidated Interest Expense for such period will be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to the Company and its continuing Restricted Subsidiaries in connection with such disposition for such period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale);

(3) if since the beginning of such period the Company or any Restricted Subsidiary (by merger or otherwise) will have made an Investment in any Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary or is merged with or into the Company) or an acquisition of assets, including any acquisition of

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	assets occurring in connection with a transaction causing a calculation to be made hereunder, which constitutes all or substantially all of a company, division, operating unit, segment, business, group of related assets or line of business, Consolidated EBITDA and Consolidated Interest Expense for such period will be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition occurred on the first day of such period;
(4)	if since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period) will have Incurred any Indebtedness or discharged any Indebtedness, made any disposition or any Investment or acquisition of assets that would have required an adjustment pursuant to clause (1), (2) or (3) above if made by the Company or a Restricted Subsidiary during such period, Consolidated EBITDA and Consolidated Interest Expense for such period will be calculated after giving pro forma effect thereto as if such transaction occurred on the first day of such period; and
(5)	any Person that is a Restricted Subsidiary on the date of determination will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period and any Person that is not a Restricted Subsidiary on the date of determination will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period.

     For purposes of this definition, whenever pro forma effect is to be given to any calculation under this definition, the pro forma calculations will be determined in good faith by a responsible financial or accounting officer of the Company (including pro forma expense and cost reductions calculated on a basis consistent with Regulation S-X under the Securities Act). If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term in excess of 12 months). If any Indebtedness that is being given pro forma effect bears an interest rate at the option of the Company, the interest rate shall be calculated by applying such optional rate chosen by the Company.

     “Consolidated EBITDA” for any period means, without duplication, the Consolidated Net Income for such period, plus the following to the extent deducted in calculating such Consolidated Net Income:

(1)	Consolidated Interest Expense; plus
(2)	Consolidated Income Taxes; plus
(3)	consolidated depreciation expense; plus
(4)	impairment charges or asset write-offs recorded in connection with the application of Financial Accounting Standard No. 142 “Goodwill and Other Intangibles”,

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	Financial Accounting Standard No. 144 “Accounting for the Impairment or Disposal of Long Lived Assets” and amortization of intangibles pursuant to Financial Accounting Standard No. 141 “Business Combinations”; plus
(5)	any expenses or charges related to any Equity Offering, Permitted Investment, acquisition, recapitalization or Indebtedness permitted to be incurred under this Indenture (in each case whether or not consummated), deducted in such period in computing Consolidated Net Income; plus or minus
(6)	net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of Indebtedness; plus or minus
(7)	unrealized gains or losses relating to hedging transactions and mark-to-market Indebtedness denominated in foreign currencies resulting from the application of Financial Accounting Standard No. 52 “Foreign Currency Translation”; plus
(8)	non-cash compensation charges, including any such noncash charges arising from stock options, restricted stock grants or other equity incentive programs; plus
(9)	the Added Historical Amount; plus
(10)	other non-cash charges reducing Consolidated Net Income (excluding any such non-cash charge to the extent it represents an accrual of or reserve for cash charges in any future period or amortization of a prepaid cash expense that was paid in a prior period not included in the calculation); less
(11)	noncash items increasing Consolidated Net Income of such Person for such period (excluding any items which represent the reversal of any accrual of, or reserve for, anticipated cash charges made in any prior period and excluding the accrual of revenue in the ordinary course of business).

     Notwithstanding the preceding sentence, clauses (2) through (11) relating to amounts of a Restricted Subsidiary of a Person will be added to Consolidated Net Income to compute Consolidated EBITDA of such Person only to the extent (and in the same proportion) that the net income (loss) of such Restricted Subsidiary was included in calculating the Consolidated Net Income of such Person and, to the extent the amounts set forth in clauses (2) through (11) are in excess of those necessary to offset a net loss of such Restricted Subsidiary or if such Restricted Subsidiary has net income for such period included in Consolidated Net Income, only if a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Restricted Subsidiary or its stockholders.

     “Consolidated Income Taxes” means, with respect to any Person for any period, taxes imposed upon such Person or other payments required to be made by such Person by any governmental authority which taxes or other payments are calculated by reference to the income or profits of such Person or such Person and its Restricted Subsidiaries (to the extent such

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income or profits were included in computing Consolidated Net Income for such period), regardless of whether such taxes or payments are required to be remitted to any governmental authority.

     “Consolidated Interest Expense” means, for any period, the total interest expense of the Company and its consolidated Restricted Subsidiaries, whether paid or accrued, plus, to the extent not included in such interest expense:

(1)	interest expense attributable to Capitalized Lease Obligations and the interest portion of rent expense associated with Attributable Indebtedness in respect of the relevant lease giving rise thereto, determined as if such lease were a capitalized lease in accordance with GAAP and the interest component of any deferred payment obligations;
(2)	amortization of debt discount, debt issuance cost or deferred financing costs (provided that any amortization of bond premium will be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such amortization of bond premium has otherwise reduced Consolidated Interest Expense);
(3)	non-cash interest expense;
(4)	commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing;
(5)	the interest expense on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries;
(6)	costs associated with Hedging Obligations (including amortization of fees) provided, however, that if Hedging Obligations result in net benefits rather than costs, such benefits shall be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such net benefits are otherwise reflected in Consolidated Net Income;
(7)	the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period;
(8)	the product of (a) all dividends paid or payable, in cash, Cash Equivalents or Indebtedness or accrued during such period on any series of Disqualified Stock of such Person or on Preferred Stock of its Restricted Subsidiaries that are not Subsidiary Guarantors payable to a party other than the Company or a Restricted Subsidiary, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state, provincial and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP;
(9)	Receivables Fees; and

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(10) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Company and its Restricted Subsidiaries) in connection with Indebtedness Incurred by such plan or trust.

     For the purpose of calculating the Consolidated Coverage Ratio, the calculation of Consolidated Interest Expense shall include all interest expense (including any amounts described in clauses (1) through (10) above) relating to any Indebtedness of the Company or any Restricted Subsidiary described in the final paragraph of the definition of “Indebtedness.”

     For purposes of the foregoing, total interest expense will be determined (i) after giving effect to any net payments made or received by the Company and its Subsidiaries with respect to Interest Rate Agreements and (ii) exclusive of amounts classified as other comprehensive income in the balance sheet of the Company. Notwithstanding anything to the contrary contained herein, commissions, discounts, yield and other fees and charges Incurred in connection with any transaction pursuant to which the Company or its Restricted Subsidiaries may sell, convey or otherwise transfer or grant a security interest in any accounts receivable or related assets shall be included in Consolidated Interest Expense.

     “Consolidated Net Income” means, for any period, the net income (loss) of the Company and its consolidated Restricted Subsidiaries determined in accordance with GAAP; provided, however, that there will not be included in such Consolidated Net Income:

(1) any net income (loss) of any Person if such Person is not a Restricted Subsidiary, except that:

(a)

subject to the limitations contained in clauses (3), (4) and (5) below, the Company’s equity in the net income of any such Person for such period will be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the limitations contained in clause (2) below); and

(b)

the Company’s equity in a net loss of any such Person (other than an Unrestricted Subsidiary) for such period will be included in determining such Consolidated Net Income only to the extent such loss has been funded with cash from the Company or a Restricted Subsidiary;

(2) any net income (but not loss) of any Restricted Subsidiary if such Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Company, except that:

(a) subject to the limitations contained in clauses (3), (4) and (5) below and subject, in the case of a dividend to another Restricted Subsidiary, to the limitation contained in this clause (2), the Company’s equity in the net income of any such Restricted Subsidiary for such period will be included

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	in such Consolidated Net Income up to the aggregate amount of cash (x) that could have been distributed by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary as a dividend, for purposes of the calculation of Consolidated EBITDA and (y) that actually is paid in cash or converted into cash, for purposes of calculating clause (c)(i) of Section 3.3; and
(b)	the Company’s equity in a net loss of any such Restricted Subsidiary for such period will be included in determining such Consolidated Net Income;

(3)	any gain (loss) realized upon the sale or other disposition of any property, plant or equipment of the Company or its consolidated Restricted Subsidiaries (including pursuant to any Sale/Leaseback Transaction) that is not sold or otherwise disposed of in the ordinary course of business and any gain (loss) realized upon the sale or other disposition of any Capital Stock of any Person;
(4)	effects of adjustments in any line item in any Person’s consolidated financial statements pursuant to GAAP resulting from the application of purchase accounting in relation to the Acquisition or any other consummated acquisition;
(5)	after-tax effect of nonrecurring restructuring, closure, plant consolidation or similar charges relating to property, plant and equipment acquired in the Acquisition or in future acquisitions that are contemplated at the time of and incurred within 12 months of the closing of such transaction;
(6)	any extraordinary gain or loss; and
(7)	the cumulative effect of a change in accounting principles.

     Any amounts distributed or otherwise transferred to Parent pursuant to clause (9) of the second paragraph of Section 3.3, without duplication of any amounts otherwise deducted in calculating Consolidated Net Income, the funds for which are provided by the Company and/or its Restricted Subsidiaries, shall be deducted in calculating the Consolidated Net Income of the Company and its Restricted Subsidiaries.

     “Continuing Directors” means, as of any date of determination, any member of the Board of Directors of the Company or the Parent, as the case may be, who: (1) was a member of such Board of Directors on the Issue Date; or (2) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of the relevant Board at the time of such nomination or election.

     “Credit Agreement Obligations” means Indebtedness outstanding under the Senior Secured Credit Agreement that is secured by a Permitted Lien described in clause (1) of the definition thereof, and all other obligations (not constituting Indebtedness) of the Company or any Note Guarantor under the Senior Secured Credit Agreement.

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     “Credit Facility” means, with respect to the Company or any Subsidiary Guarantor or any Restricted Subsidiary that is a Foreign Subsidiary, one or more debt facilities (including, without limitation, the Senior Secured Credit Agreement) or commercial paper facilities with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time (and whether or not with the original administrative agent and lenders or another administrative agent or agents or other lenders and whether provided under the original Senior Secured Credit Agreement or any other credit or other agreement or indenture).

     “Currency Agreement” means in respect of a Person any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement as to which such Person is a party or a beneficiary.

     “Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

     “Default” means any event that is, or after notice or the passage of time or both would be, an Event of Default.

     “Definitive Securities” means certificated Securities.

     “Designated Senior Indebtedness” means (i) Bank Indebtedness, (ii) the Floating Rate Notes and the guarantees thereof, (iii) the Collateral Documents and (iv) any other Senior Indebtedness which, at the date of determination, has an aggregate principal amount outstanding of, or under which, at the date of determination, the holders thereof, are committed to lend up to, at least $25,000,000 and is specifically designated by the Company in the instrument evidencing or governing such Senior Indebtedness or another writing as “Designated Senior Indebtedness” for purposes of this Indenture.

     “Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event:

(1)	matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;
(2)	is convertible or exchangeable for Indebtedness or Disqualified Stock (excluding Capital Stock that is convertible or exchangeable solely at the option of the Company or a Restricted Subsidiary); or
(3)	is redeemable at the option of the holder of the Capital Stock in whole or in part,

in each case on or prior to the date that is 91 days after the earlier of the date (a) of the Stated Maturity of the Securities or (b) on which there are no Securities outstanding, provided that only the portion of Capital Stock that so matures or is mandatorily redeemable, is so convertible or

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exchangeable or is so redeemable at the option of the holder thereof prior to such date will be deemed to be Disqualified Stock; provided, further that any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of control or asset sale (each defined in a substantially similar manner to the corresponding definitions in this Indenture) shall not constitute Disqualified Stock if the terms of such Capital Stock (and all such securities into which it is convertible or for which it is ratable or exchangeable) provide that the Company may not repurchase or redeem any such Capital Stock (and all such securities into which it is convertible or for which it is ratable or exchangeable) pursuant to such provision prior to compliance by the Company with Section 3.5 and Section 3.11 of this Indenture and such repurchase or redemption complies with Section 3.3.

     “Equity Offering” means a public offering for cash by the Company or the Parent, as the case may be, of its Common Stock, or options, warrants or rights with respect to its Common Stock, other than (x) public offerings with respect to the Company’s or the Parent’s, as the case may be, Common Stock, or options, warrants or rights, registered on Form S-4 or S-8, (y) an issuance to any Subsidiary or (z) any offering of Common Stock issued in connection with a transaction that constitutes a Change of Control.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

     “Floating Rate Notes” shall mean (i) the Company’s Floating Rate Senior Secured Notes due 2011 issued under an indenture (the “Floating Rate Notes Indenture”), dated the date hereof, among the Company, the guarantors parties thereto and The Bank of New York, as trustee, (ii) if and when issued, an unlimited principal amount of additional Floating Rate Senior Secured Notes, Series A, due 2011 and (iii) if and when issued, the Company’s Floating Rate Senior Secured Notes, Series B, due 2011, that may be issued from time to time in exchange for previously issued Floating Rate Notes in an offer registered under the Securities Act or sold pursuant to a shelf registration statement pursuant to the registration rights agreement, dated the date hereof, among the Company, the Note Guarantors and the initial purchasers named therein.

     “Foreign Assets” means the aggregate assets held by, or related to, the Foreign Subsidiaries of the Company determined in accordance with GAAP as disclosed in the financial statements or in the footnotes to the financial statements of the Company most recently made available in accordance with this Indenture.

     “Foreign Subsidiary” means any Restricted Subsidiary that is not organized under the laws of the United States of America or any state thereof or the District of Columbia and any Subsidiary of such Restricted Subsidiary.

     “GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time, including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession. All ratios and computations based on GAAP contained in this Indenture will be

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computed in conformity with GAAP, except that in the event the Company is acquired in a transaction in which purchase accounting is applied to the Company’s financial statements, the effects of the application of purchase accounting in such instance shall be disregarded in the calculation of such ratios and other computations.

     “Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:

(1)	to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or
(2)	entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term “Guarantee” will not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

     “Guarantor Senior Indebtedness” means with respect to a Note Guarantor, the following obligations, whether outstanding on the date of this Indenture or thereafter issued, without duplication:

          (1) any Guarantee of the Bank Indebtedness by such Note Guarantor and all other Guarantees by such Note Guarantor of Senior Indebtedness of the Company or Guarantor Senior Indebtedness of any other Note Guarantor; and

          (2) all obligations consisting of principal of and premium, if any, accrued and unpaid interest on, and fees and other amounts relating to, all other Indebtedness of the Note Guarantor. Guarantor Senior Indebtedness includes interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Note Guarantor regardless of whether post-filing interest is allowed in such proceeding.

     Notwithstanding anything to the contrary in the preceding paragraph, Guarantor Senior Indebtedness will not include: (1) any obligation of the Note Guarantor to any Subsidiary of the Company or the Company, (2) any liability for Federal, state, local or other taxes owed or owing by such Note Guarantor, (3) any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities), (4) any Indebtedness, Guarantee or obligation of such Note Guarantor that is expressly subordinate or junior in right of payment to any other Indebtedness, Guarantee or obligation of such Note Guarantor, including any Guarantor Senior Subordinated Indebtedness and any Guarantor Subordinated Obligations, (5) any obligations with respect to any Capital Stock or (6) that portion of any Indebtedness incurred in violation of Section 3.2 (but, as to any such obligation, no such violation shall be deemed to exist for purposes of this clause (6) if the holders(s) of such obligation or their representative, the Initial Holder and the

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Trustee shall have received an Officers’ Certificate of the Note Company to the effect that the incurrence of such Indebtedness does not (or, in the case of revolving credit Indebtedness, that the incurrence of the entire committed amount thereof at the date on which the initial borrowing thereunder is made would not) violate such provisions of this Indenture).

     “Guarantor Senior Subordinated Indebtedness” means, with respect to a Note Guarantor, the obligations of such Note Guarantor under the Note Guarantee and any other Indebtedness of such Note Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that specifically provides that such Indebtedness is to rank equally in right of payment with the obligations of such Note Guarantor under the Note Guarantee and is not expressly subordinated by its terms in right of payment to any Indebtedness of such Note Guarantor which is not Guarantor Senior Indebtedness of such Note Guarantor.

     “Guarantor Subordinated Obligation” means, with respect to a Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that is expressly subordinated in right of payment to the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee, pursuant to a written agreement, without giving effect to collateral arrangements.

     “Hedging Obligations” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodity Agreement.

     “Holder” means a Person in whose name a Security is registered on the Registrar’s books.

     “Incur” means issue, create, assume, Guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) will be deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary; and the terms “Incurred” and “Incurrence” have meanings correlative to the foregoing.

     “Indebtedness” means, with respect to any Person on any date of determination (without duplication):

(1)	the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money;
(2)	the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
(3)	the principal component of all obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments (including reimbursement obligations with respect thereto except to the extent such reimbursement obligation relates to a trade payable or similar obligation to a trade creditor in each case incurred in the ordinary course of business);

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(4)	the principal component of all obligations of such Person to pay the deferred and unpaid purchase price of property (except trade payables), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto;
(5)	Capitalized Lease Obligations and all Attributable Indebtedness of such Person;
(6)	the principal component or liquidation preference of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock of the Company or a Restricted Subsidiary or Preferred Stock of a Subsidiary that is not a Subsidiary Guarantor (but excluding, in each case, any accrued dividends);
(7)	the principal component of all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of such Indebtedness will be the lesser of (a) the fair market value of such asset at such date of determination and (b) the amount of such Indebtedness of such other Persons;
(8)	the principal component of Indebtedness of other Persons to the extent Guaranteed by such Person;
(9)	to the extent not otherwise included in this definition, net obligations of such Person under Hedging Obligations (the amount of any such obligations to be equal at any time to the termination value of such agreement or arrangement giving rise to such obligation that would be payable by such Person at such time); and
(10)	to the extent not otherwise included in this definition, the principal amount of any Indebtedness outstanding in connection with a securitization transaction is the amount of obligations outstanding under the legal documents entered into as part of such securitization that would be characterized as principal on any date of determination if such securitization transaction were structured as a secured lending transaction.

     The amount of Indebtedness of any Person at any date will be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date; provided that contingent obligations arising in the ordinary course of business and not with respect of borrowed money shall be deemed not to constitute Indebtedness.

     Notwithstanding the foregoing, money borrowed and set aside at the time of the Incurrence of any Indebtedness in order to pre-fund the payment of interest on such Indebtedness shall not be deemed to be “Indebtedness” provided that such money is held to secure the payment of such interest.

     In addition, “Indebtedness” of any Person shall include Indebtedness described in the preceding paragraph that would not appear as a liability on the balance sheet of such Person if:

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(1)	such Indebtedness is the obligation of a partnership or joint venture that is not a Restricted Subsidiary (a “Joint Venture”);
(2)	such Person or a Restricted Subsidiary of such Person is a general partner of the Joint Venture (a “General Partner”); and
(3)	there is recourse, by contract or operation of law, with respect to the payment of such Indebtedness to property or assets of such Person or a Restricted Subsidiary of such Person; and then such Indebtedness shall be included in an amount not to exceed:

(a)	the lesser of (i) the net assets of the General Partner and (ii) the amount of such obligations to the extent that there is recourse, by contract or operation of law, to the property or assets of such Person or a Restricted Subsidiary of such Person; or
(b)	if less than the amount determined pursuant to clause (a) immediately above, the actual amount of such Indebtedness that is recourse to such Person or a Restricted Subsidiary of such Person, if the Indebtedness is evidenced by a writing and is for a determinable amount.

     “Indenture” means this Indenture as amended or supplemented from time to time.

     “Independent Financial Advisor” means an accounting, appraisal or investment banking firm or consultant to Persons engaged in a Permitted Business of nationally recognized standing that is, in the good faith judgment of the Company, qualified to perform the task for which it has been engaged.

     “Initial Securities” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

     “Intercreditor Agreement” means the Intercreditor Agreement, dated as of the date hereof, by and among J.P. Morgan Chase Bank, N.A., in its capacity as administrative agent under the Senior Secured Credit Agreement, the holders of any Pari Passu Secured Indebtedness from time to time (or any agent or representative on their behalf), the Initial Holder, the Bank of New York Trust Company, N.A. as the collateral agent for the Floating Rate Notes, and the Company and the Note Guarantors.

     “Interest Rate Agreement” means with respect to any Person any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement as to which such Person is party or a beneficiary.

     “Investment” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of any direct or indirect advance, loan (other than advances or extensions of credit to customers in the ordinary course of business) or other extensions of credit (including by way of Guarantee or similar arrangement, but excluding any

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debt or extension of credit represented by a bank deposit other than a time deposit) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by, such Person and all other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided that none of the following will be deemed to be an Investment:

(1)	Hedging Obligations entered into in the ordinary course of business and in compliance with this Indenture;
(2)	endorsements of negotiable instruments and documents in the ordinary course of business; and
(3)	an acquisition of assets, Capital Stock or other securities by the Company or a Subsidiary for consideration to the extent such consideration consists of Common Stock of the Company or the Parent.

     For purposes of Section 3.3,

(1)	“Investment” will include the portion (proportionate to the Company’s equity interest in a Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the fair market value of the net assets of such Restricted Subsidiary at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company will be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (a) the Company’s “Investment” in such Subsidiary at the time of such redesignation less (b) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the fair market value of the net assets (as conclusively determined by the Board of Directors of the Company in good faith) of such Subsidiary at the time that such Subsidiary is so re-designated a Restricted Subsidiary;
(2)	any property transferred to or from an Unrestricted Subsidiary will be valued at its fair market value at the time of such transfer, in each case as determined in good faith by the Board of Directors of the Company; and
(3)	if the Company or any Restricted Subsidiary sells or otherwise disposes of any Voting Stock of any Restricted Subsidiary such that, after giving effect to any such sale or disposition, such entity is no longer a Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value (as conclusively determined by the Board of Directors of the Company in good faith) of the Capital Stock of such Subsidiary not sold or disposed of.

     “Issue Date” means June 16, 2006.

     “Joint Venture” means any Person, other than an individual or a Subsidiary of the Company, (i) in which the Company or a Restricted Subsidiary holds or acquires a security

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interest (whether by way of Capital Stock or otherwise) and (ii) which is engaged in a Related Business.

     “Legal Holiday” has the meaning ascribed to it under Section 12.8.

     “Lien” means, with respect to any asset, any mortgage, pledge, security interest, encumbrance, lien or charge of any kind in respect of such asset (including any conditional sale or other title retention agreement or lease in the nature thereof).

     “Mortgages” means the mortgages, deeds of trust, deeds to secure Indebtedness or other similar documents securing Liens on the Premises, as well as the other Collateral secured by and described in the mortgages, deeds of trust, deeds to secure Indebtedness or other similar documents.

     “Net Available Cash” from an Asset Disposition means cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and net proceeds from the sale or other disposition of any securities received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring person of Indebtedness or other obligations relating to the properties or assets that are the subject of such Asset Disposition or received in any other non-cash form) therefrom, in each case net of:

(1)	all legal, accounting, investment banking, title and recording tax expenses, commissions and other fees and expenses Incurred, and all Federal, state, provincial, foreign and local taxes required to be paid or accrued as a liability under GAAP (after taking into account any available tax credits or deductions and any tax sharing agreements), as a consequence of such Asset Disposition;
(2)	all payments made on any Indebtedness that is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon or any other security agreement of any kind with respect to such assets, or that must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law be repaid out of the proceeds from such Asset Disposition;
(3)	all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition; and
(4)	the deduction of appropriate amounts to be provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed of in such Asset Disposition and retained by the Company or any Restricted Subsidiary after such Asset Disposition.

     “Net Cash Proceeds,” with respect to any issuance or sale of Capital Stock, means the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, listing fees, discounts or commissions and brokerage, consultant and other fees and charges actually Incurred in connection with such issuance or sale and net of taxes paid or payable as a result of such issuance or sale (after taking into account any available tax credit or deductions and any tax sharing arrangements); provided that the cash proceeds of an

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Equity Offering by Parent shall not be deemed Net Cash Proceeds, except to the extent such cash proceeds are contributed to the Company.

     “Non-Guarantor Restricted Subsidiary” means any Restricted Subsidiary that is not a Subsidiary Guarantor.

     “Non-Recourse Debt” means Indebtedness of a Person:

(1)	as to which neither the Company nor any Restricted Subsidiary (a) provides any Guarantee or credit support of any kind (including any undertaking, guarantee, indemnity, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable (as a guarantor or otherwise);
(2)	no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of the Company or any Restricted Subsidiary to declare a default under such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its Stated Maturity; and
(3)	the explicit terms of which provide there is no recourse against any of the assets of the Company or its Restricted Subsidiaries, except that Standard Securitization Undertakings shall not be considered recourse.

     “Non-U.S. Person” means a Person who is not a U.S. Person (as defined in Regulation S).

     “Note Guarantee” means, individually, any Guarantee of payment of the Securities by a Note Guarantor pursuant to the terms of this Indenture and any supplemental indenture thereto, and, collectively, all such Note Guarantees. Each such Note Guarantee will be in the form prescribed by this Indenture.

     “Note Guarantor” has the meaning ascribed to it in the introductory paragraph of this Indenture.

     “Offering Memorandum” means the Offering Memorandum dated as of June 9, 2006 relating to the offering of the Securities.

     “Officer” means the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer or the Secretary of the Company or, if the Company is a partnership or a limited liability company that has no such officers, a person duly authorized under applicable law by the general partner, managers, members or a similar body to act on behalf of the Company. Officer of any Note Guarantor has a correlative meaning.

     “Officers’ Certificate” means a certificate signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company.

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     “Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company, a Guarantor or the Trustee.

     “Parent” means Libbey Inc., a Delaware corporation.

     “Parent Common Stock” means the common stock, par value $ .01 per share of the Parent.

     “Pari Passu Indebtedness” means Indebtedness that ranks equally in right of payment to the Securities (without giving effect to collateral arrangements).

     “Pari Passu Secured Indebtedness” means any Indebtedness of the Company or any Note Guarantor that ranks pari passu in right of payment with the Securities or the relevant Note Guarantee and is secured by a Lien on the Collateral that has the same priority as the Lien securing the Securities and that is designated in writing as such by the Company to the Initial Holder or the Trustee and the holders of which enter into an appropriate agency agreement with the Collateral Agent.

     “Permitted Asset Swap” means any transfer of property or assets by the Company or any of its Restricted Subsidiaries in which at least 90% of the consideration received by the transferor consists of properties or assets (other than cash and Investments) that will be used in a Related Business; provided that the aggregate fair market value of the property or assets being transferred by the Company or such Restricted Subsidiary is not greater than the aggregate fair market value of the property or assets received by the Company or such Restricted Subsidiary in such exchange (provided, however, that in the event such aggregate fair market value of the property or assets being transferred or received by the Company is (x) less than $20.0 million, such determination shall be made in good faith by the Board of Directors of the Company and (y) greater than or equal to $20.0 million, such determination shall be made by an Independent Financial Advisor). Neither the Company nor any of its Restricted Subsidiaries may effect a Permitted Asset Swap during the PIK Period.

     “Permitted Investment” means an Investment by the Company or any Restricted Subsidiary in:

(1)	a Restricted Subsidiary or a Person that will, upon the making of such Investment, become a Restricted Subsidiary; provided, however, that the primary business of such Restricted Subsidiary (other than a Receivables Entity) is a Related Business;
(2)	another Person if as a result of such Investment such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Company or a Restricted Subsidiary (other than a Receivables Entity); provided, however, that such Person’s primary business is a Related Business;
(3)	cash and Cash Equivalents;

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(4)	receivables owing to the Company or any Restricted Subsidiary created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;
(5)	payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;
(6)	loans or advances to employees of the Company and its Restricted Subsidiaries, (i) the proceeds of which are used to purchase Capital Stock of the Company or the Parent, or (ii) made in the ordinary course of business consistent with past practices of the Company or such Restricted Subsidiary in an aggregate amount at any one time outstanding not to exceed $3.5 million (loans or advances that are forgiven shall continue to be deemed outstanding);
(7)	Capital Stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of judgments or pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of a debtor;
(8)	Investments made as a result of the receipt of non-cash consideration from an Asset Disposition that was made pursuant to and in compliance with Section 3.5;
(9)	Investments in existence on the Issue Date and any modification, replacement, renewal, or extension thereof; provided, however, that the amount of such Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue Date or (y) as otherwise permitted under this Indenture;
(10)	Currency Agreements, Interest Rate Agreements, Commodity Agreements and related Hedging Obligations, which transactions or obligations are Incurred in compliance with Section 3.2;
(11)	following the expiration of the PIK Period, Investments by the Company or any of its Restricted Subsidiaries, together with all other Investments pursuant to this clause (11), in an aggregate amount at the time of such Investment not to exceed the greater of (a) $7.5 million or (b) 1% of Total Assets outstanding at any one time (with the fair market value of such Investment being measured at the time made and without giving effect to subsequent changes in value);
(12)	Guarantees issued in accordance with Section 3.2;
(13)	Investments by the Company or a Restricted Subsidiary in a Receivables Entity or any Investment by a Receivables Entity in any other Person, in each case, in connection with a Receivables securitization transaction, provided, however, that any Investment in any such Person is in the form of a purchase money note, or

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	any equity interest or interests in Receivables and related assets generated by the Company or a Restricted Subsidiary and transferred to any Person in connection with a Receivables securitization transaction or any such Person owning such Receivables;
(14)	Investments consisting of licensing of intellectual property pursuant to joint marketing arrangements with other Persons;
(15)	Investments of a Restricted Subsidiary of the Company acquired after the Issue Date or of an entity merged into or consolidated with the Company or a Restricted Subsidiary of the Company in a transaction that is not prohibited by Section 4.1 after the Issue Date, to the extent that such Investments were not made in contemplation of such acquisition, merger, or consolidation and were in existence on the date of such acquisition, merger, or consolidation; and
(16)	following the expiration of the PIK Period, Investments in Joint Ventures of the Company or any of its Restricted Subsidiaries not to exceed $15.0 million at any time outstanding (with the fair market value of such Investment being measured at the time made and without giving effect to subsequent changes in value).

     “Permitted Liens” means, with respect to any Person:

(1)	Liens securing Indebtedness and other obligations under the Senior Secured Credit Agreement and related Hedging Obligations and other Senior Indebtedness, including, without limitation, the Floating Rate Notes, and related banking services or cash management obligations and Liens on assets of Restricted Subsidiaries securing Guarantees of Indebtedness and other obligations of the Company and/or Libbey Europe B.V. under the Senior Secured Credit Agreement and other Guarantor Senior Indebtedness permitted to be Incurred, including, without limitation, Guarantees of the Floating Rate Notes, under this Indenture, provided that any such Liens of the Company or the Note Guarantors secure the Securities and the Note Guarantees on at least a third-priority basis;
(2)	pledges or deposits by such Person under workers’ compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import or customs duties or for the payment of rent, in each case Incurred in the ordinary course of business;
(3)	Liens imposed by law, including carriers’, warehousemen’s, mechanics’, materialmen’s and repairmen’s Liens, Incurred in the ordinary course of business;
(4)	Liens for taxes, assessments or other governmental charges not yet subject to penalties for non-payment or that are being contested in good faith by appropriate

25

	proceedings provided appropriate reserves required pursuant to GAAP have been made in respect thereof;
(5)	Liens in favor of issuers of surety or performance bonds or letters of credit or bankers’ acceptances issued pursuant to the request of and for the account of such Person in the ordinary course of its business;
(6)	survey exceptions encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building codes or other restrictions (including, without limitation, minor defects or irregularities in title and similar encumbrances) as to the use of real properties or liens incidental to the conduct of the business of such Person or to the ownership of its properties that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person provided that the Person complies with the applicable provisions of the Collateral Documents relating to such Liens;
(7)	Liens securing Hedging Obligations so long as the related Indebtedness is, and is permitted to be under this Indenture, secured by a Lien on the same property securing such Hedging Obligation;
(8)	leases, licenses, subleases and sublicenses of assets (including, without limitation, real property and intellectual property rights) that do not materially interfere with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries;
(9)	judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded and any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;
(10)	Liens for the purpose of securing the payment of all or a part of the purchase price of, or Capitalized Lease Obligations, purchase money obligations or other payments Incurred to finance the acquisition, lease, improvement or construction of, assets or property acquired or constructed in the ordinary course of business provided that:

(a)	the Incurrence of the aggregate principal amount of Indebtedness secured by such Liens is otherwise permitted to be Incurred under this Indenture and does not exceed the cost of the assets or property so acquired or constructed; and
(b)	such Liens are created within 180 days of construction or acquisition of such assets or property and do not encumber any other assets or property of the Company or any Restricted Subsidiary other than such assets or property and assets affixed or appurtenant thereto;

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(11)	Liens arising solely by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depositary institution;
(12)	Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Company and its Restricted Subsidiaries in the ordinary course of business;
(13)	Liens existing on the Issue Date (other than Liens permitted under clause (1));
(14)	Liens on property or shares of stock of a Person at the time such Person becomes a Restricted Subsidiary; provided, however, that such Liens are not created, Incurred or assumed in connection with, or in contemplation of, such other Person becoming a Restricted Subsidiary; provided further, however, that any such Lien may not extend to any other property owned by the Company or any Restricted Subsidiary;
(15)	Liens on property at the time the Company or a Restricted Subsidiary acquired the property, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary; provided, however, that such Liens are not created, Incurred or assumed in connection with, or in contemplation of, such acquisition; provided further, however, that such Liens may not extend to any other property owned by the Company or any Restricted Subsidiary;
(16)	Liens in favor of the Company or any Restricted Subsidiary;
(17)	Liens securing the Securities and Subsidiary Guarantees;
(18)	Liens securing Refinancing Indebtedness Incurred to refinance, refund, replace, amend, extend or modify, as a whole or in part, Indebtedness that was previously so secured pursuant to clauses (10), (13), (14), (15), (17) and (18), provided that any such Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the Indebtedness being refinanced or is in respect of property that is the security for a Permitted Lien hereunder; provided further that Liens securing Refinancing Indebtedness in respect of the Securities shall have the same priority and ranking in relation to the Floating Rate Notes and the Guarantees of the Floating Rate Notes as the Securities and the Note Guarantees;
(19)	any interest or title of a lessor under any Capitalized Lease Obligation or operating lease;
(20)	Liens under industrial revenue, municipal or similar bonds;
(21)	following the expiration of the PIK Period, Liens securing Indebtedness (other than Subordinated Obligations and Guarantor Subordinated Obligations) in an

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aggregate principal amount outstanding at any one time not to exceed $20.0 million; and

(22) Liens securing Indebtedness and other obligations of Foreign Subsidiaries that are Incurred in accordance with Section 3.2.

     “Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company, government or any agency or political subdivision hereof or any other entity.

     “PIK Period” means the period of time from the issuance of the Securities until the earlier of (x) the date on which the Company shall pay interest on the Securities in cash and (y) the date on which the Securities are redeemed.

     “Preferred Stock,” as applied to the Capital Stock of any corporation, means Capital Stock of any class or classes (however designated) that is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.

     “Rating Agencies” means Standard & Poor’s Ratings Group, Inc. and Moody’s Investors Service, Inc. or if Standard & Poor’s Ratings Group, Inc. or Moody’s Investors Service, Inc. or both shall not make a rating on the Securities publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Company (as certified by a resolution of the Board of Directors) which shall be substituted for Standard & Poor’s Ratings Group, Inc. or Moody’s Investors Service, Inc. or both, as the case may be.

     “Receivable” means a right to receive payment arising from a sale or lease of goods or the performance of services by a Person pursuant to an arrangement with another Person pursuant to which such other Person is obligated to pay for goods or services under terms that permit the purchase of such goods and services on credit and shall include, in any event, any items of property that would be classified as an “account,” “chattel paper,” “payment intangible” or “instrument” under the Uniform Commercial Code as in effect in the State of New York and any “supporting obligations” as so defined.

     “Receivables Entity” means a Wholly-Owned Subsidiary (or another Person in which the Company or any Restricted Subsidiary makes an Investment and to which the Company or any Restricted Subsidiary transfers Receivables and related assets) which engages in no activities other than in connection with the financing of Receivables and which is designated by the Board of Directors of the Company (as provided below) as a Receivables Entity:

(1) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which:

(a) is guaranteed by the Company or any Restricted Subsidiary (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings);

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(b)	is recourse to or obligates the Company or any Restricted Subsidiary in any way other than pursuant to Standard Securitization Undertakings; or
(c)	subjects any property or asset of the Company or any Restricted Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;

(2)

with which neither the Company nor any Restricted Subsidiary has any material contract, agreement, arrangement or understanding other than on terms no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Company, other than fees payable in the ordinary course of business in connection with servicing Receivables; and

(3)

to which neither the Company nor any Restricted Subsidiary has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.

     Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of the Company giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the foregoing conditions.

     “Receivables Fees” means any fees or interest paid to purchasers or lenders providing the financing in connection with a securitization transaction, factoring agreement or other similar agreement, including any such amounts paid by discounting the face amount of Receivables or participations therein transferred in connection with a securitization transaction, factoring agreement or other similar arrangement, regardless of whether any such transaction is structured as on-balance sheet or off- balance sheet or through a Restricted Subsidiary or an Unrestricted Subsidiary.

     “Redemption Date” means, with respect to any redemption of Securities, the date of redemption with respect thereto.

     “Refinancing Indebtedness” means Indebtedness that is Incurred to refund, refinance, replace, exchange, renew, repay or extend (including pursuant to any defeasance or discharge mechanism) (collectively, “refinance,” “refinances,” and “refinanced” shall have a correlative meaning) any Indebtedness existing on the Issue Date or Incurred in compliance with this Indenture (including Indebtedness of the Company that refinances Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that refinances Indebtedness of another Restricted Subsidiary) including Indebtedness that refinances Refinancing Indebtedness, provided, however, that:

(1) (a) if the Stated Maturity of the Indebtedness being refinanced is earlier than the Stated Maturity of the Securities, the Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being refinanced or (b) if the Stated Maturity of the Indebtedness being refinanced is later than the

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	Stated Maturity of the Securities, the Refinancing Indebtedness has a Stated Maturity at least 91 days later than the Stated Maturity of the Securities;
(2)	the Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being refinanced;
(3)	such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the sum of the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced (plus, without duplication, any additional Indebtedness Incurred to pay interest or premiums required by the instruments governing such existing Indebtedness and fees Incurred in connection therewith); and
(4)	if the Indebtedness being refinanced is subordinated in right of payment to the Securities or the Subsidiary Guarantee, such Refinancing Indebtedness is subordinated in right of payment to the Securities or the Subsidiary Guarantee on terms at least as favorable to the Holders as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

     “Related Business” means any business that is the same as or related, ancillary or complementary to any of the businesses of the Company and its Restricted Subsidiaries, on the Issue Date.

     “Representative” means the indenture trustee or other trustee, agent or representative in respect of any Senior Indebtedness; provided that if, and for so long as, any Senior Indebtedness lacks such a representative, then the Representative for such Senior Indebtedness shall at all times constitute the holders of a majority in outstanding principal amount of such Senior Indebtedness in respect of any Senior Indebtedness and that when used in connection with (i) the Senior Secured Credit Agreement, the term “Representative” shall refer to the administrative agent under the Senior Secured Credit Agreement or (ii) the Floating Rate Notes, the term “Representative” shall refer to the trustee under the Floating Rate Notes Indenture.

     “Restricted Investment” means any Investment other than a Permitted Investment.

     “Restricted Subsidiary” means any Subsidiary of the Company other than an Unrestricted Subsidiary.

     “Sale/Leaseback Transaction” means an arrangement relating to property now owned or hereafter acquired whereby the Company or a Restricted Subsidiary transfers such property to a Person (other than the Company or any of its Subsidiaries) and the Company or a Restricted Subsidiary leases it from such Person.

     “SEC” means the United States Securities and Exchange Commission.

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     “Securities” has the meaning ascribed to it in the second introductory paragraph of this Indenture.

     “Securities Documents” means this Indenture, the Securities, the Note Guarantees, the Collateral Documents and the Intercreditor Agreement.

     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

     “Securities Register” means the register of Securities, maintained by the Registrar, pursuant to Section 2.3.

     “Senior Indebtedness” means, whether outstanding on the Issue Date or thereafter issued, created, Incurred or assumed, (i) Bank Indebtedness and all amounts payable by the Company under or in respect of all other Indebtedness of the Company, including premiums and accrued and unpaid interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company at the rate specified in the documentation with respect thereto whether or not a claim for post-filing interest is allowed in such proceeding) and fees relating thereto and (ii) all Indebtedness of the Company including interest thereon (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company or any Restricted Subsidiary of the Company whether or not a claim for post-filing interest is allowed in such proceedings), whether outstanding on the Issue Date or thereafter incurred, unless in the instrument creating or evidencing the same or pursuant to which the same is outstanding it is expressly provided that such obligations are not superior in right of payment to the Securities; provided, however, that Senior Indebtedness shall not include (1) any obligation of the Company to any Subsidiary of the Company, (2) any liability for Federal, state, local or other taxes owed or owing by the Company, (3) any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities), (4) any Indebtedness of the Company which is expressly subordinate in right of payment to any other Indebtedness of the Company, including any Senior Subordinated Indebtedness and any Subordinated Obligations, (5) any obligations with respect to any Capital Stock or (6) that portion of any Indebtedness incurred in violation of Section 3.2 (but, as to any such obligation, no such violation shall be deemed to exist for purposes of this clause (6) if the holders(s) of such obligation or their representative, the Initial Holder and the Trustee shall have received an Officers’ Certificate of the Company to the effect that the incurrence of such Indebtedness does not (or, in the case of revolving credit Indebtedness, that the incurrence of the entire committed amount thereof at the date on which the initial borrowing thereunder is made would not) violate such provisions of this Indenture.

     “Senior Secured Credit Agreement” means the Credit Agreement to be entered into among the Company, Libbey Europe B.V., a Netherlands corporation, J.P. Morgan Securities Inc. as sole lead arranger and bookrunner, JPMorgan Chase Bank N.A., as Administrative Agent, and the lenders parties thereto from time to time, as the same may be amended, restated, modified, renewed, refunded, replaced (whether upon termination or otherwise) or refinanced in whole or in part from time to time (including increasing the amount loaned thereunder provided that such additional Indebtedness is Incurred in accordance with Section 3.2; provided that a

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Senior Secured Credit Agreement shall not (x) include Indebtedness issued, created or Incurred pursuant to a registered offering of securities under the Securities Act or a private placement of securities (including under Rule 144A or Regulation S) pursuant to an exemption from the registration requirements of the Securities Act or (y) relate to Indebtedness that does not consist exclusively of Senior Indebtedness or Guarantor Senior Indebtedness or Indebtedness of a Foreign Subsidiary.

     “Senior Subordinated Indebtedness” means the Securities and any other Indebtedness of the Company that specifically provides that it is Pari Passu Indebtedness and is not by its express terms subordinate in right of payment to any Indebtedness of the Company which is not Senior Indebtedness.

     “Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

     “Standard Securitization Undertakings” means representations, warranties, covenants and indemnities entered into by the Company or any Restricted Subsidiary that are reasonably customary in securitization of Receivables transactions.

     “Stated Maturity” means, with respect to any Indebtedness, the date specified in the agreement governing or certificate relating to such Indebtedness as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision, but shall not include any contingent obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof.

     “Subordinated Obligation” means any Indebtedness of the Company (whether outstanding on the Issue Date or thereafter Incurred) that is subordinated or junior in right of payment to the Securities pursuant to a written agreement, without giving effect to collateral arrangements.

     “Subsidiary” of any Person means (a) any corporation, association or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total ordinary voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof (or persons performing similar functions) or (b) any partnership, joint venture limited liability company or similar entity of which more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, is, in the case of clauses (a) and (b), at the time owned or controlled, directly or indirectly, by (1) such Person, (2) such Person and one or more Subsidiaries of such Person or (3) one or more Subsidiaries of such Person. Unless otherwise specified herein, each reference to a Subsidiary will refer to a Subsidiary of the Company.

     “Subsidiary Guarantee” means, individually, any Guarantee of payment of the Securities by a Subsidiary Guarantor pursuant to the terms of this Indenture and any supplemental indenture hereto (which shall be substantially in the form of Exhibit B), and, collectively, all

32

such Guarantees. Each such Subsidiary Guarantee will be in the form prescribed by this Indenture.

     “Subsidiary Guarantor” means each Restricted Subsidiary in existence on the Issue Date that provides a Subsidiary Guarantee on the Issue Date (and any other Restricted Subsidiary that provides a Subsidiary Guarantee in accordance with this Indenture); provided that upon release or discharge of such Restricted Subsidiary from its Subsidiary Guarantee in accordance with this Indenture, such Restricted Subsidiary ceases to be a Subsidiary Guarantor.

     “TIA” or “Trust Indenture Act” means the Trust Indenture Act of 1939, as in effect on the date of this Indenture.

     “Total Assets” means, with respect to any Person, the total assets of such Person and its Restricted Subsidiaries determined in accordance with GAAP, as shown on its most recent balance sheet.

     “Trust Officer” shall mean, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

     “Trustee” means the party named as such pursuant to this Indenture until a successor replaces it and, thereafter, means, the successor.

     “Uniform Commercial Code” means the New York Uniform Commercial Code as in effect from time to time.

     “Unrestricted Subsidiary” means:

(1)	any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Company in the manner provided below; and
(2)	any Subsidiary of an Unrestricted Subsidiary.

     The Board of Directors of the Company may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary or a Person becoming a Subsidiary through merger or consolidation or Investment therein) to be an Unrestricted Subsidiary only if:

(1) such Subsidiary or any of its Subsidiaries does not own any Capital Stock or Indebtedness of or have any Investment in, or own or hold any Lien on any property of, any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary;

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(2)	all the Indebtedness of such Subsidiary and its Subsidiaries shall, at the date of designation, and will at all times thereafter, consist of Non-Recourse Debt;
(3)	such designation and the Investment of the Company in such Subsidiary complies with Section 3.3;
(4)	such Subsidiary, either alone or in the aggregate with all other Unrestricted Subsidiaries, does not operate, directly or indirectly, all or substantially all of the business of the Company and its Subsidiaries;
(5)	such Subsidiary is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation:

(a)	to subscribe for additional Capital Stock of such Person; or
(b)	to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and

(6) on the date such Subsidiary is designated an Unrestricted Subsidiary, such Subsidiary is not a party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary with terms substantially less favorable to the Company than those that might have been obtained from Persons who are not Affiliates of the Company.

     Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a resolution of the Board of Directors of the Company giving effect to such designation and an Officers’ Certificate certifying that such designation complies with the foregoing conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary shall be deemed to be Incurred as of such date.

     The Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately after giving effect to such designation, no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof and the Company could Incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of Section 3.2 on a pro forma basis taking into account such designation.

     “U.S. Government Obligations” means securities that are (a) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (b) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder

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of such depositary receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depositary receipt.

     “Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled to vote in the election of directors, managers or trustees, as applicable, of such Person.

     “Wholly-Owned Subsidiary” means a Restricted Subsidiary, all of the Capital Stock of which (other than directors’ qualifying shares) is owned by the Company or another Wholly-Owned Subsidiary.

            SECTION 1.2. Other Definitions.

Term	Defined in Section
“Additional Restricted Securities”	2.1(b)
“Affiliate Transaction”	3.8
“Agent”	3.14
“Agent Members”	2.1(e)
“Asset Disposition Offer”	3.5
“Asset Disposition Offer Amount”	3.5
“Asset Disposition Offer Period”	3.5
“Asset Disposition Purchase Date”	3.5
“Authenticating Agent”	2.2
“Blockage Notice”	10.3
“Calculation Agent”	2.3
“Certificated Note”	2.1(b)
“Change of Control Offer”	3.11
“Change of Control Payment”	3.11
“Change of Control Payment Date”	3.11
“Company Order”	2.2
“covenant defeasance option”	8.1(b)
“cross acceleration provision”	6.1(6)(b)
“Defaulted Interest”	2.13
“Event of Default”	6.1
“Excess Proceeds”	3.5
“Guarantor Obligations”	10.1
“legal defeasance option”	8.1(b)
“Pari Passu Notes”	3.5
“Payment Blockage Period”	10.3
“payment default”	6.1(6)(a)
“Paying Agent”	2.3
“Private Placement Legend”	2.1(d)
“protected purchaser”	2.9

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Term	Defined in Section
“Registrar”	2.3
“Resale Restriction Termination Date”	2.6(a)
“Restricted Payment”	3.3
“Restricted Securities”	2.1(a)
“Special Interest Payment Date”	2.13(a)
“Special Record Date”	2.13(a)
“Successor Company”	4.1

          SECTION 1.3. Incorporation by Reference of Trust Indenture Act. This Indenture incorporates by reference certain provisions of the TIA which are in and are made a part of this Indenture, whether or not the Indenture is subject to the TIA. The following TIA terms have the following meanings:

          “Commission” means the SEC.

          “indenture securities” means the Securities.

          “indenture security holder” means a Holder.

          “indenture to be qualified” means this Indenture.

          “indenture trustee” or “institutional trustee” means the Trustee.

          “obligor” on the indenture securities means the Company, any Subsidiary Guarantors and any other obligor on the indenture securities.

          All other TIA terms used in this Indenture that are defined by the TIA, defined in the TIA by reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions.

          SECTION 1.4. Rules of Construction. Unless the context otherwise requires:

          (1)    a term has the meaning assigned to it;

          (2)    an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

          (3)    “including” means including without limitation;

          (4)    words in the singular include the plural and words in the plural include the singular;

          (5)    the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP;

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          (6)    the principal amount of any Preferred Stock shall be (i) the maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater;

          (7)    all amounts expressed in this Indenture or in any of the Securities in terms of money refer to the lawful currency of the United States of America; and

          (8)    the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

ARTICLE II
THE SECURITIES

          SECTION 2.1. Form, Dating and Terms. (a) The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Initial Securities issued on the date hereof will be in an aggregate principal amount of $102,000,000. In addition, the Company may issue, from time to time in accordance with these provisions of Additional Securities. Furthermore, Securities may be authenticated and delivered upon registration or transfer, or in lieu of, other Securities pursuant to Section 2.6, 2.9, 2.11, 5.8 or 9.5 or in connection with a Change of Control Offer pursuant to Section 3.11 or an Asset Disposition Offer under Section 3.5.

          The Initial Securities shall be known and designated as “16% Senior Subordinated Pay-In-Kind Notes due 2011” of the Company. Additional Securities shall be known and designated as “16% Senior Subordinated Pay-In-Kind Note due 2011” of the Company.

          With respect to any Additional Securities, the Company shall set forth in (a) a Board Resolution of the Company and (b) (i) an Officers’ Certificate or (ii) one or more indentures supplemental hereto, the following information:

     (1) the aggregate principal amount of such Additional Securities to be authenticated and delivered pursuant to this Indenture which may be in an unlimited aggregate principal amount; and

     (2) the issue price and the issue date of such Additional Securities, including the date from which interest shall accrue.

          The Initial Securities and the Additional Securities shall be considered collectively as a single class for all purposes of this Indenture. Holders of the Initial Securities, and the Additional Securities will vote and consent together on all matters to which such Holders are entitled to vote or consent as one class, and none of the Holders of the Initial Securities or the Additional Securities shall have the right to vote or consent as a separate class on any matter to which such Holders are entitled to vote or consent.

          If any of the terms of any Additional Securities are established by action taken pursuant to a Board Resolution of the Company, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of the Company and delivered to the

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Initial Holder or upon request by the Trustee, to the Trustee, at or prior to the delivery of the Officers’ Certificate or the indenture supplemental hereto setting forth the terms of the Additional Securities.

          (b) The Initial Securities are being offered and sold by the Company pursuant to a Units Purchase Agreement, dated June 9, 2006, among the Company and the Initial Holder. The Initial Securities and any Additional Securities will be resold initially only pursuant to an exemption from the Securities Act. Additional Securities offered after the date hereof may be offered and sold by the Company from time to time pursuant to one or more purchase agreements in accordance with applicable law.

          Initial Securities and Additional Securities shall be issued in the form of a Definitive Security, without interest coupons, substantially in the form of Exhibit A, which is hereby incorporated by reference and made a part of this Indenture, including appropriate legends as set forth under Section 2.1(d) (the “Certificated Note”), deposited with the Initial Holder, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The Certificated Note may be represented by more than one certificate. The aggregate principal amount of the Certificated Note may from time to time be increased or decreased by adjustments made on the Certificated Note and on the records of the Trustee as hereinafter provided or by issuance of Additional Securities.

          The principal of (and premium, if any) and interest on the Securities shall be payable at the office or agency of the Company maintained for such purpose in the Borough of Manhattan, The City of New York, State of New York, or at such other office or agency of the Company as may be maintained for such purpose pursuant to Section 2.3; provided, however, that, at the option of the Company, each installment of cash interest may be paid by (i) check mailed to addresses of the Persons entitled thereto as such addresses shall appear on the Securities Register or (ii) wire transfer to an account located in the United States maintained by the payee. During the PIK Period, interest shall be paid by issuing Additional Securities in principal amount equal to each installment of interest which shall be delivered to the Initial Holder. Payments in respect of Securities represented by Definitive Securities (including principal, premium, if any, and interest) held by a Holder of at least $1,000,000 aggregate principal amount of Securities represented by Definitive Securities will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent, if such have been appointed, or if not, to the Company to such effect designating such account no later than 15 days immediately preceding the relevant due date for payment (or such other date as the Company or the Trustee may accept in its discretion).

          The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage, in addition to those set forth on Exhibit A and under Section 2.1(d). The Company and the Initial Holder or Trustee shall approve the forms of the Securities and any notation, endorsement or legend on them. Each Security shall be dated the date of its execution by an Officer unless there is a Trustee in which case it shall be dated the date of its authentication.. The terms of the Securities set forth in Exhibit A are part of the terms of this Indenture and, to the extent applicable, the Company, the Initial Holder and the Trustee by their execution and delivery of this Indenture, expressly agree to be bound by such terms.

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          (c) Denominations. The Securities shall be issuable only in fully registered form, without interest coupons, and only in denominations of $1,000 and an integral multiple thereof or, if issued in payment of interest on the Securities, in the amount of such interest.

          (d) Restrictive Legends. Unless and until Security is sold under an effective registration statement,

          (A) the Certificated Note shall bear the following legend (the “Private Placement Legend”) on the face thereof:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (C) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) TO REQUEST THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

          (e) OID Legend. Each Certificated Note issued with “original issue discount” as defined in Section 1273 of the Code, shall bear the following legend on the face thereof:

THIS SECURITY WAS ISSUED WITH “ORIGINAL ISSUE DISCOUNT” AS DEFINED IN SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. YOU MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE PRICE, THE ISSUE DATE AND THE YIELD TO MATURITY BY CONTACTING THE CHIEF FINANCIAL OFFICER OF LIBBEY GLASS INC. AT 300 MADISON AVENUE, P.O. BOX 10060, TOLEDO, OHIO 43699-0060, OR AT (419) 325-2100.

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     SECTION 2.2. Execution and Authentication. One Officer shall sign the Securities for the Company by manual or facsimile signature. If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, if applicable, the Security shall be valid nevertheless.

     If a Trustee has been appointed, a Security shall not be valid until an authorized signatory of the Trustee manually authenticates the Security, otherwise the signature of an Officer shall be sufficient. The signature of the Trustee on a Security shall be conclusive evidence that such Security has been duly and validly authenticated and issued under this Indenture. A Security shall be dated the date of its execution by an Officer unless there is a Trustee in which case it shall be dated the date of its authentication.

     At any time and from time to time after the execution and delivery of this Indenture, the Company shall make available for delivery and if applicable, the Trustee shall authenticate: (1) Initial Securities for original issue on the Issue Date in an aggregate principal amount of $102,000,000 and (2) subject to the terms of this Indenture, Additional Securities for original issue in an unlimited principal amount, in each case if Trustee has been appointed upon a written order of the Company signed by one Officer of the Company (the “Company Order”). Such Company Order shall specify the amount of the Securities to be authenticated and the date on which the original issue of Securities is to be authenticated and whether the Securities are to be Initial Securities or Additional Securities.

     The Trustee may appoint an agent (the “Authenticating Agent”) reasonably acceptable to the Company to authenticate the Securities. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Company. Unless limited by the terms of such appointment, any such Authenticating Agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by the Authenticating Agent. An Authenticating Agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

     In case the Company, pursuant to Article IV, shall be consolidated or merged with or into any other Person or shall convey, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any Person, and the successor Person resulting from such consolidation, or surviving such merger, or into which the Company shall have been merged, or the Person which shall have received a conveyance, transfer, lease or other disposition as aforesaid, shall have executed an indenture supplemental hereto with the Initial Holder or the Trustee pursuant to Article IV, any of the Securities authenticated or delivered prior to such consolidation, merger, conveyance, transfer, lease or other disposition may, from time to time, at the request of the successor Person, be exchanged for other Securities executed in the name of the successor Person with such changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Securities surrendered for such exchange and of like principal amount; and the Trustee, upon Company Order of the successor Person, shall authenticate and make available for delivery Securities as specified in such order for the purpose of such exchange. If Securities shall at any time be authenticated and delivered in any new name of a successor Person pursuant to this Section 2.2 in exchange or substitution for or upon registration of transfer of any Securities, such successor Person, at the option of the Holders but

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without expense to them, shall provide for the exchange of all Securities at the time outstanding for Securities authenticated and delivered in such new name.

     SECTION 2.3. Registrar and Paying Agent. If a Trustee is appointed, the Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange (the “Registrar”) and an office or agency where Securities may be presented for payment (the “Paying Agent”). In addition, the Company shall appoint and maintain at all times a Calculation Agent (the “Calculation Agent”) for purposes of the calculating the interest on the Securities, which shall initially be the Initial Holder. The Company shall cause each of the Registrar and the Paying Agent to maintain an office or agency in New York, New York. The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may have one or more co-registrars and one or more additional paying agents. The term “Paying Agent” includes any additional paying agent, and the term “Registrar” includes any co-registrar.

     The Company shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of each such agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.7. Any of the Company’s Restricted Subsidiaries organized in the United States may act as Paying Agent, Registrar or transfer agent.

     The Company will initial appoint the Trustee as Registrar and Paying Agent for the Securities. The Company may remove any Registrar or Paying Agent without notice to any Holder upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) acceptance of any appointment by a successor as evidenced by an appropriate agreement entered into by the Company and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Company and the Trustee.

     SECTION 2.4. Paying Agent to Hold Money in Trust. By no later than 10:00 a.m. (New York City time) on the date on which any principal of, premium, if any, or interest on any Security is due and payable, if a Trustee has been appointed, the Company shall deposit with the Paying Agent a sum sufficient in immediately available funds to pay such principal, premium, if any, or interest when due. If a Trustee has not been appointed such payment shall be made to the Initial Holder. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that such Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all money held by such Paying Agent for the payment of principal, premium, if any, of or interest on the Securities (whether such assets have been distributed to it by the Company or other obligors on the Securities) and shall notify the Trustee in writing of any default by the Company or any Subsidiary Guarantor in making any such payment. If any Subsidiary Guarantor of the Company acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any

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time may require a Paying Agent (other than the Trustee) to pay all money held by it to the Trustee and to account for any funds or assets disbursed by such Paying Agent. Upon complying with this Section 2.4, the Paying Agent (if other than a Subsidiary Guarantor of the Company) shall have no further liability for the money delivered to the Trustee. Upon any bankruptcy, reorganization or similar proceeding with respect to the Company, Initial Holder, or the Trustee if appointed, shall serve as Paying Agent for the Securities.

     SECTION 2.5. Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, or to the extent otherwise required under the TIA, the Company, on its own behalf and on behalf of each of the Subsidiary Guarantors, if any, shall furnish or cause the Registrar to furnish to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders, and the Company and the Subsidiary Guarantors shall otherwise comply with TIA § 312(a).

     SECTION 2.6. Transfer and Exchange. (a) Prior to the date which is two years after the later of the date of its original issue and the last date on which the Company or any Affiliate of the Company was the owner of such Securities (or any predecessor thereto) (the “Resale Restriction Termination Date”) a transfer of a Certificated Note shall be made upon receipt by the Company, the Trustee or its agent of a certificate substantially in the form set forth under Section 2.7 from the proposed transferee and, if requested by the Company or the Trustee, the receipt by the Trustee or its agent of an opinion of counsel, certification and/or other information satisfactory to each of them.

     After the Resale Restriction Termination Date, interests in a Certificated Note may be transferred in accordance with applicable law without requiring the certifications set forth under Section 2.7 or any additional certification.

     (b) Restricted Securities Legend. Upon the transfer, exchange or replacement of Securities not bearing a Restricted Securities Legend, the Registrar shall deliver Securities that do not bear a Restricted Securities Legend. Upon the transfer, exchange or replacement of Securities bearing a Restricted Securities Legend, the Registrar shall deliver only Securities that bear a Restricted Securities Legend unless (i) a Security is being transferred pursuant to an effective registration statement or (ii) there is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act.

     (c) The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.1 or this Section 2.6. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable prior written notice to the Registrar.

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          (d) Obligations with Respect to Transfers and Exchanges of Securities.

     (i) To permit registrations of transfers and exchanges, the Company shall, subject to the other terms and conditions of this Article II, execute, and the Trustee shall authenticate, Definitive Securities at the Registrar’s request.

     (ii) No service charge shall be made to a Holder for any registration of transfer or exchange, but the Company may require the Holder to pay a sum sufficient to cover any transfer tax, assessment or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charges payable upon exchange or transfer pursuant to Section 9.5).

     (iii) The Company (and the Registrar) shall not be required to register the transfer of or exchange of any Security for a period beginning 15 days before the mailing of a notice of an offer to repurchase or redeem Securities and ending at the close of business on the day of such mailing. The Company (and the Registrar) shall not be required to register the transfer of or exchange of any Security selected for redemption.

     (iv) Prior to the due presentation for registration of transfer of any Security, the Company, the Trustee, the Paying Agent or the Registrar may deem and treat the person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of, premium, if any, and interest on such Security and for all other purposes whatsoever, including the transfer or exchange of such Security, whether or not such Security is overdue, and none of the Company, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.

     (v) All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Securities surrendered upon such transfer or exchange.

          (e) No Obligation of the Trustee.

          (i) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

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     SECTION 2.7. Form of Certificate to be Delivered in Connection with Transfers .

[Date]

Company/Trustee
[address]

Attention: General Counsel/Corporate Trust Administration

Re:	Libbey Glass Inc.
	16% Senior Subordinated Pay-In-Kind Notes due 2011

Ladies and Gentlemen:

          This certificate is delivered to request a transfer of $___ principal amount of the 16% Senior Subordinated Pay-In-Kind Notes due 2011 (the “Securities”) of Libbey Glass Inc. (the “Company”).

          Upon transfer, the Securities would be registered in the name of the new beneficial owner as follows:

Name:

Address:

Taxpayer ID Number:

          The undersigned represents and warrants to you that:

          1. We are an “accredited investor” (as defined in Rule 501(a) under the Securities Act of 1933, as amended (the “Securities Act”)), purchasing for our own account or for the account of such another “accredited investor” and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risk of our investment in the Securities, and we invest in or purchase securities similar to the Securities in the normal course of our business. We and any accounts for which we are acting are each able to bear the economic risk of our or its investment.

          2. We understand that the Securities have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree to offer, sell or otherwise transfer such Securities prior to the date that is two years after the later of the date of original issue and the last date on which the Company or any affiliate of the Company was the owner of such Securities (or any predecessor thereto) (the “Resale Restriction Termination Date”) only (a) to the Company, (b) pursuant to a registration statement that has been declared effective under the Securities Act, or (c) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property be at all times

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within our control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Securities is proposed to be made pursuant to clause (c) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Company and if appointed, the Trustee, as defined in the indenture governing the Securities (the “Trustee”), which shall provide, among other things, that the transferee is an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) and that it is acquiring such Securities for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Company and the Trustee reserve the right prior to any offer, sale or other transfer prior to the Resale Termination Date of the Securities pursuant to clause (e) above to require the delivery of an opinion of counsel, certifications and/or other information satisfactory to the Company and the Trustee.

          The Trustee and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

TRANSFEREE:                                        

BY:                                                            

cc: Libbey Glass Inc.

          SECTION 2.8. Mutilated, Destroyed, Lost or Stolen Securities. If a mutilated Security is surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee, if appointed, shall authenticate a replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder (a) notifies the Company or the Trustee within a reasonable time after such Holder has notice of such loss, destruction or wrongful taking and the Registrar has not registered a transfer prior to receiving such notification, (b) makes such request to the Company or the Trustee prior to the Security being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a “protected purchaser”) and (c) satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Company, such Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent and the Registrar from any loss which any of them may suffer if a Security is replaced, and, in the absence of notice to the Company, any Subsidiary Guarantor or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and, upon receipt of a Company Order, the Trustee shall authenticate and make available for delivery, in exchange for any such mutilated Security or in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount, bearing a number not contemporaneously outstanding.

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          In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

          Upon the issuance of any new Security under this Section, the Company may require that such Holder pay a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of counsel and of the Trustee) in connection therewith.

          Every new Security issued pursuant to this Section in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, any Subsidiary Guarantor (if applicable) and any other obligor upon the Securities, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.

          The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

          SECTION 2.9. Outstanding Securities. Securities outstanding at any time are all Securities executed by an Officer and authenticated by the Trustee, if appointed, except for those cancelled by it, those delivered to it for cancellation and those described in this Section as not outstanding. A Security does not cease to be outstanding in the event either of the Company or an Affiliate of the Company holds the Security; provided, however, that (i) for purposes of determining which are outstanding for consent or voting purposes hereunder, the provisions of Section 11.7 shall apply and (ii) in determining whether the Trustee shall be protected in making a determination whether the Holders of the requisite principal amount of outstanding Securities are present at a meeting of Holders of Securities for quorum purposes or have consented to or voted in favor of any request, demand, authorization, direction, notice, consent, waiver, amendment or modification hereunder, or relying upon any such quorum, consent or vote, only Securities which a Trust Officer of the Trustee actually knows to be held by the Company or an Affiliate of the Company shall not be considered outstanding.

          If a Security is replaced pursuant to Section 2.8 (other than a mutilated Security surrendered for replacement), it ceases to be outstanding and interest on it ceases to accrue unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a protected purchaser. A mutilated Security ceases to be outstanding upon surrender of such Security and replacement pursuant to Section 2.8.

          If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a Redemption Date or maturity date money sufficient to pay all principal, premium, if any, and accrued interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

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          SECTION 2.10. Temporary Securities. In the event that Definitive Securities are to be issued under the terms of this Indenture, until such Definitive Securities are ready for delivery, the Company may prepare and the Trustee, if appointed, shall authenticate temporary Securities. Temporary Securities shall be substantially in the form, and shall carry all rights, of Definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee, if appointed, shall authenticate Definitive Securities. After the preparation of Definitive Securities, the temporary Securities shall be exchangeable for Definitive Securities upon surrender of the temporary Securities at any office or agency maintained by the Company for that purpose and such exchange shall be without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute, and the Trustee shall, if appointed, authenticate and make available for delivery in exchange therefor, one or more Definitive Securities representing an equal principal amount of Securities. Until so exchanged, the Holder of temporary Securities shall in all respects be entitled to the same benefits under this Indenture as a Holder of Definitive Securities.

          SECTION 2.11. Cancellation. The Company at any time may cancel Securities or deliver Securities to the Trustee, if appointed, for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee, if appointed, and no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment or cancellation and dispose of such Securities in accordance with its internal policies and customary procedures and shall deliver canceled Securities to the Company pursuant to written direction by an Officer of the Company. If no Trustee is appointed, the Company shall cancel such Securities. If the Company or any Subsidiary Guarantor acquires any of the Securities, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness represented by such Securities unless and until the same are surrendered for cancellation pursuant to this Section 2.12. The Company may not issue new Securities to replace Securities it has paid and cancelled or delivered to the Trustee for cancellation for any reason other than in connection with a transfer or exchange.

          SECTION 2.12. Payment of Interest; Defaulted Interest. Interest on any Security which is payable, and is punctually paid or duly provided for, on any interest payment date shall be paid to the Person in whose name such Security (or one or more predecessor Securities) is registered at the close of business on the regular record date for such payment at the office or agency of the Company maintained for such purpose pursuant to Section 2.3.

          Any interest on any Security which is payable, but is not paid when the same becomes due and payable and such nonpayment continues for a period of 30 days shall forthwith cease to be payable to the Holder on the regular record date, and such defaulted interest and (to the extent lawful) interest on such defaulted interest at the rate borne by the Securities (such defaulted interest and interest thereon herein collectively called “Defaulted Interest”) shall be paid by the Company, at its election in each case, as provided in clause (a) or (b) below:

     (a) The Company may elect to make payment of any Defaulted Interest to the Initial Holder by making such payment. If a Trustee has been appointed, the Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the close of

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business on a Special Record Date (as defined below) for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Initial Holder or the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date (not less than 30 days after such notice) of the proposed payment (the “Special Interest Payment Date”), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a record date (the “Special Record Date”) for the payment of such Defaulted Interest, which date shall be not more than 15 days and not less than 10 days prior to the Special Interest Payment Date and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor to be given in the manner provided for under Section 11.2 not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor having been so given, such Defaulted Interest shall be paid on the Special Interest Payment Date to the Persons in whose names the Securities (or their respective predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b).

     (b) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

          Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of, transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

          SECTION 2.13. Computation of Interest. Interest on the Securities shall be computed on the basis of a 360-day year comprised of twelve 30-day months.

          SECTION 2.14. CUSIP, Common Code and ISIN Numbers. The Company in issuing the Securities may use “CUSIP,” “Common Code” or “ISIN” numbers and, if so, the Trustee shall use “CUSIP,” “Common Code” or “ISIN” numbers in notices of redemption or purchase as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption or purchase and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption or purchase shall not be affected by any defect in or omission of such CUSIP, Common Code or ISIN

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number. The Company shall promptly notify the Trustee in writing of any change in any CUSIP, Common Code or ISIN number.

          SECTION 2.15. Original Issue Discount

          For U.S. federal income tax purposes, the Company shall use semi-annual “accrual periods” (as described in Treasury Regulation § 1.1272-1(b)(1)(ii)) for purposes of computing its accrual of original issue discount on the Securities, with the first accrual period ending on December 1, 2006, subsequent accrual periods ending on June 1 or December 1 as the case may be, and the final accrual period ending on December 1, 2011.

ARTICLE III
COVENANTS

          SECTION 3.1. Payment of Securities. The Company shall promptly pay the principal of, premium, if any, and interest on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal, premium, if any, and interest shall be considered paid on the date due if on such date the Initial Holder has received payment or if the Trustee or the Paying Agent holds in accordance with this Indenture immediately available funds sufficient to pay all principal, premium, if any, and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture.

          The Company shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

          The Company and any Subsidiary Guarantors will pay any present or future stamp, court or documentary taxes or any other excise or property taxes, charges or similar levies that arise in any jurisdiction from the execution, delivery, enforcement or registration of the Securities, the Subsidiary Guarantees (if any), this Indenture or any other document or instrument in relation thereof, or the receipt of any payments with respect to the Securities or any Subsidiary Guarantees, excluding such taxes, charges or similar levies imposed by any jurisdiction outside of the United States, the jurisdiction of incorporation of any successor of the Company or any Subsidiary Guarantor or any jurisdiction in which a Paying Agent is located, other than those resulting from, or required to be paid in connection with, the enforcement of the Securities, the Subsidiary Guarantees or any other such document or instrument following the occurrence of any Event of Default with respect to the Securities. The Company or the Subsidiary Guarantors, if any, will agree to indemnify the Holders for any such taxes paid by such Holders.

          Notwithstanding anything to the contrary contained in this Indenture, the Company or any Subsidiary Guarantor may, to the extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal, premium or interest payments hereunder.

          SECTION 3.2. Limitation on Indebtedness The Company will not, and will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness (including Acquired

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Indebtedness); provided, however, that the Company and the Subsidiary Guarantors may Incur Indebtedness if on the date thereof the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is at least 2.00 to 1.00; provided, further, that if the Company and the Subsidiary Guarantors Incur Indebtedness during the PIK Period pursuant to this paragraph, such Indebtedness is expressly subordinated in right of payment to the Senior Secured Notes during the PIK Period and interest on such Indebtedness is payable solely by increasing the principal amount of such Indebtedness during the PIK Period.

        The first paragraph of this Section 3.2 will not prohibit the Incurrence of the following Indebtedness:

(1)	Indebtedness of the Company, any Subsidiary Guarantor or any Restricted Subsidiary that is a Foreign Subsidiary Incurred pursuant to a Credit Facility in an aggregate amount up to the greater of (a) $150.0 million, less the aggregate principal amount of all principal repayments with the proceeds from Asset Dispositions utilized in accordance with clause 3(a) of Section 3.5 that permanently reduce the commitments thereunder, and (b) the Borrowing Base;
(2)	Guarantees by (x) the Company or its Subsidiary Guarantors of Indebtedness Incurred by the Company or a Restricted Subsidiary in accordance with the provisions of this Indenture, provided that in the event such Indebtedness that is being Guaranteed is (a) Senior Subordinated Indebtedness or Guarantor Senior Subordinated Indebtedness, then the related Guarantee shall rank equally in right of payment to the Note Guarantees or (b) a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Securities or the Subsidiary Guarantee, as the case may be, and (y) Non-Guarantor Restricted Subsidiaries of Indebtedness Incurred by Non-Guarantor Restricted Subsidiaries in accordance with the provisions of this Indenture;
(3)	Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any other Restricted Subsidiary; provided, however,

(a)	if the Company is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Securities;
(b)	if a Subsidiary Guarantor is the obligor on such Indebtedness and the Company or a Subsidiary Guarantor is not the obligee, such Indebtedness is subordinated in right of payment to the Subsidiary Guarantees of such Subsidiary Guarantor; and
(c)	(i) any subsequent issuance or transfer of Capital Stock or any other event that results in any such Indebtedness being beneficially

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	held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(ii)	any sale or other transfer of any such Indebtedness to a Person other than the Company or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company or such Subsidiary, as the case may be.

(4)	Indebtedness represented by (a) the Securities issued on the Issue Date, the Subsidiary Guarantees, (b) any Indebtedness (other than the Indebtedness described in clauses (1), (2), (3), (6), (8), (9), (10) and (11)) outstanding on the Issue Date and (c) any Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (4) or clause (5) or Incurred pursuant to the first paragraph of this Section 3.2;
(5)	following the expiration of the PIK Period, Indebtedness of a Restricted Subsidiary Incurred and outstanding on the date on which such Restricted Subsidiary was acquired by, or merged into, the Company or any Restricted Subsidiary (other than Indebtedness Incurred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by the Company or (b) otherwise in connection with, or in contemplation of, such acquisition); provided, however, that at the time such Restricted Subsidiary is acquired by the Company, the Company would have been able to Incur $1.00 of additional Indebtedness pursuant to the first paragraph of this Section 3.2 after giving effect to the Incurrence of such Indebtedness pursuant to this clause (5);
(6)	Indebtedness under Hedging Obligations that are Incurred in the ordinary course of business (and not for speculative purposes);
(7)	the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capitalized Lease Obligations, mortgage financings or purchase money obligations Incurred pursuant to this clause (7), and Attributable Indebtedness, in an aggregate principal amount (including all Refinancing Indebtedness Incurred to refund, defease, renew, extend, refinance or replace any Indebtedness Incurred pursuant to this clause (7)) not to exceed during the PIK Period, $5.0 million and, thereafter, $15.0 million, in each case at any time outstanding;
(8)	Indebtedness Incurred in respect of workers’ compensation claims, self-insurance obligations, performance, surety and similar bonds, warranties, indemnities and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business;

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(9)	Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for customary guarantees, indemnification, adjustment of purchase price or similar obligations, in each case, Incurred or assumed in connection with the disposition of any business, assets or Capital Stock of a Restricted Subsidiary, provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(10)	Indebtedness represented by earnout provisions, contingent payments in respect of purchase price or adjustment of purchase price or similar obligations in acquisition agreements; provided that this clause (10) shall not extend to Indebtedness Incurred to finance an earnout or any other component of such Investment;
(11)	Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, provided, however, that such Indebtedness is extinguished within five business days of Incurrence;
(12)	Indebtedness Incurred by Foreign Subsidiaries that are not Subsidiary Guarantors in an aggregate principal amount, together with all other Indebtedness (including Refinancing Indebtedness) Incurred pursuant to this clause (12), not to exceed, during the PIK Period, $45.0 million and, thereafter, the greater of (x) $25.0 million and (y) 6% of Foreign Assets, in each case at any time outstanding; provided, however, that such Indebtedness Incurred pursuant to this clause (12) during the PIK Period shall only consist of (i) Incurrences to fund working capital related to the Company’s Foreign Subsidiaries organized in Mexico in an aggregate amount not to exceed $15.0 million, (ii) Incurrences to fund capital expenditures related to the Company’s Foreign Subsidiaries organized in Mexico in an aggregate amount not to exceed $15.0 million and (iii) Incurrences to fund working capital and capital expenditures related to the Company’s Foreign Subsidiaries organized in Portugal in an aggregate amount not to exceed $15.0 million;
(13)	Indebtedness of Libbey Glassware (China) Co., Ltd. or a Restricted Subsidiary that is a Foreign Subsidiary organized under the laws of the People’s Republic of China Incurred pursuant to a Credit Facility in an aggregate principal amount, together with all other Indebtedness (including Refinancing Indebtedness) Incurred pursuant to this clause (13), not to exceed $30.0 million at any time outstanding and any Guarantee of such Indebtedness issued by the Company; and
(14)	following the expiration of the PIK Period, in addition to the items referred to in clauses (1) through (13) above, Indebtedness of the

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Company and its Restricted Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness (including (i) any outstanding Indebtedness in excess of the greater of (x) $25.0 million and (y) 6% of Foreign Assets Incurred pursuant to clause (12) above as determined on the date of the expiration of the PIK Period and not classified by Libbey Glass in any other manner that complies with this covenant, which excess not so otherwise classified shall be deemed classified as Indebtedness Incurred under this clause (14) and (ii) Refinancing Indebtedness) Incurred pursuant to this clause (14) and then outstanding, will not exceed $20.0 million at any time outstanding.

          The Company will not Incur any Indebtedness under the preceding paragraph if the proceeds thereof are used, directly or indirectly, to refinance any Subordinated Obligations of the Company unless such Indebtedness will be subordinated to the Securities to at least the same extent as such Subordinated Obligations. No Subsidiary Guarantor will Incur any Indebtedness if the proceeds thereof are used, directly or indirectly, to refinance any Guarantor Subordinated Obligations of such Subsidiary Guarantor unless such Indebtedness will be subordinated to the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee to at least the same extent as such Guarantor Subordinated Obligations. No Restricted Subsidiary (other than a Subsidiary Guarantor) may Incur any Indebtedness if the proceeds are used to refinance Indebtedness of the Company or a Subsidiary Guarantor. No Subsidiary Guarantor will Incur any Indebtedness if the proceeds thereof are used, directly or indirectly, to refinance any Guarantor Senior Subordinated Indebtedness unless such refinancing Indebtedness is either Guarantor Senior Subordinated Indebtedness or Guarantor Subordinated Obligations.

          For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to and in compliance with, this Section 3.2:

(1)	subject to clause (2) below, in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in the first and second paragraphs of this Section 3.2, the Company, in its sole discretion, will classify such item of Indebtedness on the date of Incurrence and, may later classify such item of Indebtedness in any manner that complies with this Section 3.2 and only be required to include the amount and type of such Indebtedness in one of such clauses;
(2)	all Indebtedness outstanding on the Issue Date under the Senior Secured Credit Agreement shall be deemed Incurred on the Issue Date under clause (1) of the second paragraph of this Section 3.2 and not the first paragraph or clause (4) of the second paragraph of this Section 3.2;
(3)	Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness that is otherwise included in the determination of a particular amount of Indebtedness shall not be included;

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(4)	if obligations in respect of letters of credit are Incurred pursuant to a Credit Facility and are being treated as Incurred pursuant to clause (1) of the second paragraph above and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(5)	the principal amount of any Disqualified Stock of the Company or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary that is not a Subsidiary Guarantor, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof;
(6)	Indebtedness permitted by this Section 3.2 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.2 permitting such Indebtedness;
(7)	the principal amount of any Indebtedness outstanding in connection with a securitization transaction is the amount of obligations outstanding under the legal documents entered into as part of such securitization that would be characterized as principal on any date of determination if such securitization transaction were structured as a secured lending transaction; and
(8)	the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.

          Accrual of interest, accrual of dividends, the accretion of accreted value, the payment of interest in the form of additional Indebtedness and the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.2. The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount or the aggregate principal amount outstanding in the case of Indebtedness issued with interest payable-in-kind and (ii) the principal amount or liquidation preference thereof, in the case of any other Indebtedness.

          In addition, the Company will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness or issue any shares of Disqualified Stock, other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of such date (and, if the Incurrence of such Indebtedness as of such date violates this Section 3.2, the Company shall be in Default of this Section 3.2).

          For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant

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currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that the U.S. dollar-equivalent principal amount of Indebtedness of Libbey Glassware (China) Co., Ltd. under the Credit Facility to which it is a party as of the Issue Date shall be calculated based on the relevant currency exchange rate in effect on the date first committed; and provided further, that if any such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 3.2, the maximum amount of Indebtedness that the Company may Incur pursuant to this Section 3.2 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.

          SECTION 3.3. Limitation on Restricted Payments. The Company will not, and will not permit any of its Restricted Subsidiaries, directly or indirectly, to:

(1) declare or pay any dividend or make any distribution (whether made in cash, securities or other property) on or in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) except:

(a)	dividends or distributions payable in Capital Stock of the Company (other than Disqualified Stock) or in options, warrants or other rights to purchase such Capital Stock of the Company; and
(b)	dividends or distributions payable to the Company or another Restricted Subsidiary (and if such Restricted Subsidiary is not a Wholly-Owned Subsidiary, to its other holders of common Capital Stock on a pro rata basis);

(2)

purchase, redeem, retire or otherwise acquire for value any Capital Stock of the Company or any direct or indirect parent of the Company held by Persons other than the Company or a Restricted Subsidiary (other than in exchange for Capital Stock of the Company (other than Disqualified Stock));

(3)

purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Obligations or Guarantor Subordinated Obligations (other than (x) Indebtedness of the Company owing to and held by any Subsidiary Guarantor or Indebtedness of a Subsidiary Guarantor owing to and held by the Company or any other

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Subsidiary Guarantor permitted under clause (3) of the second paragraph of Section 3.2 or (y) the purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Obligations or Guarantor Subordinated Obligations purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase, redemption, defeasance or other acquisition or retirement); or

(4) make any Restricted Investment in any Person;

(any such dividend, distribution, purchase, redemption, repurchase, defeasance, other acquisition, retirement or Restricted Investment referred to in clauses (1) through (4) shall be referred to herein as a “Restricted Payment”), if at the time the Company or such Restricted Subsidiary makes such Restricted Payment:

(a)	a Default shall have occurred and be continuing (or would result therefrom); or
(b)	the Company is not able to Incur $1.00 of additional Indebtedness pursuant to the first paragraph of Section 3.2 after giving effect, on a pro forma basis, to such Restricted Payment; or
(c)	the aggregate amount of such Restricted Payment and all other Restricted Payments declared or made subsequent to the Issue Date (excluding Restricted Payments permitted by clauses (1), (2), (3), (4), (7), (8), (9), (11), (13) and (14) of the next succeeding paragraph) would exceed the sum of:

(i)

50% of Consolidated Net Income for the period (treated as one accounting period) from the beginning of the first fiscal quarter commencing after the Issue Date to the end of the most recent fiscal quarter ending prior to the date of such Restricted Payment for which financial statements are in existence (or, in case such Consolidated Net Income is a deficit, minus 100% of such deficit); plus

(ii)

100% of the aggregate Net Cash Proceeds received by the Company, plus the fair market value of property other than cash or of marketable securities (such fair market value to be determined on the date of contractually agreeing to such sale as determined in good faith by the Board of Directors) received by the Company from the issue or sale of its Capital Stock (other than Disqualified Stock) or other capital contributions subsequent to the Issue Date (other than Net Cash Proceeds received from an issuance or sale of such Capital Stock to a Subsidiary of the Company or an employee stock ownership plan, option plan or similar trust

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to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or Guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination) excluding in any event Net Cash Proceeds received by the Company from the issue and sale of its Capital Stock or capital contributions to the extent applied to redeem Securities in compliance with the provisions of Article V as it relates to the second paragraph of Section 5 of the Securities; plus

(iii)	the amount by which Indebtedness of the Company or its Restricted Subsidiaries is reduced on the Company’s balance sheet upon the conversion or exchange (other than by a Subsidiary of the Company) subsequent to the Issue Date of any Indebtedness of the Company or its Restricted Subsidiaries convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Company (less the amount of any cash, or the fair market value of any other property, distributed by the Company upon such conversion or exchange);
(iv)	100% of the Net Cash Proceeds and the fair market value of property other than cash and marketable securities (such fair market value to be determined in good faith by the Board of Directors) from the sale or other disposition (other than to the Company or a Note Guarantor or to an employee stock ownership plan or trust established by the Company or any Restricted Subsidiary) of Restricted Investments made after the Issue Date and redemptions and repurchases of such Restricted Investments from the Company or its Restricted Subsidiaries and repayment of loans or advances from the Company and its Restricted Subsidiaries (other than in each case to the extent the Restricted Investment was made pursuant to clause (14) of the next succeeding paragraph);
(v)	to the extent that any Unrestricted Subsidiary of the Company designated as such after the Issue Date is redesignated as a Restricted Subsidiary or any Unrestricted Subsidiary of the Company merges into or consolidates with the Company or any of its Restricted Subsidiaries, in each case after the Issue Date, the fair market value of such Subsidiary as of the date of such redesignation or such merger or consolidation, or in the case of the transfer of assets of an Unrestricted Subsidiary to the Company or a Restricted Subsidiary, the fair market value of the

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Investment in such Unrestricted Subsidiary, as determined by the Board of Directors of the Company in good faith at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary or at the time of such merger, consolidation or transfer of assets (other than an Unrestricted Subsidiary to the extent the Investment in such Unrestricted Subsidiary was made by a Restricted Subsidiary pursuant to clause (14) of the next succeeding paragraph or to the extent such Investment constituted a Permitted Investment); and

(vi) 50% of any dividends received by the Company or a Restricted Subsidiary of the Company after the Issue Date from an Unrestricted Subsidiary of the Company, to the extent that such dividends were not otherwise included in the Consolidated Net Income of the Company.

          The provisions of the preceding paragraph will not prohibit:

(1)	any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Capital Stock, Disqualified Stock or Subordinated Obligations of the Company or Guarantor Subordinated Obligations of any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary or an employee stock ownership plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or Guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination); provided, however, that the Net Cash Proceeds from such sale of Capital Stock will be excluded from clause (c)(ii) of the preceding paragraph;
(2)	any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Obligations of the Company or Guarantor Subordinated Obligations of any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, Subordinated Obligations of the Company or any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Guarantor Subordinated Obligations made by exchange for or out of the proceeds of the substantially concurrent sale of Guarantor Subordinated Obligations that, in each case, is permitted to be Incurred pursuant to Section 3.2 and that in each case constitutes Refinancing Indebtedness;
(3)	any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Disqualified Stock of the Company or a Restricted Subsidiary made by exchange for or out of the proceeds of the sale within

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30 days of Disqualified Stock of the Company or such Restricted Subsidiary, as the case may be, that, in each case, is permitted to be Incurred pursuant to Section 3.2 and that in each case constitutes Refinancing Indebtedness;

(4)	any purchase or redemption of Subordinated Obligations or Guarantor Subordinated Obligations of a Subsidiary Guarantor from Net Available Cash to the extent permitted under Section 3.5 below;
(5)	dividends paid within 60 days after the date of declaration if at such date of declaration such dividend would have complied with this provision;
(6)	Restricted Payments, cash dividends or loans to the Parent, for the purchase, redemption or other acquisition, cancellation or retirement for value of Capital Stock, or options, warrants, equity appreciation rights or other rights to purchase or acquire Capital Stock, of the Company or any Restricted Subsidiary or any direct or indirect parent of the Company held by any existing or former directors, officers, employees or consultants of the Company or the Parent or any Subsidiary of the Company or their assigns, estates or heirs, in each case in connection with the repurchase provisions under stock option or stock purchase agreements or other agreements to compensate such Persons; provided, that such redemptions, repurchases or payments pursuant to this clause shall not be permitted with respect to the compensation or issuance of securities for any services that were not related to, or for the benefit of, the Company and its Restricted Subsidiaries; provided, further, that such redemptions or repurchases pursuant to this clause will not exceed $3.0 million in the aggregate during any calendar year; provided, further, that (x) the Company may carry over and make in subsequent calendar years, in addition to the $3.0 million amount permitted for such calendar year, the amount of such purchases, redemptions or other acquisitions or retirements for value permitted to be made, but not made, in any preceding calendar year, up to a maximum amount of $8.0 million in any calendar year and (y) the maximum amount in any calendar year may be increased by the amount of any capital contributions to the Company as a result of sales of such shares of Capital Stock of the Company or any direct or indirect parent of the Company to such persons (provided that the Net Cash Proceeds from such sale of Capital Stock will be excluded from clause (c)(ii) of the preceding paragraph of this Section 3.3) to the extent not so previously applied, plus the amount of any “key man” insurance proceeds, received by the Company or any Restricted Subsidiary to the extent not so previously applied;
(7)	following the expiration of the PIK Period, so long as no Default or Event of Default has occurred and is continuing, the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Company issued in accordance with the terms of this Indenture to the

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extent such dividends are included in the definition of “Consolidated Interest Expense”;

(8)

repurchases of Capital Stock deemed to occur upon (x) the exercise of stock options, warrants or other convertible securities if such Capital Stock represents a portion of the exercise price thereof or (y) cash dividends or loans to the Parent in amounts sufficient to pay taxes of directors, officers, employees or consultants relating to the withholding of a portion of the Capital Stock granted or awarded to a director, officer, employee or consultant in exchange for the payment of taxes payable by such Person upon such grant or award;

(9)

cash dividends or loans to the Parent in amounts equal to:

(a)	the amounts required for the Parent to pay any Federal, state or local income taxes to the extent that such income taxes are directly attributable to the income of the Company and its Restricted Subsidiaries and, to the extent of amounts actually received from Unrestricted Subsidiaries, in amounts required to pay such taxes to the extent attributable to the income of the Unrestricted Subsidiaries;
(b)	the amounts required for the Parent to pay franchise taxes and other fees required to maintain its legal existence;
(c)	amounts to pay corporate overhead expenses of the Parent Incurred in the ordinary course of business (including financing transactions that benefit the Company and its Restricted Subsidiaries), and to pay salaries, benefits or other compensation of directors, officers, employees and consultants who perform services for both the Parent and the Company;

(10) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Obligation (i) at a purchase price not greater than 101% of the principal amount of such Subordinated Obligation in the event of a Change of Control in accordance with provisions similar to Section 3.11 or (ii) at a purchase price not greater than 100% of the principal amount thereof in accordance with provisions similar to Section 3.5; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made the Change of Control Offer or Asset Disposition Offer, as applicable, as provided in such covenant with respect to the Securities and has completed the repurchase or redemption of all Securities validly tendered for payment in connection with such Change of Control Offer or Asset Disposition Offer;

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(11)	the repurchase or redemption of the Company’s or the Parent’s preferred stock purchase rights, or any substitute therefor, in an aggregate amount not to exceed the product of (x) the number of outstanding shares of Common Stock of the Parent and (y) $0.01 per share, as such amount may be adjusted in accordance with the rights agreement relating to the Parent Common Stock;
(12)	cash dividends or loans to the Parent in amounts required for the Parent to declare and pay cash dividends on Parent Common Stock in an amount not to exceed $0.10 per share in any fiscal year, which amount will be reduced to reflect any subdivision of the Parent Common Stock by means of a stock split, stock dividend or otherwise; provided that at the time of declaration of such dividend permitted, (x) no Event of Default (and, following the expiration of the PIK Period, no Default) has occurred and is continuing and (y) to the extent such cash dividends or loans are made following the expiration of the PIK Period, the Company is able to Incur at least an additional $1.00 of Indebtedness pursuant to the first paragraph of Section 3.2; and
(13)	the repurchase, redemption or other acquisition for value of Capital Stock of the Company or any direct or indirect parent of the Company representing fractional shares of such Capital Stock in connection with a merger, consolidation, amalgamation or other combination involving the Company or any direct or indirect parent of the Company; and
(14)	following the expiration of the PIK Period, Restricted Payments in an amount not to exceed $10.0 million.

          The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of such Restricted Payment of the asset(s) or securities proposed to be paid, transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment. The fair market value of any cash Restricted Payment shall be its face amount and any non-cash Restricted Payment shall be determined conclusively by the Board of Directors of the Company acting in good faith whose resolution with respect thereto shall be delivered to the Trustee, such determination to be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if such fair market value is estimated in good faith by the Board of Directors of the Company to exceed $20.0 million. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 3.3 were computed, together with a copy of any fairness opinion or appraisal required by this Indenture.

          SECTION 3.4. Limitation on Restrictions on Distributions from Restricted Subsidiaries. The Company will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

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(1)	pay dividends or make any other distributions on its Capital Stock or pay any Indebtedness or other obligations owed to the Company or any Restricted Subsidiary (it being understood that the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on Common Stock shall not be deemed a restriction on the ability to make distributions on Capital Stock);
(2)	make any loans or advances to the Company or any Restricted Subsidiary (it being understood that the subordination of loans or advances made to the Company or any Restricted Subsidiary to other Indebtedness Incurred by the Company or any Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances); or
(3)	transfer any of its property or assets to the Company or any Restricted Subsidiary (it being understood that such transfers shall not include any type of transfer described in clause (1) or (2) above).

          The provisions of the preceding paragraph will not prohibit:

(i)	any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Issue Date, including, without limitation, this Indenture, the Securities, the Subsidiary Guarantees, the Collateral Documents, the Intercreditor Agreement, the Floating Rate Notes (and related documentation) and the Senior Secured Credit Agreement (and related documentation) in effect on such date;
(ii)	any encumbrance or restriction with respect to a Person pursuant to an agreement relating to any Capital Stock or Indebtedness Incurred by such Person on or before the date on which such Person became a Restricted Subsidiary or was acquired by, merged into or consolidated with the Company or a Restricted Subsidiary (other than Capital Stock or Indebtedness Incurred as consideration in, or to provide all or any portion of the funds utilized to consummate, the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was acquired by, merged into or consolidated with the Company or in contemplation of the transaction) and outstanding on such date, provided, that any such encumbrance or restriction shall not extend to any assets or property of the Company or any other Restricted Subsidiary other than the assets and property so acquired and that, in the case of Indebtedness, was permitted to be Incurred pursuant to this Indenture;
(iii)	any encumbrance or restriction pursuant to an agreement effecting a refunding, replacement or refinancing of Indebtedness Incurred pursuant to an agreement referred to in clause (i) or (ii) of this paragraph or this clause (iii) or contained in any amendment, restatement, modification,

62

renewal, supplement, refunding, replacement or refinancing of an agreement referred to in clause (i) or (ii) of this paragraph or this clause (iii); provided, however, that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such agreement are no less favorable in any material respect, taken as a whole, to the Holders of the Securities than the encumbrances and restrictions contained in such agreements referred to in clauses (i) or (ii) of this paragraph on the Issue Date or the date such Restricted Subsidiary became a Restricted Subsidiary or was merged into a Restricted Subsidiary, whichever is applicable;

(iv)	in the case of clause (3) of the first paragraph of this Section 3.4, Liens permitted to be incurred under the provisions of Section 3.6;
(v)	(a) purchase money obligations for property acquired in the ordinary course of business and (b) Capitalized Lease Obligations permitted under this Indenture, in each case, that impose encumbrances or restrictions of the nature described in clause (3) of the first paragraph of this Section 3.4 on the property so acquired;
(vi)	any restriction with respect to a Restricted Subsidiary (or any of its property or assets) imposed pursuant to an agreement entered into for the direct or indirect sale or disposition of the Capital Stock or assets of such Restricted Subsidiary (or the property or assets that are subject to such restriction) pending the closing of such sale or disposition;
(vii)	any customary provisions in joint venture agreements relating to joint ventures and other similar agreements entered into in the ordinary course of business, provided that if such joint venture is a Restricted Subsidiary, such provisions will not materially affect the Company’s ability to make anticipated principal or interest payments on the Securities (as determined by the Board of Directors of the Company);
(viii)	net worth provisions in leases and other agreements entered into by the Company or any Restricted Subsidiary in the ordinary course of business;
(ix)	encumbrances or restrictions arising or existing by reason of applicable law or any applicable rule, regulation or order;
(x)	encumbrances or restrictions contained in indentures or debt instruments or other debt arrangements Incurred or Preferred Stock issued by Subsidiary Guarantors in accordance with Section 3.2, that are not more restrictive, taken as a whole, than those applicable to the Company in either this Indenture or the Senior Secured Credit Agreement on the Issue Date (which results in encumbrances or restrictions comparable to those applicable to the Company at a Restricted Subsidiary level); and

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(xi) encumbrances or restrictions contained in indentures or other debt instruments or debt arrangements Incurred or Preferred Stock issued by Restricted Subsidiaries that are not Subsidiary Guarantors subsequent to the Issue Date pursuant to clauses (5), (12), (13) and (14) of the second paragraph of Section 3.2, by Restricted Subsidiaries, provided that such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Company’s ability to make anticipated principal or interest payments on the Securities (as determined by the Board of Directors of the Company).

          SECTION 3.5. Limitation on Sales of Assets and Subsidiary Stock. The Company will not, and will not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:

(1)	the Company or such Restricted Subsidiary, as the case may be, receives consideration at least equal to the fair market value (such fair market value to be determined on the date of contractually agreeing to such Asset Disposition), as determined in good faith by the Board of Directors (including as to the value of all non-cash consideration), of the shares and assets subject to such Asset Disposition;
(2)	except for any Permitted Asset Swap, at least 75% of the consideration from such Asset Disposition received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; and
(3)	an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Company or such Restricted Subsidiary, as the case may be:
	(a) to the extent the Company or any Restricted Subsidiary, as the case may be, elects (or is required by the terms of any Senior Indebtedness or Guarantor Senior Indebtedness) to prepay, repay or purchase secured Senior Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) or secured Guarantor Senior Indebtedness or secured Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor other than any Disqualified Stock or Guarantor Subordinated Obligations (in each case other than Indebtedness owed to the Company or an Affiliate of the Company) within 365 days from the later of the date of such Asset Disposition or the receipt of such Net Available Cash; provided, however, that, in connection with any prepayment, repayment or purchase of Indebtedness pursuant to this clause (a), the Company or such Restricted Subsidiary will retire such Indebtedness and will cause the related commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased; or
	(b) to invest in Additional Assets within 365 days from the later of the date of such Asset Disposition or the receipt of such Net Available Cash;

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provided, however, that with respect to Asset Dispositions of Collateral, such Additional Assets are added to the Collateral with the exception of Net Available Cash not to exceed $15.0 million that is invested in Additional Assets of Non-Guarantor Restricted Subsidiaries; provided that pending the final application of any such Net Available Cash in accordance with clause (a) or clause (b) above, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness or otherwise invest such Net Available Cash in any manner not prohibited by this Indenture; provided, further that in the case of an Asset Disposition of Collateral, any cash will be deposited in accordance with the Intercreditor Agreement.

          Any Net Available Cash from Asset Dispositions that are not applied or invested as provided in the preceding paragraph will be deemed to constitute “Excess Proceeds.” To the extent that the aggregate amount of Excess Proceeds exceeds $10.0 million on the 366^th day after an Asset Disposition, first, the Company will be required to make an offer to purchase the Floating Rate Notes and other secured Indebtedness that is pari passu with the Floating Rate Notes pursuant to Section 3.5 of the Floating Rate Notes Indenture. If Excess Proceeds remain, the Company will be required to make an offer (“Asset Disposition Offer”) to all Holders of Securities and to the extent required by the terms of other Pari Passu Secured Indebtedness, to all holders of other Pari Passu Secured Indebtedness outstanding with similar provisions requiring the Company to make an offer to purchase such Pari Passu Secured Indebtedness with the proceeds from any Asset Disposition (“Pari Passu Notes”), to purchase the maximum principal amount of Securities and any such Pari Passu Notes to which the Asset Disposition Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount of the Securities and Pari Passu Notes plus accrued and unpaid interest to the date of purchase, in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Notes, as applicable, and in compliance with the Intercreditor Agreement. To the extent that the aggregate amount of Securities and Pari Passu Notes so validly tendered and not properly withdrawn pursuant to an Asset Disposition Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate purposes, subject to other covenants contained in this Indenture. If the aggregate principal amount of Securities surrendered by Holders thereof and other Pari Passu Notes surrendered by holders or lenders, collectively, exceeds the amount of Excess Proceeds, the Trustee shall select the Securities and Pari Passu Notes to be purchased on a pro rata basis on the basis of the aggregate principal amount of tendered Securities and Pari Passu Notes. Upon completion of such Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero.

          The Asset Disposition Offer will remain open for a period of 20 Business Days following its commencement, except to the extent that a longer period is required by applicable law (the “Asset Disposition Offer Period”). The Company will mail a notice of an Asset Disposition Offer first class, postage prepaid, to the record holders shown on the register of Holders within 20 days following the 366th day referred to in the second paragraph of this Section 3.5 with a copy to the Trustee, offering to purchase the Securities and Pari Passu Notes as described above. Each notice of an Asset Disposition Offer shall state, among other things, the purchase date, which must be no earlier than 30 days nor later than 60 days from the date the

65

notice is mailed, subject to applicable law (the “Asset Disposition Purchase Date”). No later than five Business Days after the termination of the Asset Disposition Offer Period, the Company will purchase the principal amount of Securities and Pari Passu Notes required to be purchased pursuant to this Section 3.5 (the “Asset Disposition Offer Amount”) or, if less than the Asset Disposition Offer Amount has been so validly tendered, all Securities and Pari Passu Notes validly tendered in response to the Asset Disposition Offer.

          If the Asset Disposition Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest will be paid to the Person in whose name a Security is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Securities pursuant to the Asset Disposition Offer.

          On or before the Asset Disposition Purchase Date, the Company will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Asset Disposition Offer Amount of Securities and Pari Passu Notes or portions of Securities and Pari Passu Notes so validly tendered and not properly withdrawn pursuant to the Asset Disposition Offer, or if less than the Asset Disposition Offer Amount has been validly tendered and not properly withdrawn, all Securities and Pari Passu Notes so validly tendered and not properly withdrawn. The Company will deliver to the Trustee an Officers’ Certificate stating that such Securities or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.5 and, in addition, the Company will deliver all certificates and securities required, if any, by the agreements governing the Pari Passu Notes. The Company or the Paying Agent, as the case may be, will promptly (but in any case not later than five Business Days after the Asset Disposition Purchase Date) mail or deliver to each tendering Holder of Securities or holder or lender of Pari Passu Notes, as the case may be, an amount equal to the purchase price of the Securities or Pari Passu Notes so validly tendered and not properly withdrawn by such holder or lender, as the case may be, and accepted by the Company for purchase, and the Company will promptly issue a new Security, and the Trustee, upon delivery of an Officers’ Certificate from the Company, will authenticate and mail or deliver such new Security to such Holder, in a principal amount equal to any unpurchased portion of the Security surrendered. In addition, the Company will take any and all other actions required by the agreements governing the Pari Passu Notes. Any Security not so accepted will be promptly mailed or delivered by the Company to the Holder thereof. The Company will publicly announce the results of the Asset Disposition Offer on the Asset Disposition Purchase Date.

          For the purposes of clause (2) of this Section 3.5, the following will be deemed to be cash:

(1) any liabilities as shown on the most recent consolidated balance sheet of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Securities) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability; and

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(2) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash, to the extent of the cash received in that conversion, with 90 days following the closing of such Asset Disposition.

          The Company will comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws or regulations in connection with the repurchase of Securities pursuant to this Indenture. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 3.5, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Indenture by virtue of any conflict.

          SECTION 3.6. Limitation on Liens. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer to exist any Lien (other than Permitted Liens) upon any of its property or assets (including Capital Stock of Restricted Subsidiaries), whether owned on the Issue Date or acquired after that date, which Lien is securing any Indebtedness, unless contemporaneously with the Incurrence of such Liens effective provision is made to secure the Indebtedness due under this Indenture and the Securities or, in respect of Liens on any Restricted Subsidiary’s property or assets, any Subsidiary Guarantee of such Restricted Subsidiary, equally and ratably with (or senior in priority to in the case of Liens with respect to Subordinated Obligations or Guarantor Subordinated Obligations, as the case may be) the Indebtedness secured by such Lien for so long as such Indebtedness is so secured. In addition, if the Company or any Subsidiary Guarantor, directly or indirectly, shall create, Incur or suffer to exist any Lien (other than Permitted Liens) securing any Credit Agreement Obligations or obligations in respect of the Floating Rate Notes, the Company or such Subsidiary Guarantor, as the case may be, must concurrently grant at least a third-priority Lien upon such property as security for the Securities.

          SECTION 3.7. Limitation on Affiliate Transactions. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or conduct any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of the Company (an “Affiliate Transaction”) unless:

(1)	the terms of such Affiliate Transaction are no less favorable to the Company or such Restricted Subsidiary, as the case may be, than those that could be obtained in a comparable transaction at the time of such transaction in arm’s-length dealings with a Person who is not such an Affiliate;
(2)	in the event such Affiliate Transaction involves an aggregate consideration in excess of $5.0 million, the terms of such transaction have been approved by a majority of the members of the Board of Directors of the

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Company and by a majority of the members of such Board having no personal stake in such transaction, if any (and such majority or majorities, as the case may be, determines that such Affiliate Transaction satisfies the criteria in clause (1) above); and

(3) in the event such Affiliate Transaction involves an aggregate consideration in excess of $10.0 million, the Company has received a written opinion from an independent investment banking, accounting or appraisal firm of nationally recognized standing that such Affiliate Transaction is not materially less favorable than those that might reasonably have been obtained in a comparable transaction at such time on an arm’s-length basis from a Person that is not an Affiliate.

The preceding paragraph will not apply to:

(1)	any Restricted Payment (other than a Restricted Investment) permitted to be made pursuant to Section 3.3;
(2)	any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements and other compensation arrangements, options to purchase Capital Stock of the Company restricted stock plans, long-term incentive plans, stock appreciation rights plans, participation plans or similar employee benefits plans, pension plans or similar plans and/or indemnity provided on behalf of directors, officers and employees approved by the Board of Directors of the Company;
(3)	loans or advances to employees, officers or directors of the Company or any Restricted Subsidiary of the Company in the ordinary course of business consistent with past practices, in an aggregate amount outstanding at any time not in excess of $2.5 million (without giving effect to the forgiveness of any such loan);
(4)	any transaction between the Company and a Restricted Subsidiary or between Restricted Subsidiaries and any Guarantees issued by the Company or a Restricted Subsidiary for the benefit of the Company or a Restricted Subsidiary, as the case may be, in accordance with Section 3.2;
(5)	the payment of reasonable and customary fees paid to, and indemnity provided on behalf of, directors of the Company or any Restricted Subsidiary;
(6)	the existence of, and the performance of obligations of the Company or any of its Restricted Subsidiaries under the terms of any agreement to which the Company or any of its Restricted Subsidiaries is a party as of or on the Issue Date, as these agreements may be amended, modified, supplemented, extended or renewed from time to time; provided, however, that any future amendment, modification, supplement, extension or

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renewal entered into after the Issue Date will be permitted to the extent that its terms are not more disadvantageous to the Holders of the Securities than the terms of the agreements in effect on the Issue Date;

(7)

transactions with customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of the business of the Company and its Restricted Subsidiaries and otherwise in compliance with the terms of this Indenture; provided that in the reasonable determination of the members of the Board of Directors or senior management of the Company, such transactions are on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and

(8)

any issuance or sale of Capital Stock (other than Disqualified Stock) to Affiliates of the Company and the granting of registration and other customary rights in connection therewith.

          SECTION 3.8. Limitation on Sale of Capital Stock of Restricted Subsidiaries. The Company will not, and will not permit any Restricted Subsidiary to, transfer, convey, sell, lease or otherwise dispose of any Voting Stock of any Restricted Subsidiary or to issue any of the Voting Stock of a Restricted Subsidiary (other than, if necessary, shares of its Voting Stock constituting directors’ qualifying shares) to any Person except:

(1)

to the Company or a Wholly-Owned Subsidiary; or

(2)

in compliance with Section 3.5 and immediately after giving effect to such issuance or sale, such Restricted Subsidiary either continues to be a Restricted Subsidiary or if such Restricted Subsidiary would no longer be a Restricted Subsidiary, then the Investment of the Company in such Person (after giving effect to such issuance or sale) would have been permitted to be made under Section 3.3 as if made on the date of such issuance or sale.

          Notwithstanding the preceding paragraph, the Company and any Restricted Subsidiary may sell all the Voting Stock of a Restricted Subsidiary as long as the Company and its Restricted Subsidiaries comply with the terms of Section 3.5.

          SECTION 3.9. Limitation on Lines of Business. The Company will not, and will not permit any Restricted Subsidiary to, engage in any business other than a Related Business.

          SECTION 3.10. Change of Control. If a Change of Control occurs, each Holder shall have the right to require the Company to repurchase all or any part of such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount of the Securities plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

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          Within 30 days following any Change of Control, the Company shall mail a notice (the “Change of Control Offer”) to each Holder, with a copy to the Trustee, stating:

(1)	that a Change of Control has occurred and that such Holder has the right to require the Company to purchase such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount of such Securities plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on a record date to receive interest on the relevant interest payment date) (the “Change of Control Payment”);
(2)	the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed) (the “Change of Control Payment Date”); and
(3)	the procedures determined by the Company, consistent with this Indenture, that a Holder must follow in order to have its Securities repurchased.

          On the Change of Control Payment Date, the Company shall, to the extent lawful:

(1)	accept for payment all Securities or portions of Securities properly tendered pursuant to the Change of Control Offer;
(2)	deposit with the Initial Holder or, if appointed, the Paying Agent an amount equal to the Change of Control Payment in respect of all Securities or portions of Securities so tendered; and
(3)	deliver or cause to be delivered to the Trustee the Securities so accepted together with an Officers’ Certificate stating the aggregate principal amount of Securities or portions of Securities being purchased by the Company.

          The Paying Agent shall promptly mail to each Holder of Securities so tendered the Change of Control Payment for such Securities, and the Company shall deliver and the Trustee shall promptly authenticate and the Company, or the Trustee if appointed, shall mail (or cause to be transferred by book entry) to each Holder a new Security equal in principal amount to any unpurchased portion of the Securities surrendered, if any.

          If the Change of Control Payment Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest, if any, will be paid to the Person in whose name a Security is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender pursuant to the Change of Control Offer.

          The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

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          Prior to making a Change of Control payment, and as a condition to such payment, (i) all Senior Indebtedness must be repaid in full, or the Company must offer to repay all Senior Indebtedness and make payment to the holders that accept such offer and obtain waivers of any event of default from the remaining holders of such Senior Indebtedness or (ii) the requisite holders of each issue of Senior Indebtedness shall have consented to such Change of Control payment being made. The Company covenants to effect such repayment or obtain such consent prior to the Change of Control Payment Date, it being a default of this Section 3.11 if the Company fails to comply with this provision.

          The Company will not be required to make a Change of Control Offer upon a Change of Control if (i) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all Securities validly tendered and not withdrawn under such Change of Control Offer or (ii) a notice of redemption has been given pursuant to Article V of this Indenture, unless and until there is a default in payment of the applicable redemption price.

          The Company shall comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws or regulations thereunder in connection with the repurchase of Securities pursuant to this Section 3.11. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue of the conflict.

          SECTION 3.11. SEC Reports. Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, to the extent permitted by the Exchange Act, the Company will file with the SEC, and make available to the Initial Holder, the Trustee and the registered Holders of the Securities:

(1)

all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were required to file such Forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by the Company’s certified independent accountants; and

(2)

all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports.

          In the event that the Company is not permitted to file such reports, documents and information with the SEC pursuant to the Exchange Act, the Company will nevertheless make available such Exchange Act information to the Initial Holder, the Trustee and the Holders of the Securities as if the Company were subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act within 15 days of the time periods specified therein or in the relevant Forms.

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          If the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes to the financial statements and in Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the financial condition and results of operations of the Company and its Restricted Subsidiaries.

          The Parent may satisfy the obligations of the Company set forth above; provided that (x) the financial information filed with the SEC or delivered to Holders pursuant to this covenant should include consolidating financial statements for the Parent, the Company, the Subsidiary Guarantors and the Subsidiaries that are not Subsidiary Guarantors in the form prescribed by the SEC and (y) the Parent is not engaged in any business in any material respect other than incidental to its ownership, directly or indirectly, of the Company.

          SECTION 3.12. Future Subsidiary Guarantors. The Company will cause each Restricted Subsidiary that Guarantees, on the Issue Date or any time thereafter, any Indebtedness of the Company or any Subsidiary Guarantor to execute and deliver to the Initial Holder or the Trustee a supplemental indenture pursuant to which such Restricted Subsidiary will unconditionally Guarantee, on a joint and several basis, the full and prompt payment of the principal of, premium, if any, and interest (including Additional Interest, if any) in respect of the Securities on a senior subordinated secured basis and all other obligations under this Indenture. Each Restricted Subsidiary that becomes a Subsidiary Guarantor after the Issue Date will also become a party to the Collateral Documents and the Intercreditor Agreement and will take such actions as are necessary or advisable to grant to the Collateral Agent for the benefit of the Initial Holder or Trustee, the Collateral Agent and the holders of the Securities a perfected and at least third-priority security interest in any Collateral held by such Restricted Subsidiary, subject to Permitted Liens. Notwithstanding the foregoing, in the event (a) a Subsidiary Guarantor is released and discharged in full from all of its obligations under its Guarantee of (1) Indebtedness under the Senior Secured Credit Agreement and (2) all other Indebtedness of the Company and its Restricted Subsidiaries, including a Guarantee under the indenture governing the Floating Rate Notes, and (b) such Subsidiary Guarantor has not Incurred any Indebtedness in reliance on its status as a Subsidiary Guarantor under Section 3.2 or such Subsidiary Guarantor’s obligations under such Indebtedness are satisfied in full and discharged or are otherwise permitted to be Incurred by a Restricted Subsidiary (other than a Subsidiary Guarantor) under the second paragraph of Section 3.2, then the Subsidiary Guarantee and the obligations of such Subsidiary Guarantor under the Collateral Documents and Intercreditor Agreement of such Subsidiary Guarantor shall be automatically and unconditionally released or discharged.

          SECTION 3.13. Maintenance of Office or Agency. If a Trustee is appointed, the Company shall maintain an office or agency where the Securities may be presented or surrendered for payment, where, if applicable, the Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served at such address in the Borough of Manhattan, The City of New York as the agent shall designate upon request therefor from the Company or any Holder and this address shall be such office or agency of the Company, unless the Company shall designate and maintain some other office or agency for one or more of such purposes. The Company shall give prompt written notice to the Trustee of any change in the location of any

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such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Agent of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

          The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation. The Company shall give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such other office or agency.

          SECTION 3.14. Corporate Existence. Except as otherwise provided in Article III, Article IV and Section 10.2(b), the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate, partnership, limited liability company or other existence of each Subsidiary Guarantor, if any, in accordance with their respective organizational documents (as the same may be amended from time to time) and the rights (charter and statutory) licenses and franchises of the Company and each such Subsidiary Guarantor; provided, however, that the Company shall not be required to preserve any such right, license or franchise or the corporate, partnership, limited liability company or other existence of any Subsidiary Guarantor if the Board of Directors of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and each of its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not, and will not be, disadvantageous in any material respect to the Holders; provided, further, that the foregoing shall not prohibit a sale, transfer, or conveyance of a Restricted Subsidiary or any of its assets in compliance with the terms of this Indenture.

          SECTION 3.15. Payment of Taxes and Other Claims. The Company shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all material taxes, assessments and governmental charges levied or imposed upon the Company or any Restricted Subsidiary or upon the income, profits or property of the Company or any Restricted Subsidiary and (ii) all lawful claims for labor, materials and supplies, which, if unpaid, might by law become a material liability or lien upon the property of the Company or any Restricted Subsidiary; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim the amount, applicability or validity of which is being contested in good faith by appropriate actions and for which appropriate reserves, if necessary (in the good faith judgment of management of the Company), are being maintained in accordance with GAAP or where the failure to effect such payment will not be disadvantageous to the Holders.

          SECTION 3.16. Payments for Consent. Neither the Company nor any of its Restricted Subsidiaries will, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fees or otherwise, to any Holder of any Securities for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Securities unless such consideration is offered to be paid or is paid to all Holders of the Securities that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or amendment.

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          SECTION 3.17. Compliance Certificate. The Company shall deliver to the Initial Holder or the Trustee within 120 days after the end of each fiscal year of the Company an Officers’ Certificate stating that in the course of the performance by the signers of their duties as Officers of the Company they would normally have knowledge of any Default or Event of Default and whether or not the signers know of any Default or Event of Default that occurred during the previous fiscal year. If they do, the certificate shall describe the Default or Event of Default, its status and the action the Company is taking or proposes to take with respect thereto. The Company also shall comply with TIA § 314(a)(4) and until such time as a Trustee is appointed, shall deliver all reports and required by TIA § 314(a)(4) to be delivered to the Trustee, to the Initial Holder.

          SECTION 3.18. Further Instruments and Acts. Upon request of the Initial Holder or the Trustee or as necessary to comply with any future developments or requirements, the Company shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture with respect to such future developments or requirements.

          SECTION 3.19. Statement by Officers as to Default. The Company shall deliver to the Initial Holder or the Trustee, as soon as possible and in any event within 30 days after the occurrence of any Event of Default or an event which, with notice or the lapse of time or both, would constitute an Event of Default, an Officers’ Certificate setting forth the details of such Event of Default or Default, its status and the actions which the Company is taking or proposes to take with respect thereto.

          SECTION 3.20. Limitation on Layering. The Company will not Incur any Indebtedness if such Indebtedness is contractually subordinate or junior in ranking in any respect to any Senior Indebtedness unless such Indebtedness is Senior Subordinated Indebtedness or is contractually subordinated in right of payment to Senior Subordinated Indebtedness. No Note Guarantor will Incur any Indebtedness if such Indebtedness is contractually subordinate or junior in ranking in any respect to any Guarantor Senior Indebtedness of such Note Guarantor unless such Indebtedness is Guarantor Senior Subordinated Indebtedness of such Subsidiary Guarantor or is contractually subordinated in right of payment to Guarantor Senior Subordinated Indebtedness of such Subsidiary Guarantor.

ARTICLE IV
SUCCESSOR COMPANY

          SECTION 4.1. Merger and Consolidation. The Company will not consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person, unless:

(1) the resulting, surviving or transferee Person (the “Successor Company”) will be a corporation organized and existing under the laws of the United States of America, any State of the United States or the District of Columbia and the Successor Company (if not the Company) will expressly assume, by supplemental indenture, executed and delivered to the Initial Holder or the Trustee, in form satisfactory to such Person, all the

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obligations of the Company under the Securities and this Indenture and will expressly assume, by written agreement all the obligations of the Company under the the Collateral Documents and the Intercreditor Agreement and the Successor Company shall cause such amendments, supplements or other instruments to be executed, filed, and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral pledged by or transferred to such Person, together with such financing statements or comparable documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions, in each case in a form reasonably satisfactory to the Initial Holder or the Trustee;

(2)	immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Company or any Subsidiary of the Successor Company as a result of such transaction as having been Incurred by the Successor Company or such Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing;
(3)	immediately after giving effect to such transaction, the Successor Company would (i) be able to Incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of Section 3.2 or (ii) have a Consolidated Coverage Ratio of not less than the Consolidated Coverage Ratio of the Company immediately prior to such transaction;
(4)	each Note Guarantor (unless it is the other party to the transactions above, in which case clause (1) shall apply) shall have by supplemental indenture confirmed that its Note Guarantee shall apply to such Person’s obligations in respect of this Indenture and the Securities and shall have by written agreement confirmed that its obligations under the the Collateral Documents and the Intercreditor Agreement shall continue to be in effect and shall cause such amendments, supplements or other instruments to be executed, filed, and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral pledged by such Note Guarantor, together with such financing statements or comparable documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions, in each case in a form reasonably satisfactory to the Initial Holder or the Trustee; and

(5) the Company shall have delivered to the Initial Holder or the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any)

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comply with this Indenture, the Collateral Documents and the Intercreditor Agreement.

Notwithstanding the preceding clause (3), (x) any Restricted Subsidiary may consolidate with, merge into or transfer all or part of its properties and assets to the Company and (y) the Company may merge with an Affiliate incorporated solely for the purpose of reincorporating the Company in another jurisdiction; provided that, in the case of a Restricted Subsidiary that merges into the Company, the Company will not be required to comply with the preceding clause (5).

          Parent will not consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person, unless:

(1)	the resulting, surviving or transferee Person (the “Successor Parent”) will be a corporation organized and existing under the laws of the United States of America, any State of the United States or the District of Columbia, the Successor Parent (if not the Parent) will expressly assume, by supplemental indenture (and other applicable documents), executed and delivered to the Initial Holder or the Trustee, in form satisfactory to such Person, all the obligations of the Parent under its Note Guarantee, this Indenture, the Collateral Documents, the Intercreditor Agreement and the Successor Parent shall cause such amendments, supplements or other instruments to be executed, filed, and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral pledged by or transferred to such Person, together with such financing statements or comparable documents as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions, in each case in a form reasonably satisfactory to the Initial Holder or the Trustee;
(2)	immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the Successor Parent or any Subsidiary of the Successor Parent as a result of such transaction as having been Incurred by the Successor Parent or such Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; and
(3)	the Company shall have delivered to the Initial Holder or the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture, the Collateral Documents and the Intercreditor Agreement.

          For purposes of this Section 4.1, the sale, lease, conveyance, assignment, transfer, or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Company, which properties and assets, if held by the Parent or the Company

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instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Parent or the Company on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Parent and the Company.

          The predecessor Company will be released from its obligations under this Indenture and the Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture, the Collateral Documents and the Intercreditor Agreement, but, in the case of a lease of all or substantially all its assets, the predecessor Company will not be released from the obligation to pay the principal of and interest on the Securities or any obligation under the Collateral Documents and the Intercreditor Agreement.

          In addition, the Company will not permit any Subsidiary Guarantor to consolidate with, merge with or into any Person (other than another Subsidiary Guarantor) and will not permit the conveyance, transfer or lease of all or substantially all of the assets of any Subsidiary Guarantor (other than to another Subsidiary Guarantor) unless:

(1) (a) if such entity remains a Subsidiary Guarantor, the resulting, surviving or transferee Person will be a corporation, partnership, trust or limited liability company organized and existing under the laws of the United States of America, any State of the United States or the District of Columbia; (b) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the resulting, surviving or transferee Person or any Restricted Subsidiary as a result of such transaction as having been Incurred by such Person or such Restricted Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; (c) the resulting, surviving or transferee Person assumes all the obligations of such Subsidiary Guarantor pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Initial Holder or the Trustee under the Securities, this Indenture, the Collateral Documents, the Intercreditor Agreement and shall cause such amendments, supplements or other instruments to be executed, filed and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral pledged by or transferred to the surviving entity, together with such financing statements or comparable documents as may be required to perfect any security interest in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions in each case in a form reasonably satisfactory to the Initial Holder or the Trustee; and (d) the Company will have delivered to the Initial Holder or the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture; and

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(2) the transaction is made in compliance with Section 3.5 (it being understood that only such portion of the Net Available Cash as is required to be applied on the date of such transaction in accordance with the terms of this Indenture needs to be applied in accordance therewith at such time), Section 3.9 and this Section 4.1.

ARTICLE V
REDEMPTION OF SECURITIES

          SECTION 5.1. Redemption. The Securities may be redeemed, as a whole or from time to time in part, subject to the conditions and at the redemption prices specified in paragraph 5 of the form of Securities set forth in Exhibit A hereto, which are hereby incorporated by reference and made a part of this Indenture, together with accrued and unpaid interest, if any, to the Redemption Date.

          SECTION 5.2. Applicability of Article. Redemption of Securities at the election of the Company or otherwise, as permitted or required by any provision of this Indenture, shall be made in accordance with such provision and this Article.

          SECTION 5.3. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Securities pursuant to Section 5.1 shall be evidenced by a Board Resolution of the Company. In case of any redemption at the election of the Company, the Company shall, upon not later than the earlier of the date that is 45 days prior to the Redemption Date fixed by the Company or the date on which notice is given to the Holders (except as provided under Section 5.5 or unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities to be redeemed and shall deliver to the Trustee such documentation and records as shall enable the Trustee to select the Securities to be redeemed pursuant to Section 5.4. Any such notice may be cancelled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect.

          SECTION 5.4. Selection by Trustee of Securities to Be Redeemed. If less than all the Securities are to be redeemed at any time pursuant to an optional redemption, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the outstanding Securities not previously called for redemption, in compliance with the requirements of the principal national securities exchange, if any, on which such Securities are listed, or, if such Securities are not so listed, on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem fair and appropriate (and in such manner as complies with applicable legal requirements) and which may provide for the selection for redemption of portions of the principal of the Securities.

          The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the method it has chosen for the selection of Securities and the principal amount thereof to be redeemed.

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          For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed.

          SECTION 5.5. Notice of Redemption. Notice of redemption shall be given in the manner provided for under Section 12.2 not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed. At the Company’s request, the Trustee shall give notice of redemption in the Company’s name and at the Company’s expense; provided, however, that the Company shall deliver to the Trustee, at least 45 days prior to the Redemption Date, an Officers’ Certificate requesting that the Trustee give such notice at the Company’s expense and the form of notice that shall include the following items.

          All notices of redemption shall state:

          (1) the Redemption Date,

     (2) the redemption price and the amount of accrued interest to the Redemption Date payable as provided under Section 5.7, if any,

     (3) if less than all outstanding Securities are to be redeemed, the identification of the particular Securities (or portion thereof) to be redeemed, as well as the aggregate principal amount of Securities to be redeemed and the aggregate principal amount of Securities to be outstanding after such partial redemption,

     (4) in case any Security is to be redeemed in part only, the notice which relates to such Security shall state that on and after the Redemption Date, upon surrender of such Security, the Holder will receive, without charge, a new Security or Securities of authorized denominations for the principal amount thereof remaining unredeemed,

     (5) that on the Redemption Date the redemption price (and accrued interest, if any, to the Redemption Date payable as provided under Section 5.7) will become due and payable upon each such Security, or the portion thereof, to be redeemed, and, unless the Company defaults in making the redemption payment, that interest on Securities called for redemption (or the portion thereof) will cease to accrue on and after said date,

     (6) the place or places where such Securities are to be surrendered for payment of the redemption price and accrued interest, if any,

     (7) the name and address of the Paying Agent,

     (8) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price,

     (9) the CUSIP, Common Code and ISIN numbers, if applicable, and that no representation is made as to the accuracy or correctness of the CUSIP, Common Code and ISIN numbers, if applicable, if any, listed in such notice or printed on the Securities, and

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     (10) the paragraph of the Securities pursuant to which the Securities are to be redeemed.

          SECTION 5.6. Deposit of Redemption Price. Prior to 10:00 a.m., New York City time, on any Redemption Date, the Company shall deposit with the Initial Holder or, if one has been appointed, the Trustee or with a Paying Agent (or, if the Company or any of the Company’s Subsidiaries is acting as its own Paying Agent, segregate and hold in trust as provided under Section 2.4) an amount of money sufficient to pay the redemption price of, and accrued interest on, all the Securities which are to be redeemed on that date, other than Securities or portions of Securities called for redemption that are beneficially owned by the Company and have been delivered to the Company or by the Company to the Trustee for cancellation.

          SECTION 5.7. Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Securities or portions of Securities so to be redeemed shall, on the Redemption Date, become due and payable at the redemption price therein specified (together with accrued interest, if any, to the Redemption Date), and on and after such date (unless the Company shall default in the payment of the redemption price and accrued interest) such Securities shall cease to bear interest and the only right of the Holders thereof will be to receive payment of the redemption price and, subject to the next sentence, unpaid interest on such Securities to the Redemption Date. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the redemption price, together with accrued interest, if any, to the Redemption Date (subject to the rights of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

          If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the unpaid principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate borne by the Securities.

          SECTION 5.8. Securities Redeemed in Part . Any Security which is to be redeemed only in part (pursuant to the provisions of this Article) shall be surrendered to the Company or at the office or agency of the Company if one is maintained for such purpose pursuant to Section 3.14 (with, if the Company or the Trustee so require, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by the Holder thereof or such Holder’s attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Security at the expense of the Company, a new Security or Securities, of any authorized denomination as requested by such Holder, in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.

ARTICLE VI
DEFAULTS AND REMEDIES

          SECTION 6.1. Events of Default. Each of the following is an event of default (an “Event of Default”):

(1) default in any payment of interest on any Security when due, continued for 30 days, whether or not such payment is prohibited by the provisions of Article X and Section 11.5;

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(2)	default in the payment of principal of or premium, if any, on any Security when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise, whether or not such payment is prohibited by the provisions of Article X and Section 11.5;
(3)	failure by the Company or any Note Guarantor to comply with its obligations under Section 4.1;
(4)	failure by the Company or any Note Guarantor to comply for 30 days after notice as provided below with (a) any of its obligations under Article III (in each case, other than a failure to purchase Securities that will constitute an Event of Default under clause (2) above and other than a failure to comply with Section 4.1, which will constitute an Event of Default under clause 3 of this section) or (b) any of its agreements contained in the Collateral Documents or Intercreditor Agreement;
(5)	failure by the Company or any Note Guarantor to comply for 60 days after notice as provided below with its other agreements contained in this Indenture;
(6)	default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), other than Indebtedness owed to the Company or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists, or is created after the Issue Date, which default:

(a)	is caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness (“payment default”); or
(b)	results in the acceleration of such Indebtedness prior to its maturity (the “cross acceleration provision”);

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates $15.0 million or more;

(7) (a) the Company or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:

(i) commences a voluntary case or proceeding;

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(ii)	consents to the entry of judgment, decree or order for relief against it in an involuntary case or proceeding;
(iii)	consents to the appointment of a Custodian of it or for any substantial part of its property;
(iv)	makes a general assignment for the benefit of its creditors;
(v)	consents to or acquiesces in the institution of a bankruptcy or an insolvency proceeding against it;
(vi)	takes any corporate action to authorize or effect any of the foregoing;
(vii)	takes any comparable action under any foreign laws relating to insolvency; or

(b) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i)	is for relief in an involuntary case against the Company or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted
	Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law;
(ii)	appoints a Custodian for all or substantially all of the property of the Company or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law; or
(iii)	orders the winding up or liquidation of the Company or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law; and
(iv)	in each case the order, decree or relief remains unstayed and in effect for 60 days;

(8) failure by the Company or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited

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	consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary to pay final judgments aggregating in excess of $15.0 million (net of any amounts that a reputable and creditworthy insurance company has acknowledged liability for in writing), which judgments are not paid, discharged or stayed for a period of 60 days (the “judgment default provision”);
(9)	any Subsidiary Guarantee, Collateral Document or obligation under the Intercreditor Agreement of a Significant Subsidiary or group of Restricted Subsidiaries that taken together as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries would constitute a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms of this Indenture) or is declared null and void in a judicial proceeding or any Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary Guarantors that taken together as of the latest audited consolidated financial statements of the Company and its Restricted Subsidiaries would constitute a Significant Subsidiary denies or disaffirms its obligations under this Indenture, its Subsidiary Guarantee, any Collateral Document or the Intercreditor Agreement; or
(10)	with respect to any Collateral having a fair market value in excess of $15.0 million, individually or in the aggregate, (A) the security interest under the Collateral Documents, at any time, ceases to be in full force and effect for any reason other than in accordance with their terms and the terms of this Indenture and other than the satisfaction in full of all obligations under this Indenture and discharge of this Indenture, (B) any security interest created thereunder or under this Indenture is declared invalid or unenforceable or (C) the Company or any Note Guarantor asserts, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable.

However, a default under clauses (4) and (5) of this paragraph will not constitute an Event of Default until either (i) the Initial Holder, (ii) the Trustee or (iii) the Holders of 25% in principal amount of the outstanding Securities notify the Company of the default and the Company does not cure such default within the time specified in clauses (4) and (5) of this paragraph after receipt of such notice.

          The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

          SECTION 6.2. Acceleration. If an Event of Default (other than an Event of Default described in clause (7) of Section 6.1) occurs and is continuing, either (i) the Initial Holder by notice to the Company, (ii) the Trustee by notice to the Company, or (iii) the Holders of at least 25% in principal amount of the outstanding Securities by notice to the Company and

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the Trustee, may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued and unpaid interest, if any, on all the Securities to be due and payable. Upon such a declaration, such principal, premium and accrued and unpaid interest will be due and payable immediately.

          In the event of a declaration of acceleration of the Securities because an Event of Default described in clause (6) of Section 6.1 has occurred and is continuing, the declaration of acceleration of the Securities shall be automatically annulled if the default triggering such Event of Default pursuant to clause (6) of Section 6.1 shall be remedied or cured by the Company or a Restricted Subsidiary or waived by the Holders of the relevant Indebtedness within 20 days after the declaration of acceleration with respect thereto and if (1) the annulment of the acceleration of the Securities would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, except nonpayment of principal, premium or interest on the Securities that became due solely because of the acceleration of the Securities, have been cured or waived.

          If an Event of Default described in clause (7) of Section 6.1 occurs and is continuing, the principal of, premium, if any, and accrued and unpaid interest on all the Securities will become and be immediately due and payable without any declaration or other act on the part of the Initial Holder, the Trustee or any Holders.

          SECTION 6.3. Other Remedies . If an Event of Default occurs and is continuing, the Initial Holder or the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of (or premium, if any) or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture.

          The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Initial Holder or the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative.

          SECTION 6.4. Waiver of Past Defaults. The Initial Holder, if not Trustee has been appointed, or the Holders of a majority in principal amount of the outstanding Securities by notice to the Trustee may (a) waive, by their consent (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities), an existing Default or Event of Default and its consequences, except a Default or Event of Default in the payment of the principal of, or premium, if any, or interest on a Security, and (b) rescind any such acceleration with respect to the Securities and its consequences if (1) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, other than the nonpayment of the principal of, premium, if any, and interest on the Securities that have become due solely by such declaration of acceleration, have been cured or waived. When a Default or Event of Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any consequent right.

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          SECTION 6.5. Control by Majority. If a Trustee has been appointed, the Holders of a majority in principal amount of the outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or the Collateral Agent or of exercising any trust or power conferred on the Trustee or the Collateral Agent. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, the Collateral Documents or the Intercreditor Agreement or, subject to Sections 7.1 and 7.2, that the Trustee determines is unduly prejudicial to the rights of any other Holder or would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

          SECTION 6.6. Limitation on Suits. Subject to the provisions of this Indenture relating to the duties of the Trustee or the Collateral Agent, if an Event of Default occurs and is continuing, the Trustee or the Collateral Agent will be under no obligation to exercise any of the rights or powers under this Indenture or the Collateral Documents at the request or direction of any of the Holders unless such Holders have offered to the Trustee or the Collateral Agent reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium, if any, or interest when due, no Holder may pursue any remedy with respect to this Indenture or the Securities unless:

(1)	such Holder has previously given the Trustee notice that an Event of Default is continuing;
(2)	Holders of at least 25% in principal amount of the outstanding Securities have requested the Trustee to pursue the remedy;
(3)	such Holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense;
(4)	the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity; and
(5)	the Holders of a majority in principal amount of the outstanding Securities have not given the Trustee a direction that, in the opinion of the Trustee, is inconsistent with such request within such 60-day period.

          A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.

          SECTION 6.7. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture (including Section 6.6), the right of any Holder to receive payment of principal of, premium, if any, or interest on the Securities held by such Holder, on or after the respective due dates expressed in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

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          SECTION 6.8. Collection Suit by Trustee. If an Event of Default specified in clauses (1) or (2) of Section 6.1 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for under Section 7.7.

          SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company, its Subsidiaries or its or their respective creditors or properties and, unless prohibited by law or applicable regulations, may be entitled and empowered to participate as a member of any official committee of creditors appointed in such matter and may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.7.

          SECTION 6.10. Priorities. If the Trustee collects any money or property pursuant to this Article VI, it shall pay out the money or property in the following order:

     FIRST: to the Trustee and Collateral Agent for amounts due under Section 7.7 and to the Collateral Agent for any other amounts due under the Collateral Documents;

          SECOND: to holders of the Floating Rate Notes for amounts due and unpaid on the Floating Rate Notes for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Floating Rate Notes for principal and interest, respectively;

          THIRD: to Holders for amounts due and unpaid on the Securities for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and

     FOURTH: to the Company or to whomever may be lawfully entitled to receive the same.

          The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10.

          SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in

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the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in outstanding principal amount of the Securities.

ARTICLE VII
TRUSTEE

          SECTION 7.1. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee will exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.

          (b) Except during the continuance of an Event of Default:

     (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

     (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates, opinions or orders furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

          (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

          (1) this paragraph does not limit the effect of paragraph (b) of this Section 7.1;

     (2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

     (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.5.

          (d) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.

          (e) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

          (f) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties

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hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

          (g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.1 and to the provisions of the TIA.

          (h) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company.

          (i) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee indemnity or security reasonably satisfactory to it against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities that might be incurred by it in compliance with such request or direction.

          SECTION 7.2. Rights of Trustee Subject to Section 7.1:

          (a) The Trustee may conclusively rely on any document (whether in its original or facsimile form) reasonably believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. The Trustee shall receive and retain financial reports and statements of the Company as provided herein, but shall have no duty to review or analyze such reports or statements to determine compliance under covenants or other obligations of the Company.

          (b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate and/or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officers’ Certificate or Opinion of Counsel.

          (c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

          (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers, unless the Trustee’s conduct constitutes willful misconduct or negligence.

          (e) The Trustee may consult with counsel of its selection, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

          (f) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the corporate trust

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office of the Trustee specified under Section 12.2, and such notice references the Securities and this Indenture.

          (g) The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder.

          (h) The Trustee shall not be deemed to have knowledge of any fact or matter unless such fact or matter is known to a Trust Officer of the Trustee.

          (i) Whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may request, and in the absence of bad faith or willful misconduct on its part, rely upon an Officers’ Certificate and an Opinion of Counsel.

          (j) The Trustee may request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person specified as so authorized in any such certificate previously delivered and not superseded.

          (k) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

          SECTION 7.3. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company, the Subsidiary Guarantors or their Affiliates with the same rights it would have if it were not Trustee. However, the Trustee must comply with Sections 7.10 and 7.11. In addition, the Trustee shall be permitted to engage in transactions with the Company; provided, however, that if the Trustee acquires any conflicting interest, as defined in TIA § 310(b), the Trustee must (i) eliminate such conflict within 90 days of acquiring such conflicting interest, (ii) apply to the SEC for permission to continue acting as Trustee or (iii) resign. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with like rights.

          SECTION 7.4. Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Securities, shall not be accountable for the Company’s use of the proceeds from the sale of the Securities, shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee or any money paid to the Company pursuant to the terms of this Indenture and shall not be responsible for any statement of the Company in this Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee’s certificate of authentication.

          SECTION 7.5. Notice of Defaults. If a Default occurs and is continuing and is known to the Trustee, the Trustee must mail to each Holder notice of the Default within 90 days

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after it occurs. Except in the case of a Default in the payment of principal of, premium, if any, or interest on any Security, the Trustee may withhold notice if and so long as a committee of Trust Officers of the Trustee in good faith determines that withholding notice is in the interests of the Holders.

          SECTION 7.6. Reports by Trustee to Holders. As promptly as practicable after each June 1 following the date of this Indenture beginning June 1, 2006, and in any event prior to July 1 in each year, the Trustee shall mail to each Holder a brief report dated as of such mail date that complies with TIA § 313(a) if and to the extent required thereby. The Trustee also shall comply with TIA § 313(b) and TIA § 313(c).

          A copy of each report at the time of its mailing to Holders shall be filed with the SEC and each stock exchange (if any) on which the Securities are listed. The Company agrees to notify promptly the Trustee whenever the Securities become listed on any stock exchange and of any delisting thereof and the Trustee shall comply with TIA § 313(d).

          SECTION 7.7. Compensation and Indemnity. The Company and each Subsidiary Guarantor, if any, shall be joint and severally liable for paying to each of the Trustee and Collateral Agent from time to time reasonable compensation for the Trustee’s acceptance of this Indenture and services hereunder and the Collateral Agent’s acceptance of the Collateral Documents and services thereunder, respectively, as the Company and the Trustee or the Collateral Agent, respectively, shall from time to time agree in writing. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company and each Subsidiary Guarantor, if any, shall be joint and severally liable for reimbursing the Trustee and the Collateral Agent upon request for all reasonable out-of-pocket expenses incurred or made by each of them, including costs of collection, costs of preparing and reviewing reports, certificates and other documents, costs of preparation and mailing of notices to Holders and reasonable fees and expenses of counsel retained by the Trustee or the Collateral Agent, as applicable, in addition to the compensation for each agent’s services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s or Collateral Agent’s (as applicable) agents, counsel, accountants and experts.

          The Company and each Subsidiary Guarantor (if any), jointly and severally, shall indemnify the Trustee against any and all loss, liability, damages, claims or expense (including reasonable attorneys’ fees and expenses) incurred by it without negligence, bad faith or willful misconduct on its part in connection with the administration of this trust and the performance of its duties hereunder, including the costs and expenses of enforcing this Indenture (including this Section 7.7) and of defending itself against any claims (whether asserted by any Holder, the Company or otherwise). The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company or any Subsidiary Guarantor of its obligations hereunder, except to the extent that they were prejudiced by such failure to notify. The Company shall defend the claim and the Trustee shall provide reasonable cooperation at the Company’s expense in the defense. The Trustee may have separate counsel and the Company and the Subsidiary Guarantors, if any, shall pay the fees and expenses of such counsel; provided that the Company shall not be required to pay such fees and expenses if they assume the Trustee’s defense, and, in the reasonable judgment of outside counsel to the Trustee, there is no conflict of interest between the Company and the Trustee in

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connection with such defense. Notwithstanding the foregoing, the Company and the Subsidiary Guarantors, if any, need not reimburse any expense or indemnify against any loss, liability or expense which is finally determined by a court of competent jurisdiction to have been caused by the Trustee’s own willful misconduct, negligence or bad faith.

          To secure the Company’s and the Subsidiary Guarantors’ payment obligations in this Section 7.7, each of the Trustee and the Collateral Agent shall have a lien prior to the Securities on all money or property held or collected by the Trustee or Collateral Agent other than money or property held in trust to pay principal of and interest on particular Securities. Such lien shall survive the satisfaction and discharge of this Indenture. Each of the Trustee’s and Collateral Agent’s rights to receive payment of any amounts due under this Section 7.7 shall not be subordinate to any other liability or Indebtedness of the Company or the Subsidiary Guarantors (if any).

          The Company’s and the Subsidiary Guarantors’ payment obligations pursuant to this Section 7.7 shall survive the discharge of this Indenture. When the Trustee or Collateral Agent incurs expenses after the occurrence of a Default specified in clause (7) of Section 6.1 with respect to the Company, the expenses are intended to constitute expenses of administration under any Bankruptcy Law.

          SECTION 7.8. Appointment and Replacement of Trustee. If at any time the Initial Holder transfers the Securities to any Person that is not an Affiliate of the Initial Holder, the Initial Holder shall appoint a Trustee that complies with Section 7.10. The Trustee may resign at any time by so notifying the Company in writing. The Holders of a majority in principal amount of the Securities may remove the Trustee by so notifying the removed Trustee in writing and may appoint a successor Trustee with the Company’s written consent, which consent will not be unreasonably withheld. The Company shall remove the Trustee if:

(1)	the Trustee fails to comply with Section 7.10;
(2)	the Trustee is adjudged bankrupt or insolvent;
(3)	a receiver or other public officer takes charge of the Trustee or its property; or
(4)	the Trustee otherwise becomes incapable of acting as trustee hereunder.

          If the Trustee resigns or is removed by the Company or by the Holders of a majority in principal amount of the Securities and such Holders do not reasonably promptly appoint a successor Trustee as described in the preceding paragraph, or if a vacancy exists in the office of the Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee.

          A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee, upon payment of its charges hereunder, shall

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promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for under Section 7.7.

          If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of at least 10% in principal amount of the Securities may petition, at the Company’s expense, any court of competent jurisdiction for the appointment of a successor Trustee.

          If the Trustee fails to comply with Section 7.10, unless the Trustee’s duty to resign is stayed as provided in TIA § 310(b), any Holder, who has been a bona fide holder of a Security for at least six months, may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

          Notwithstanding the replacement of the Trustee pursuant to this Section 7.8, the Company’s obligations under Section 7.7 shall continue for the benefit of the retiring Trustee.

          SECTION 7.9. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.

          In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture, any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; provided that the right to adopt the certificate of authentication of any predecessor Trustee or authenticate Securities in the name of any predecessor Trustee shall only apply to its successor or successors by merger, consolidation or conversion.

          SECTION 7.10. Eligibility; Disqualification. This Indenture shall always have a Trustee that satisfies the requirements of TIA § 310 in every respect. The Trustee shall have a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA § 310(b); provided, however, that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

          SECTION 7.11. Preferential Collection of Claims Against the Company. The Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.

          SECTION 7.12. Trustee’s Application for Instruction from the Company. Any application by the Trustee for written instructions from the Company may, at the option of the

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Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three Business Days after the date any officer of the Company actually receives such application, unless any such officer shall have consented in writing to any earlier date) unless prior to taking any such action (or the effective date in the case of an omission), the Trustee shall have received written instructions in response to such application specifying the action to be taken or omitted.

          SECTION 7.13. Paying Agents. The Company shall cause each Paying Agent other than the Trustee to execute and deliver to it and the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 7.13:

     (1) that it will hold all sums held by it as agent for the payment of principal of, or premium, if any, or interest on, the Securities (whether such sums have been paid to it by the Company or by any obligor on the Securities) in trust for the benefit of Holders of the Securities or the Trustee;

     (2) that it will at any time during the continuance of any Event of Default, upon written request from the Trustee, deliver to the Trustee all sums so held in trust by it together with a full accounting thereof; and

     (3) that it will give the Trustee written notice within three Business Days of any failure of the Company (or by any obligor on the Securities) in the payment of any installment of the principal of, premium, if any, or interest on, the Securities when the same shall be due and payable.

ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE

          SECTION 8.1. Discharge of Liability on Securities; Defeasance. (a) Subject to Section 8.1(c), when (i)(x) the Company delivers to the Initial Holder or the Trustee all outstanding Securities (other than Securities replaced pursuant to Section 2.9) for cancellation or (y) all outstanding Securities not theretofore delivered for cancellation have become due and payable, whether at maturity or upon redemption, or will become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Initial Holder or the Trustee for the giving of notice of redemption pursuant to Article V hereof and the Company or any Subsidiary Guarantor irrevocably deposits or causes to be deposited the with Initial Holder or with the Trustee as trust funds in trust solely for the benefit of the Holders money in U.S. dollars, U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Initial Holder or the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption; (ii) no Default or Event of Default shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit (other than a default resulting from borrowing of funds to be applied to such deposit and the grant of any Lien

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securing such borrowing) and such deposit will not result in a breach or violation of, or constitute a default under, the Senior Secured Credit Agreement or any other material instrument to which the Company or any Significant Subsidiary is a party or by which the Company or any Significant Subsidiary is bound; (iii) the Company or any Subsidiary Guarantor has paid or caused to be paid all sums payable to the Initial Holder or to the Trustee, if appointed under this Indenture and the Securities; and (iv) the Company has delivered irrevocable instructions to the Initial Holder or the Trustee under this Indenture to apply the deposited money toward the payment of such Securities at maturity or the Redemption Date, as the case may be, then upon demand of the Company (accompanied by an Officers’ Certificate and an Opinion of Counsel stating that all conditions precedent specified herein relating to the satisfaction and discharge of this Indenture have been complied with) this Indenture shall cease to be of further effect with respect to the Securities and the Initial Holder or the Trustee shall acknowledge satisfaction and discharge of this Indenture, at the cost and expense of the Company.

          (b) Subject to Sections 8.1(c) and 8.2, the Company and the Subsidiary Guarantors at any time may terminate (i) all their obligations under the Securities, this Indenture, the Collateral Documents and the Intercreditor Agreement, and cause the release of all Collateral under the Collateral Documents (“legal defeasance option”), and after giving effect to such legal defeasance, any omission to comply with such obligations shall no longer constitute a Default or Event of Default or (ii) their obligations under Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.16, 3.20 and 4.1(3), and the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply with such covenants shall no longer constitute a Default or an Event of Default under Sections 6.1(3) (only with respect to Section 4.1(3)), 6.1(4) (only with respect to such covenants), 6.1(5) (only with respect to such covenants), 6.1(6), 6.1(7) (with respect only to Significant Subsidiaries), 6.1(8) or 6.1(10) and the events specified in such Sections shall no longer constitute an Event of Default (clause (ii) being referred to as the “covenant defeasance option”), but except as specified above, the remainder of this Indenture and the Securities shall be unaffected thereby. The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option.

          If the Company exercises its legal defeasance option, payment of the Securities may not be accelerated because of an Event of Default and the Subsidiary Guarantees in effect at such time shall terminate. If the Company exercises its covenant defeasance option, payment of the Securities may not be accelerated because of an Event of Default specified under Sections

          6.1(3) (only with respect to Section 4.1(3)), 6.1(4) (only with respect to such covenants), 6.1(5) (only with respect to such covenants), 6.1(6), 6.1(7) (with respect only to Significant Subsidiaries) 6.1(8) or 6.1(10).

          Upon satisfaction of the conditions set forth herein and upon request of the Company, the Initial Holder or the Trustee shall acknowledge in writing the discharge of those obligations that the Company terminates.

          (c) Notwithstanding the provisions of Sections 8.1(a) and (b), the Company’s obligations under Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.9, 2.10, 2.11, 2.12, 3.1, 3.13, 3.14, 3.15, 3.17,

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3.18, 3.19, 6.7, 7.7 and 7.8 and in this Article VIII shall survive until the Securities have been paid in full. After the Securities have been paid in full, the Company’s obligations under Sections 7.7, 8.5 and 8.6 shall survive such satisfaction and discharge or defeasance.

          SECTION 8.2. Conditions to Defeasance The Company may exercise its legal defeasance option or its covenant defeasance option only if:

(1)	the Company irrevocably deposits in trust with the Initial Holder or the Trustee for the benefit of the Holders money in U.S. dollars or U.S. Government Obligations or a combination thereof, the principal of and interest (without reinvestment) on which will be sufficient, or a combination thereof sufficient, for the payment of principal of, premium, if any, and interest on the Securities to maturity or redemption, as the case may be;
(2)	the Company delivers to the Initial Holder or the Trustee an Officer’s Certificate stating that the payments of principal and interest when due and without reinvestment of the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal and interest when due on all the Securities to maturity or redemption, as the case may be;
(3)	no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowings) or insofar as Events of Default specified in Section 6.1(7) are concerned, at any time in the period ending on the 91st day after such date of deposit;
(4)	such legal defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a Default under, this Indenture or any other material agreement or instrument to which the Company or any of its Significant Subsidiaries is a party or by which the Company or any of its Significant Subsidiaries is bound;
(5)	the Company shall have delivered to the Initial Holder or the Trustee an Opinion of Counsel to the effect that (A) the Securities and (B) assuming no intervening bankruptcy of the Company between the date of deposit and the 91st day following the deposit and that no Holder of the Securities is an insider of the Company, after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally;
(6)	the Company delivers to the Initial Holder or the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not

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	constitute, and does not qualify as, a regulated investment company under the Investment Company Act of 1940;
(7)	in the case of the legal defeasance option, the Company shall have delivered to the Initial Holder or the Trustee an Opinion of Counsel (subject to customary assumptions and exclusions) in the United States stating that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date of this Indenture there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and legal defeasance and will be subject to federal income tax on the same amount, in the same manner and at the same times as would have been the case if such deposit and legal defeasance had not occurred;
(8)	in the case of the covenant defeasance option, the Company shall have delivered to the Initial Holder or the Trustee an Opinion of Counsel (subject to customary assumptions and exclusions) in the United States to the effect that the Holders will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and covenant defeasance and will be subject to federal income tax on the same amount, in the same manner and at the same times as would have been the case if such deposit and covenant defeasance had not occurred; and
(9)	the Company delivers to the Initial Holder or the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent to either the legal defeasance or covenant defeasance, as the case may be, as contemplated by this Article VIII have been complied with.

          SECTION 8.3. Application of Trust Money. The Trustee shall hold in trust all money or U.S. Government Obligations (including proceeds thereof) deposited with it pursuant to this Article VIII. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture and the Securities to the Holders of the Securities of all sums due in respect of the payment of principal of, premium, if any, and accrued interest on the Securities.

          SECTION 8.4. Repayment to the Company. The Initial Holder, the Trustee and the Paying Agent shall promptly turn over to the Company upon request any excess money, U.S. Government Obligations or securities held by them upon payment of all the obligations under this Indenture.

          Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of

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principal of or premium, if any, or interest on the Securities that remains unclaimed by the Holders thereof for two years, and, thereafter, Holders entitled to the money must look to the Company for payment as unsecured general creditors.

          SECTION 8.5. Indemnity for U.S. Government Obligations. The Company shall pay and shall indemnify the Initial Holder or the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations other than any such tax, fee or other charge that is for the account of the Holder of the Securities.

          SECTION 8.6. Reinstatement. If the Initial Holder, the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company and each Subsidiary Guarantor, if any, under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Initial Holder, the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article VIII; provided, however, that, if the Company or the Subsidiary Guarantors have made any payment of principal, premium, if any, interest on or principal of any Securities because of the reinstatement of its obligations, the Company or Subsidiary Guarantors, as the case may be, shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Initial Holder, the Trustee or Paying Agent.

          The Initial Holders and the Trustee’s rights under this Article VIII shall survive termination of this Indenture.

ARTICLE IX
AMENDMENTS

          SECTION 9.1. Without Consent of Holders. The Company, the Note Guarantors and the Initial Holder or the Trustee may amend or supplement this Indenture, the Securities, the Collateral Documents, the Intercreditor Agreement, or any Note Guarantees without the consent of any Holder to:

(1)	cure any ambiguity, omission, defect or inconsistency;
(2)	provide for the assumption by a successor corporation of the obligations of the Company or any Note Guarantor under this Indenture;
(3)	add Guarantees with respect to the Securities or release a Subsidiary Guarantor upon its designation as an Unrestricted Subsidiary; provided, however, that the designation is in accordance with the applicable provisions of this Indenture;
(4)	expand the collateral securing the Securities;

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(5)	add to the covenants of the Company and the Restricted Subsidiaries for the benefit of the Holders or surrender any right or power conferred upon the Company or any Restricted Subsidiary;
(6)	make any change that does not adversely affect the rights of any Holder;
(7)	release a Note Guarantor from its obligations under its Note Guarantee or this Indenture in accordance with the applicable provisions of this Indenture;
(8)	release Liens in favor of the Collateral Agent in the Collateral as provided under Section 11.7 or otherwise in accordance with the terms of this Indenture, Collateral Documents or the Intercreditor Agreement;
(9)	provide for the appointment of a successor trustee; provided that the successor trustee is otherwise qualified and eligible to act as such under the terms of this Indenture;
(10)	conform the text of this Indenture, the Securities or the Note Guarantees to any provision of the “Description of senior secured notes” section of the Offering Memorandum to the extent that such provision in the “Description of senior secured notes” was intended to apply to the Securities and be a verbatim recitation of a provision of this Indenture, the Securities or the Note Guarantees; or
(11)	make any change to the subordination provisions of Article X or Section 11.5 or any other subordination provisions of this Indenture that would limit or terminate the benefits available to any holder of Senior Indebtedness of the Company or a holder of Guarantor Senior Indebtedness (or any Representative thereof) under such subordination provisions.

          However, no amendment may be made to the subordination provisions of Article X or Section 11.5 or any other subordination provisions of this Indenture that adversely affects the rights of any holder of Senior Indebtedness or Guarantor Senior Indebtedness then outstanding unless the holders of such Senior Indebtedness or Guarantor Senior Indebtedness (or any group or representative thereof authorized to give a consent) consent to such change.

          After an amendment or supplement under this Section, the Collateral Documents, or the Intercreditor Agreement becomes effective, the Company shall mail to Holders a notice briefly describing such amendment or supplement. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment or supplement under this Section 9.1.

          SECTION 9.2. With Consent of Holders. The Company, the Subsidiary Guarantors and the Initial Holder or the Trustee may amend or supplement this Indenture, the Securities or any Subsidiary Guarantee with the consent of the Initial Holder or, if a Trustee has

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been appointed, the Holders of at least a majority in principal amount of the Securities then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities). Any past default or compliance with any provision of this Indenture, the Securities or any Subsidiary Guarantee (other than a Default or an Event of Default in the payment of the principal of, or premium, if any, or interest on a Security (except in accordance with Section 6.4)) may be waived with the consent of the Initial Holder or, if a Trustee has been appointed, of the Holders of a majority in principal amount of the Securities then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities). However, without the consent of each Holder affected, an amendment, supplement or waiver may not (with respect to any Securities held by a non-consenting Holder of Securities):

     (1) reduce the amount of Securities whose Holders must consent to an amendment;

     (2) change the method of calculating the rate of interest or extend the stated time for payment of interest on any Security;

     (3) reduce the principal of or extend the Stated Maturity of any Security;

     (4) reduce the premium payable upon the redemption or repurchase of any Security or change the time at which any Security may be redeemed or repurchased pursuant to Article V or Section 3.11, whether through an amendment or waiver of provisions in the covenants or otherwise; provided that amendments to the definition of Change of Control shall not require the consent of each Holder affected;

     (5) make any Security payable in money other than that stated in the Security;

     (6) impair the right of any Holder to receive payment of principal, premium, if any, and interest on such Holder’s Securities on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Securities;

     (7) make any change to the amendment provisions that require each Holder’s consent or to the waiver provisions;

     (8) modify the Note Guarantees in any manner adverse to the Holders of the Securities;

     (9) modify the provisions of the Collateral Documents or the Intercreditor Agreement in any manner materially adverse to the holders of the Securities or release all or substantially all of the Collateral from the Lien under the Intercreditor Agreement other than in accordance with this Indenture, the Collateral Documents or the Intercreditor Agreement; or.

     (10) make any change to the subordination provisions of the Indenture that adversely affects the rights of any Holder of Securities.

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          In addition, without the consent of the holders of sixty-six and two-thirds percent (66 2/3%) in aggregate principal amount of the Securities outstanding, an amendment or waiver may not (with respect to any Securities held by a non-consenting holder) release Collateral other than in accordance with this Indenture, the Collateral Documents and the Intercreditor Agreement.

          It shall not be necessary for the consent of the Holders under this Section 9.2 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof. A consent to any amendment, supplement or waiver under this Indenture by any Holder of the Securities given in connection with a tender or exchange of such Holder’s Securities will not be rendered invalid by such tender or exchange.

          After an amendment or supplement under this Section becomes effective, the Company shall mail to Holders a notice briefly describing such amendment or supplement. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment or supplement under this Section 9.2.

          However, no amendment may be made to the subordination provisions of Article X or Section 11.5 or any other subordination provisions of this Indenture that adversely affects the rights of any holder of Senior Indebtedness or Guarantor Senior Indebtedness then outstanding unless the holders of such Senior Indebtedness or Guarantor Senior Indebtedness (or any group or representative thereof authorized to give a consent) consent to such change.

          SECTION 9.3. Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or the Securities shall comply with the TIA as then in effect.

          SECTION 9.4. Revocation and Effect of Consents and Waivers. A consent to an amendment, supplement or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent or waiver is not made on the Security. Any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective or otherwise in accordance with any related solicitation documents. After an amendment, supplement or waiver becomes effective, it shall bind every Holder unless it makes a change described in any of clauses (1) through (9) of Section 9.2, in which case the amendment, supplement, waiver or other action shall bind each Holder who has consented to it and every subsequent Holder that evidences the same debt as the consenting Holder’s Securities. An amendment, supplement or waiver shall become effective upon receipt by the Trustee of the requisite number of written consents under Section 9.1 or 9.2 as applicable.

          The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give

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such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall become valid or effective more than 120 days after such record date.

          SECTION 9.5. Notation on or Exchange of Securities. If an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determine, the Company in exchange for the Security shall issue and the Trustee, if appointed, shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment.

          SECTION 9.6. Trustee To Sign Amendments. The Trustee, if appointed, shall sign any amendment, supplement or waiver authorized pursuant to this Article IX if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment, supplement or waiver the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and shall be provided with, and (subject to Sections 7.1 and 7.2) shall be fully protected in relying upon an Officers’ Certificate and an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Company and any Subsidiary Guarantors, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.3).

ARTICLE X
SUBORDINATION

          SECTION 10.1. Agreement To Subordinate. The Company agrees, and each Holder by accepting a Security agrees, that the Indebtedness evidenced by, and all other obligations in respect of, the Securities is subordinated in right of payment, to the extent and in the manner provided in this Article X, to the prior payment of all Senior Indebtedness and that the subordination is for the benefit of and enforceable by the holders of Senior Indebtedness. The Securities shall in all respects rank pari passu with all other Senior Subordinated Indebtedness of the Company and only Indebtedness of the Company that is Senior Indebtedness will rank senior to the Securities in accordance with the provisions set forth herein. All provisions of this Article X shall be subject to Section 10.12.

          SECTION 10.2. Liquidation, Dissolution, Bankruptcy. Upon any payment or distribution of the assets of the Company to creditors upon a total or partial liquidation or a total or partial dissolution of the Company or in a reorganization, bankruptcy, insolvency, receivership or similar proceeding relating to the Company or its properties or an assignment for the benefit of creditors or marshalling of the Company’s assets and liabilities whether voluntary or involuntary:

          (1) holders of Senior Indebtedness shall be entitled to receive payment in full in cash or Cash Equivalents of all Senior Indebtedness (including interest accruing after, or

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which would accrue but for, the commencement of any proceeding at the rate specified in the applicable Senior Indebtedness, whether or not a claim for such interest would be allowed) before Holders shall be entitled to receive any payment or distribution, in the event of any payment or distribution of the assets or securities of the Company; and

          (2) until the Senior Indebtedness is paid in full in cash or Cash Equivalents, any payment or distribution to which Holders would be entitled but for this Article X shall be made to holders of Senior Indebtedness, as their respective interests may appear.

          SECTION 10.3. Default on Senior Indebtedness. The Company shall not pay the principal of, premium (if any) or interest on or other payment obligations in respect of the Securities or make any deposit pursuant to Section 8.1 or Section 8.2 and may not otherwise repurchase, redeem or otherwise retire any Securities (collectively, “pay the Securities”) if (i) any Senior Indebtedness is not paid when due in cash or Cash Equivalents (taking into account any applicable grace periods) or (ii) any other default on Senior Indebtedness occurs and the maturity of such Senior Indebtedness is accelerated in accordance with its terms unless, in either case, (x) the default has been cured or waived and any such acceleration has been rescinded or (y) such Senior Indebtedness has been paid in full in cash or Cash Equivalents; provided, however, that the Company may pay the Securities, without regard to the foregoing, if the Company and the Initial Holder or the Trustee receive written notice approving such payment from the Representative of the Senior Indebtedness with respect to which either of the events set forth in clause (i) or (ii) of this sentence has occurred and is continuing. During the continuance of any default (other than a default described in clause (i) or (ii) of the preceding sentence) with respect to any Designated Senior Indebtedness pursuant to which the maturity thereof may be accelerated immediately without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, the Company may not pay the Securities for a period (a “Payment Blockage Period”) commencing upon the receipt by the Initial Holder or the Trustee (with a copy to the Company) of written notice (a “Blockage Notice”) of such default from the Representative(s) of the holders of such Designated Senior Indebtedness specifying an election to effect a Payment Blockage Period and ending 179 days thereafter (or earlier if such Payment Blockage Period is terminated (i) by written notice to the the Initial Holder or Trustee and the Company from the Person or Persons who gave such Blockage Notice, (ii) because the default giving rise to such Blockage Notice is no longer continuing or (iii) because such Designated Senior Indebtedness has been repaid in full). Notwithstanding the provisions of the immediately preceding sentence, unless the holders of such Designated Senior Indebtedness or the Representative(s) of such holders shall have accelerated the maturity of such Designated Senior Indebtedness, the Company may resume payments on the Securities after the end of such Payment Blockage Period (including any missed payments). Not more than one Blockage Notice may be given in any consecutive 360-day period, irrespective of the number of defaults with respect to Designated Senior Indebtedness during such period. However, if any Blockage Notice within such 360-day period is given by or on behalf of any holders of Designated Senior Indebtedness other than the Bank Indebtedness, the Representatives of the Bank Indebtedness may give another Blockage Notice within such period. In no event, however, may the total number of days during which any Payment Blockage Period or Periods is in effect exceed 179 days in the aggregate during any 360 consecutive day period. For purposes of this Section 10.3, no default or event of default that existed or was continuing on the date of the commencement of any Payment Blockage Period with respect to

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the Designated Senior Indebtedness initiating such Payment Blockage Period shall be, or be made, the basis of the commencement of a subsequent Payment Blockage Period by the Representative of such Designated Senior Indebtedness, whether or not within a period of 360 consecutive days, unless such default or event of default shall have been cured or waived for a period of not less than 90 consecutive days.

          SECTION 10.4. Acceleration of Payment of Securities. If payment of the Securities is accelerated because of an Event of Default, the Company or the Trustee shall promptly notify the holders of the Designated Senior Indebtedness (or their Representatives) of the acceleration. If any Designated Senior Indebtedness is outstanding, the Company shall not pay the Securities until five Business Days after the holders or Representative(s) of such Designated Senior Indebtedness receives notice of such acceleration and, thereafter, may pay the Securities only if this Article X otherwise permits payments at that time.

          SECTION 10.5. When Distribution Must Be Paid Over. If a distribution is made to Holders that because of this Article X should not have been made to them, the Holders who receive the distribution shall hold it in trust for holders of Senior Indebtedness and promptly pay it over to them as their respective interests may appear.

          SECTION 10.6. Subrogation. After all Senior Indebtedness is paid in full and until the Securities are paid in full, Holders shall be subrogated to the rights of holders of Senior Indebtedness to receive distributions applicable to Senior Indebtedness. A distribution made under this Article X to holders of Senior Indebtedness which otherwise would have been made to Holders is not, as between the Company and Holders, a payment by the Company on such Senior Indebtedness.

          SECTION 10.7. Relative Rights. This Article X defines the relative rights of Holders and holders of Senior Indebtedness. Nothing in this Indenture shall:

          (1) impair, as between the Company and Holders, the obligation of the Company which is absolute and unconditional, to pay principal of and interest on the Securities in accordance with their terms; or

          (2) prevent the Initial Holder, the Trustee or any Holder from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders of Senior Indebtedness to receive distributions otherwise payable to Holders.

          SECTION 10.8. Subordination May Not Be Impaired by Company. No right of any holder of Senior Indebtedness to enforce the subordination of the Indebtedness evidenced by the Securities shall be impaired by any act or failure to act by the Company or by the failure of any of them to comply with this Indenture.

          SECTION 10.9. Rights of Trustee and Paying Agent. Notwithstanding Section 10.3, the Trustee or Paying Agent may continue to make payments on the Securities and shall not be charged with knowledge of the existence of facts that would prohibit the making of any such payments unless, not less than two Business Days prior to the date of such payment, a Trust Officer of the Trustee receives notice in writing satisfactory to it that payments may not be made under this Article X. The Company, the Registrar, the Paying Agent, a Representative or a

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holder of Senior Indebtedness may give the notice; provided, however, that, if an issue of Senior Indebtedness has a Representative, only the Representative may give the notice.

          The Trustee in its individual or any other capacity may hold Senior Indebtedness with the same rights it would have if it were not Trustee. The Registrar and the Paying Agent may do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article X with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness; and nothing in Article VII shall deprive the Trustee of any of its rights as such holder. Nothing in this Article X shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.7.

          SECTION 10.10. Distribution or Notice to Representative. Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness, the distribution may be made and the notice given to their Representative (if any).

          SECTION 10.11. Article X Not To Prevent Events of Default or Limit Right To Accelerate. The failure to make a payment in respect of the Securities, by reason of any provision in this Article X, shall not be construed as preventing the occurrence of a Default or Event of Default. Nothing in this Article X shall have any effect on the right of the Initial Holder, the Holders or the Trustee to accelerate the maturity of the Securities.

          SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of U.S. Government Obligations held in trust under Article VIII by the Trustee for the payment of principal of premium, if any, and interest on the Securities shall not be subordinated to the prior payment of any Senior Indebtedness or subject to the restrictions set forth in this Article X, and none of the Holders shall be obligated to pay over any such amount to the Company, any holder of Senior Indebtedness, or any other creditor of the Company.

          SECTION 10.13. Trustee Entitled To Rely. Upon any payment or distribution pursuant to this Article X, the Trustee and the Holders shall be entitled to rely (i) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to under Section 10.2 are pending, (ii) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (iii) upon the Representatives for the holders of Senior Indebtedness for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of Senior Indebtedness and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article X. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article X, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article X, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.1 and 7.2 shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article X.

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          SECTION 10.14. Trustee To Effectuate Subordination. Each Holder by accepting a Security authorizes and directs the Trustee on its behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination between the Holders and the holders of Senior Indebtedness as provided in this Article X and appoints the Trustee as attorney-in-fact for any and all such purposes.

          SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders or the Company or any other Person, money or assets to which any holders of Senior Indebtedness shall be entitled by virtue of this Article X or otherwise.

          SECTION 10.16. Reliance by Holders of Senior Indebtedness on Subordination Provisions. Each Holder by accepting a Security acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness, whether such Senior Indebtedness was created or acquired before or after the issuance of the Securities, to acquire, or to continue to hold, such Senior Indebtedness, and such holder of Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness.

ARTICLE XI
NOTE GUARANTEES

          SECTION 11.1. Note Guarantees. Each Note Guarantor hereby fully, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, jointly and severally with each other Note Guarantor, to the Initial Holder, each Holder of the Securities and the Trustee the full and punctual payment when due, whether at maturity, by acceleration, by redemption or otherwise, of the principal of, premium, if any, and interest on the Securities and all other monetary obligations of the Company under this Indenture (including interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Company or any Note Guarantor whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) (all the foregoing being hereinafter collectively called the “Guarantor Obligations”). Each Note Guarantor further agrees (to the extent permitted by law) that the Guarantor Obligations may be extended or renewed, in whole or in part, without notice or further assent from it, and that it will remain bound under this Article XI notwithstanding any extension or renewal of any Guarantor Obligation.

          Each Note Guarantor waives presentation to, demand of payment from and protest to the Company of any of the Guarantor Obligations and also waives notice of protest for nonpayment. Each Note Guarantor waives notice of any default under the Securities or the Guarantor Obligations.

          Each Note Guarantor further agrees that its Note Guarantee herein constitutes a Guarantee of payment when due (and not a Guarantee of collection) and waives any right to

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require that any resort be had by any Holder to any security held for payment of the Guarantor Obligations.

          Except as set forth under Section 10.2, the obligations of each Note Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than payment of the Guarantor Obligations in full), including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guarantor Obligations or otherwise. Without limiting the generality of the foregoing, the Guarantor Obligations of each Note Guarantor herein shall not be discharged or impaired or otherwise affected by (a) the failure of any Holder to assert any claim or demand or to enforce any right or remedy against the Company or any other person under this Indenture, the Securities, the other Securities Documents or any other agreement or otherwise; (b) any extension or renewal of any thereof; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Securities, the other Securities Documents or any other agreement; (d) the release of any security held by any Holder or the Trustee for the Guarantor Obligations or any of them; (e) the failure of any Holder to exercise any right or remedy against any other Note Guarantor, or (f) any change in the ownership of the Company; (g) by any default, failure or delay, willful or otherwise, in the performance of the Guarantor Obligations, or (h) by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Note Guarantor or would otherwise operate as a discharge of such Note Guarantor as a matter of law or equity.

          Subject to the provisions of Section 3.13, each Note Guarantor agrees that its Note Guarantee herein shall remain in full force and effect until payment in full of all the Guarantor Obligations or such Note Guarantor is released from its Note Guarantee upon the merger or the sale of all the Capital Stock or assets of the Note Guarantor in compliance with Section 10.2. Each Note Guarantor further agrees that its Note Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of, premium, if any, or interest on any of the Guarantor Obligations is rescinded or must otherwise be restored by any Holder upon the bankruptcy or reorganization of the Company or otherwise.

          In furtherance of the foregoing and not in limitation of any other right which any Holder has at law or in equity against any Note Guarantor by virtue hereof, upon the failure of the Company to pay any of the Guarantor Obligations when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, each Note Guarantor hereby promises to and will, upon receipt of written demand by the Initial Holder or the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders an amount equal to the sum of (i) the unpaid amount of such Guarantor Obligations then due and owing and (ii) accrued and unpaid interest on such Guarantor Obligations then due and owing (but only to the extent not prohibited by law) (including interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the Company or any Note Guarantor whether or not a claim for post-filing or post-petition interest is allowed in such proceeding).

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          Each Note Guarantor further agrees that, as between such Note Guarantor, on the one hand, and the Holders, on the other hand, (x) the maturity of the Guarantor Obligations guaranteed hereby may be accelerated as provided in this Indenture for the purposes of its Note Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guarantor Obligations guaranteed hereby and (y) in the event of any such declaration of acceleration of such Guarantor Obligations, such Guarantor Obligations (whether or not due and payable) shall forthwith become due and payable by the Note Guarantor for the purposes of this Note Guarantee.

          Each Note Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by the Initial Holder, the Trustee or the Holders in enforcing any rights under this Section.

          SECTION 11.2. Limitation on Liability; Termination, Release and Discharge. (a) Any term or provision of this Indenture to the contrary notwithstanding, the obligations of each Note Guarantor hereunder will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Note Guarantor (including any guarantees under the Senior Secured Credit Agreement) and after giving effect to any collections from or payments made by or on behalf of any other Note Guarantor in respect of the obligations of such other Note Guarantor under its Note Guarantee or pursuant to its contribution obligations under this Indenture, result in the obligations of such Note Guarantor under its Note Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law and not otherwise being void or voidable under any similar laws affecting the rights of creditors generally.

          (b) Upon the sale or disposition of a Note Guarantor (by merger, consolidation, the sale of its Capital Stock or the sale of all or substantially all of its assets (other than by lease)), and whether or not the Note Guarantor is the surviving corporation in such transaction, to a Person which is not the Company or a Restricted Subsidiary of the Company (other than a Receivables Entity), such Note Guarantor will be automatically released from all its obligations under this Indenture and its Note Guarantee and such Note Guarantee will terminate; provided, however, that (x) the sale or other disposition is in compliance with this Indenture, including Sections 3.5, 3.9 and 4.1 and (y) all the obligations of such Note Guarantor under all Credit Facilities and related documentation and any other agreements relating to any other Indebtedness of the Company or its Restricted Subsidiaries terminate upon consummation of such transaction.

          (c) Each Note Guarantor shall be deemed released from all its obligations under this Indenture and such Note Guarantee shall terminate (x) upon the legal defeasance of the Securities pursuant to the provisions of Article VIII hereof or (y) in accordance with Section 3.13 of this Indenture.

          (d) Each Note Guarantor shall be released from its obligations under this Indenture and its Note Guarantee if the Company designates such Note Guarantor as an Unrestricted Subsidiary and such designation complies with the other applicable provisions of this Indenture.

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          (e) Each Note Guarantor shall be released from its obligations under this Indenture and its Note Guarantee upon satisfaction and discharge of this Indenture pursuant to Section 8.1(a).

          (f) The Initial Holder or the Trustee shall promptly execute and deliver an appropriate instrument prepared and delivered to it at the expense of the Company evidencing any such release upon receipt of a request by the Company accompanied by an Officers’ Certificate certifying as to the compliance with this Section 11.2.

          SECTION 11.3. Right of Contribution. Each Note Guarantor hereby agrees that to the extent that any Note Guarantor shall have paid more than its proportionate share of any payment made on the obligations under the Note Guarantees, such Note Guarantor shall be entitled to seek and receive contribution from and against the Company, or any other Note Guarantor who has not paid its proportionate share of such payment. The provisions of this Section 11.3 shall in no respect limit the obligations and liabilities of each Note Guarantor to the Trustee and the Holders and each Note Guarantor shall remain liable to the Trustee and the Holders for the full amount guaranteed by such Note Guarantor hereunder.

          SECTION 11.4. No Subrogation. Notwithstanding any payment or payments made by each Note Guarantor hereunder, no Note Guarantor shall be entitled to be subrogated to any of the rights of the Initial Holder, the Trustee or any Holder against the Company or any other Note Guarantor or any collateral security or guarantee or right of offset held by the Initial Holder, the Trustee or any Holder for the payment of the Guarantor Obligations, nor shall any Note Guarantor seek or be entitled to seek any contribution or reimbursement from the Company or any other Note Guarantor in respect of payments made by such Note Guarantor hereunder, until all amounts owing to the Initial Holder, the Trustee and the Holders by the Company on account of the Guarantor Obligations are paid in full. If any amount shall be paid to any Note Guarantor on account of such subrogation rights at any time when all of the Guarantor Obligations shall not have been paid in full, such amount shall be held by such Note Guarantor in trust for the Initial Holder or the Trustee and the Holders, segregated from other funds of such Note Guarantor, and shall, forthwith upon receipt by such Note Guarantor, be turned over to the Initial Holder or the Trustee in the exact form received by such Note Guarantor (duly indorsed by such Note Guarantor to the Trustee, if required), to be applied against the Guarantor Obligations.

          SECTION 11.5. Subordination of Note Guarantees.

          The obligations of each Note Guarantor under its Note Guarantee pursuant to this Article XI shall be junior and subordinated to the prior payment in full in cash or Cash Equivalents of Guarantor Senior Indebtedness on the same basis as the Securities are junior and subordinated to Senior Indebtedness of the Company. For the purposes of the foregoing sentence, the Trustee and the Holders shall have the right to receive and/or retain payments by any of the Note Guarantors only at such times as they may receive and/or retain payments in respect of the Securities pursuant to this Indenture, including Article X hereof.

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ARTICLE XII
COLLATERAL

          SECTION 12.1. The Collateral. (a) The due and punctual payment of the principal of, premium, if any, and interest on the Securities and the Note Guarantees when and as the same shall be due and payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, interest on the overdue principal of and interest (to the extent permitted by law), if any, on the Securities and the Note Guarantees and performance of all other obligations under this Indenture, including, without limitation, the obligations of the Company set forth in Section 7.7, and the Securities and the Note Guarantees and the Collateral Documents, shall be secured by at least third-priority Liens and security interests in the Collateral, in each case subject to Permitted Liens, as provided in the Collateral Documents to which the Company and the Note Guarantors, as the case may be, have entered into simultaneously with the execution of this Indenture and will be secured by all of the Collateral pledged pursuant to the Collateral Documents hereafter delivered as required or permitted by this Indenture, the Collateral Documents and the Intercreditor Agreement. The Company and the Note Guarantors hereby agree that the Collateral Agent shall hold the Collateral in trust for the benefit of the Initial Holder or all of the Holders and the Trustee, in each case pursuant to the terms of the Collateral Documents and the Intercreditor Agreement and the Collateral Agent is hereby authorized to execute and deliver the Collateral Documents and the Intercreditor Agreement.

          (b) The Initial Holder and each Holder, by its acceptance of any Securities and the Note Guarantees, consents and agrees to the terms of the Collateral Documents and the Intercreditor Agreement (including, without limitation, the provisions providing for foreclosure) as the same may be in effect or may be amended from time to time in accordance with their terms and authorizes and directs the Collateral Agent to perform its obligations and exercise its rights under the Collateral Documents in accordance therewith.

          (c) The Initial Holder, the Trustee and each Holder, by accepting the Securities and the Note Guarantees, acknowledges that, as more fully set forth in the Collateral Documents and the Intercreditor Agreement, the Collateral as now or hereafter constituted shall be held for the benefit of the Initial Holder, all the Holders and the Trustee, and that the Lien of this Indenture and the Collateral Documents in respect of the Initial Holder or the Trustee and the Holders is subject to and qualified and limited in all respects by the Collateral Documents and the Intercreditor Agreement and actions that may be taken thereunder.

          SECTION 12.2. Maintenance of Collateral. The Company and the Note Guarantors shall maintain the Collateral in good, safe and insurable operating order, condition and repair (ordinary wear and tear excepted) and do all other acts as may be reasonably necessary or appropriate to maintain and preserve the value of the Collateral, except where the failure to maintain such value would not have a material adverse effect on the Collateral. The Company and the Note Guarantors shall pay all real estate and other taxes (except for those being contested in good faith and for which adequate reserves have been made), and maintain in full force and effect in all material permits and certain insurance coverages, except to the extent that the failure to maintain such permits and coverages follows the sale, in accordance with this

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Indenture, of the assets to which such permits or coverages relate or where such failure would not have a material adverse effect on the Collateral.

          SECTION 12.3. Further Assurances. (a) The Company and the Note Guarantors shall, at their sole expense, do all acts reasonably requested by the Collateral Agent which may be reasonably necessary to confirm that the Collateral Agent holds, for the benefit of the Initial Holder or the Holders and the Trustee and the holders of any Pari Passu Secured Indebtedness, duly created, enforceable and perfected and at least third-priority Liens and security interests in the Collateral (subject to Permitted Liens) as contemplated by this Indenture, the Collateral Documents and the Intercreditor Agreement.

          (b) As necessary, or upon reasonable request of the Collateral Agent, the Initial Holder or Trustee, the Company and the Note Guarantors shall, at their sole expense, execute, acknowledge and deliver such documents and instruments and take such other actions, which may be necessary or which the Collateral Agent, the Initial Holder or the Trustee may reasonably request to create, protect, assure, perfect, transfer and confirm the Liens, benefits, property and rights conveyed or intended to be conveyed by this Indenture or the Collateral Documents for the benefit of the Initial Holder or the Holders and the Trustee, including with respect to after-acquired Collateral. If the Company or such Note Guarantor fails to do so, the Initial Holder or the Trustee is hereby irrevocably authorized and empowered, with full power of substitution, to execute, acknowledge and deliver such Collateral Documents, the Intercreditor Agreement, instruments, certificates, notices and other documents and, subject to the provisions of the Collateral Documents and the Intercreditor Agreement, take such other actions in the name, place and stead of the Company or such Note Guarantor, but the Trustee will have no obligation to do so and no liability for any action taken or omitted by it in good faith in connection therewith.

          SECTION 12.4. After Acquired Property. Upon the acquisition by the Company or any Note Guarantor after the Closing Date of any assets located in the United States, including, but not limited to, any after-acquired fee interest in real property or any equipment or fixtures which constitute accretions, additions or technological upgrades to the equipment or fixtures that form part of the Collateral (in each case, with a value in excess of $1,000,000), to the extent any such assets secure Credit Agreement Obligations, Senior Indebtedness or any Pari Passu Secured Indebtedness, the Company or such Note Guarantor, as the case may be, shall execute and deliver such Mortgages, security instruments and financing statements, together with reasonably required certificates and opinions of counsel, as may be necessary to vest in the Collateral Agent a perfected security interest, subject only to Permitted Liens, in such after-acquired property and to have such after-acquired property added to the Collateral, and thereupon all provisions of this Indenture and the other Securities Documents relating to the Collateral shall be deemed to relate to such after-acquired property to the same extent and with the same force and effect. In addition, the Company or any Note Guarantor shall comply with the second sentence of Section 3.6.

          SECTION 12.5. Agreements Requiring Application of Proceeds of Collateral. The Company shall, and shall cause each Note Guarantor to, at its sole cost and expense, execute and deliver all such agreements and instruments as necessary or as the Collateral Agent, the Initial Holder or Trustee shall reasonably request to more fully or accurately describe the assets

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and property intended to be Collateral or the obligations intended to be secured by the Collateral Documents.

          SECTION 12.6. Real Estate Mortgages and Filings and Leasehold Interests. (a) With respect to any fee interest in certain real property interests identified in Schedule 11.5 to this Indenture (individually and collectively, the “Premises”) owned by the Company or a Note Guarantor on the Issue Date or acquired by the Company or a Note Guarantor after the Issue Date which has a value in excess of $1,000,000 that secures Credit Agreement Obligations:

(1)	the Company shall deliver to the Collateral Agent, as mortgagee or beneficiary, as applicable, fully executed counterparts of Mortgages, each dated as of the Issue Date or, if later, the date such property is pledged to secure the Credit Agreement Obligations, in accordance with the requirements of this Indenture and/or the Collateral Documents, duly executed by the Company or the applicable Note Guarantor, together with evidence of the completion (or satisfactory arrangements for the completion) of all recordings and filings of such Mortgage (and payment of any taxes or fees in connection therewith) as may be necessary to create a valid, perfected at least third-priority Lien (subject to Permitted Liens) against the properties purported to be covered thereby;
(2)	the Collateral Agent shall have received mortgagee’s title insurance policies in favor of the Collateral Agent, as mortgagee for the ratable benefit of itself, the Initial Holder, the Trustee, Holders and holders of any Pari Passu Secured Indebtedness, in the form necessary, with respect to the property purported to be covered by such Mortgage, to insure that the interests created by the Mortgage constitute valid and at least third-priority Liens on such property free and clear of all Liens, defects and encumbrances, (other than Permitted Liens), each such title insurance policy to be in an amount reasonably satisfactory to the Collateral Agent and such policies shall also include, to the extent available at a commercially reasonable premium, the endorsements equivalent to those delivered in connection with the Senior Secured Credit Agreement and shall be accompanied by evidence of the payment in full of all premiums thereon; and
(3)	the Company shall, or shall cause each Note Guarantor to, deliver to the Collateral Agent, with respect to each of the covered Premises, such filings, surveys (or any updates or affidavits that the title company may reasonably require as necessary to issue the title insurance policies), local counsel opinions, landlord agreements and fixture filings, along with such other documents, instruments, certificates and agreements, as the Collateral Agent and its counsel shall reasonably require to create, evidence or perfect a valid and at least third-priority Lien on the property subject to each such Mortgage (subject to Permitted Liens).

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          (b) With respect to any leasehold interest in certain real property identified in Schedule 11.5 to this Indenture (individually and collectively, the ‘‘Leased Premises’’) leased by the Company or a Note Guarantor on the Issue Date or leased by the Company or a Note Guarantor after the Issue Date, the Company shall, or shall cause each Note Guarantor to, deliver to the Collateral Agent, with respect to each of the covered Leased Premises, any landlord waiver, collateral access agreement or other agreement, in form and substance satisfactory to the administrative agent under the Senior Secured Credit Agreement, between such administrative agent and (i) any other person in possession of any Collateral and (ii) any landlord of the Company of any Note Guarantor where any Collateral is located.

          SECTION 12.7. Release of Liens on the Collateral. (a) The Liens on the Collateral will be released with respect to the Securities and the Note Guarantees, as applicable:

(1)	in whole, upon payment in full of the principal of, accrued and unpaid interest, including additional interest, and premium, if any, on the Securities;
(2)	in whole, upon satisfaction and discharge of this Indenture in accordance with Section 8.1(a);
(3)	in whole, upon a legal defeasance as set forth under Article VIII;
(4)	in part, as to any asset constituting Collateral (A) that is cash withdrawn from deposit accounts for any purpose permitted by this Indenture, the Collateral Documents or the Intercreditor Agreement, (B) if all other Liens on that asset securing the Credit Agreement Obligations, Senior Indebtedness and any Pari Passu Secured Indebtedness then secured by that asset (including all commitments thereunder) are released or (C) otherwise in accordance with, and as expressly provided for under, this Indenture;
(5)	with the consent of the Initial Holder or holders of sixty-six and two-thirds percent (66 2/3%) in aggregate principal amount of the Securities (or, in the case of a release of all or substantially all Collateral, each holder of the Securities affected thereby), including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, Securities; and
(6)	with respect to assets of a Note Guarantor upon release of such Note Guarantor from its Note Guarantee as set forth under Article XI above.

          (b) The Company and each Note Guarantor will furnish to the Initial Holder or the Trustee and the Collateral Agent, prior to each proposed release of Collateral pursuant to Section 11.06(a)(1) through (6) or pursuant to the Collateral Documents:

     (1) an Officers’ Certificate and an Opinion of Counsel to the effect that all conditions precedent provided for in this Indenture and the Collateral Documents to such release have been complied with;

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     (2) a form of such release (which release shall be in form reasonably satisfactory to the Initial Holder or the Trustee and shall provide that the requested release is without recourse or warranty to the Trustee);

     (3) all documents required by this Indenture, the Collateral Documents and the Intercreditor Agreement; and

     (4) an Opinion of Counsel to the effect that such release and other accompanying documents constitute all documents required by the Collateral Documents, the Intercreditor Agreement and this Indenture.

Upon compliance by the Company or the Note Guarantors, as the case may be, with the conditions precedent set forth above, and if required by this Indenture upon delivery by the Company or such Note Guarantor to the Initial Holder or the Trustee an Opinion of Counsel to the effect that such conditions have been complied with, the Initial Holder, the Trustee or the Collateral Agent shall promptly cause to be released and reconveyed to the Company, or the relevant Note Guarantor, as the case may be, the released Collateral, and the Trustee and Collateral Agent shall promptly execute and deliver to the Company or the relevant Guarantor, as the case may be, such instruments of release or reconveyance and other documents as the Company or such Guarantor may request.

          SECTION 12.8. Authorization of Actions to be Taken by the Trustee or the Collateral Agent Under the Collateral Documents (a) Subject to the provisions of the Collateral Documents and the Intercreditor Agreement, each of the Trustee or the Collateral Agent may, in its sole discretion and without the consent of the Holders, on behalf of the Holders, and the Initial Holder on its own behalf may, take all actions it deems necessary or appropriate in order to (i) enforce any of its rights or any of the rights of the Initial Holder or the Holders under the Collateral Documents and the Intercreditor Agreement and (ii) collect and receive any and all amounts payable in respect of the Collateral in respect of the obligations of the Company and the Note Guarantors hereunder and thereunder. Subject to the provisions of the Collateral Documents and the Intercreditor Agreement, the Trustee or the Collateral Agent shall have the power to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts that may be unlawful or in violation of the Collateral Documents, the Intercreditor Agreement or this Indenture, and such suits and proceedings as the Initial Holder, the Trustee or the Collateral Agent may deem expedient to preserve or protect its interest and the interests of the Holders in the Collateral (including the power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest hereunder or be prejudicial to the interests of the Initial Holder, the Holders or the Trustee).

          (b) The Trustee or the Collateral Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, except to the extent such action or omission constitutes negligence, bad faith or willful misconduct on the part of the Trustee or the

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Collateral Agent, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of the Company to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. The Trustee or the Collateral Agent shall have no responsibility for recording, filing, re-recording or refiling any financing statement, continuation statement, document, instrument or other notice in any public office at any time or times or to otherwise take any action to perfect or maintain the perfection of any security interest granted to it under the Collateral Documents or otherwise.

          (c) Where any provision of this Indenture requires that additional property or assets be added to the Collateral, the Company and each Note Guarantor shall deliver to the Initial Holder, the Trustee or the Collateral Agent the following:

     (i) a request from the Company that such Collateral be added;

     (ii) the form of instrument adding such Collateral, which, based on the type and location of the property subject thereto, shall be in substantially the form of the applicable Collateral Documents entered into on the date of this Indenture, with such changes thereto as the Company shall consider appropriate, or in such other form as the Company shall deem proper, provided that any such changes or such form are administratively satisfactory to the Trustee or the Collateral Agent;

     (iii) an Officers’ Certificate to the effect that the Collateral being added is in the form and consists of the assets required by this Indenture;

     (iv) an Officers’ Certificate and Opinion of Counsel to the effect that all conditions precedent provided for in this Indenture to the addition of such Collateral have been complied with, which Opinion of Counsel shall also opine as to the creation and perfection of the Collateral Agent’s Lien on such Collateral and as to the due authorization, execution, delivery, validity and enforceability of the Collateral Document being entered into (in each case subject to customary exceptions); and

     (v) such financing statements, if any, as the Company shall deem necessary to perfect the Collateral Agent’s security interest in such Collateral.

ARTICLE XIII
MISCELLANEOUS

          SECTION 13.1. Trust Indenture Act Controls. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, and a Trustee has been appointed, the provision required by the TIA shall control. Each Note Guarantor in addition to performing its obligations under its Note Guarantee shall perform such other obligations as may be imposed upon it with respect to this Indenture under the TIA.

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          SECTION 13.2. Notices. Any notice or communication shall be in writing and delivered in person, sent by facsimile, delivered by commercial courier service or mailed by first-class mail, postage prepaid, addressed as follows:

if to the Parent, the Company or any Subsidiary
Guarantor:

Libbey Glass Inc.
300 Madison Ave.
P.O. Box 10060
Toledo, Ohio 43699-0060
Fax: 419-325-2585
Attention: Susan Kovach, Esq.

with copies to:

Christopher Lueking, Esq.
Latham & Watkins LLP
Sears Tower
233 South Wacker Drive
Chicago, IL 60606

if to the Initial Holder:

Merrill Lynch PCG, Inc.
4 World Financial Center
18th Floor
New York, NY 10080
Attn: Lawrence First
Facsimile No.: 212-449-4296

with copies to:

Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
Attention: Robert Copen, Esq.
Facsimile No.: (212) 735-2000

          The Company, the Initial Holder or the Trustee by written notice to the other may designate additional or different addresses for subsequent notices or communications.

          Any notice or communication to the Company or the Note Guarantors shall be deemed to have been given or made as of the date so delivered if personally delivered; when receipt is acknowledged, if telecopied; and five calendar days after mailing if sent by registered or certified mail, postage prepaid (except that a notice of change of address shall not be deemed to have been given until actually received by the addressee).

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          Any notice or communication mailed to a registered Holder shall be mailed to the Holder at the Holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.

          Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee shall be effective only upon receipt.

          SECTION 13.3. Communication by Holders with other Holders. Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).

          SECTION 13.4. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee:

     (1) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

     (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with.

          SECTION 13.5. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant to Section 3.18) shall include:

     (1) a statement that the individual making such certificate or opinion has read such covenant or condition;

     (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

     (3) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

     (4) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with.

          In giving such Opinion of Counsel, counsel may rely as to factual matters on an Officers’ Certificate or on certificates of public officials.

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          SECTION 13.6. When Securities Disregarded. In determining whether the Holders of the required aggregate principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company, any Note Guarantor or any Affiliate of them shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee actually knows are so owned shall be so disregarded. Also, subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination.

          SECTION 13.7. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by, or at meetings of, Holders. The Registrar and the Paying Agent may make reasonable rules for their functions.

          SECTION 13.8. Legal Holidays. A “Legal Holiday” is a Saturday, a Sunday or other day on which commercial banking institutions are authorized or required to be closed in New York, New York. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected.

          SECTION 13.9. GOVERNING LAW. THIS INDENTURE, THE SECURITIES, THE COLLATERAL DOCUMENTS AND THE INTERCREDITOR AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE NOTE GUARANTEES. HOWEVER, THE MORTGAGES WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATES IN WHICH THE APPLICABLE PREMISES ARE LOCATED.

          SECTION 13.10. No Recourse Against Others. No director, officer, employee, incorporator or stockholder of the Parent, the Company or any of the Subsidiary Guarantors, as such, shall have any liability for any obligations of the Company or such Note Guarantor under the Securities, this Indenture, a Guarantee, the Collateral Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Securities by accepting a Security waives and releases all such liability to the extent permitted by applicable law. The waiver and release are part of the consideration for issuance of the Securities. Such waiver may not be effective to waive liabilities under the federal securities laws, and it is the view of the SEC that such a waiver is against public policy.

          SECTION 13.11. Successors. All agreements of the Company and each Note Guarantor in this Indenture and the Securities shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind its successors.

          SECTION 13.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture.

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          SECTION 13.13. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

          SECTION 13.14. Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

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          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first above written.

LIBBEY GLASS INC.
By:	/s/ Scott Sellick
	Name:	Scott Sellick
	Title:	Vice President and          Chief Financial Officer

LIBBEY INC.
By:	/s/ Scott Sellick
	Name:	Scott Sellick
	Title:	Vice President and          Chief Financial Officer

SYRACUSE CHINA COMPANY WORLD TABLEWARE INC. LGA4 CORP. LGA3 CORP. THE DRUMMOND GLASS COMPANY LGC CORP. TRAEX COMPANY LIBBEY.COM LLC LGFS INC. LGAC LLC
By:	/s/ Scott Sellick
	Name:	Scott Sellick
	Title:	Vice President and          Chief Financial Officer

CRISA INDUSTRIAL, L.L.C.
By	/s/ Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President and General Counsel

MERRILL LYNCH PCG, INC.,
By	/s/ Neven Viducis
	Name:	Neven Viducis
	Authorized Signatory

SCHEDULE 3.8

EXISTING AFFILIATE TRANSACTIONS

SCHEDULE 11.5

PREMISES AND LEASED PREMISES

EXHIBIT A

[FORM OF FACE OF CERTIFICATED NOTE]

[Applicable Restricted Securities Legend]

No.                     Principal Amount $

LIBBEY GLASS INC.

16% Senior Subordinated Pay-In-Kind Note due 2011

          Libbey Glass Inc., a Delaware corporation, promises to pay to MERRILL LYNCH PCG, INC., or its registered assigns, the principal sum of            DOLLARS, on December 1, 2011.

     Interest Payment Dates: June 1 and December 1 commencing on December 1, 2006

     Record Dates: May 15 and November 15

          Additional provisions of this Security are set forth on the other side of this Security.

A-1

LIBBEY GLASS INC.
By:
	Name:	Scott Sellick
	Title:	Vice President and
		Chief Financial Officer

A-2

[TRUSTEE’S CERTIFICATE OF

  AUTHENTICATION

THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Trustee, certifies
that this is one of
the Securities referred
to in this Indenture.

By:

Authorized Signatory

Date:]*

* if applicable

A-3

[FORM OF REVERSE SIDE OF CERTIFICATED NOTE]

LIBBEY GLASS INC.

16% Senior Subordinated Pay-In-Kind Note due 2011

1.    Interest

          Libbey Glass Inc., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount of this Security at a rate per annum of 16%, commencing June 16, 2006 until maturity. The Company shall make each interest payment in semi-annually in arrears on June 1 and December 1 of each year commencing December 1, 2006, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). Notwithstanding the foregoing, if any such Interest Payment Date (other than an Interest Payment Date at maturity) would otherwise be a day that is not a Business Day, then the interest payment will be postponed to the next succeeding Business Day (except if that Business Day falls in the next succeeding calendar month, then interest will be paid on the immediately preceding Business Day). Beginning on the date hereof and through June 1, 2009, on each Interest Payment Date the Company shall pay interest by issuing Additional Securities substantially in the form of this note in a principal amount equal to the interest owning on such date. Thereafter, the Company shall pay interest in cash. If the maturity date of the Securities is a day that is not a Business Day, all payments to be made on such day will be made on the next succeeding Business Day, with the same force and effect as if made on the maturity date, and no additional interest will be payable as a result of such delay in payment. The Company shall pay interest on overdue principal, and on overdue premium, if any (plus interest on such interest to the extent lawful), at the rate borne by the Securities to the extent lawful. Interest will be computed on the basis of a 360 day year of twelve 30-day months.

2.    Method of Payment

          By no later than 10:00 a.m. (New York City time) on the date on which any principal of, premium, if any, or interest on any Security is due and payable, if payable through issuance of Additional Securities, such Additional Securities in principal amount equal to the interest owning on such Interest Payment Date shall be delivered to the Initial Holder or, if appointed, the Trustee or the Paying Agent, and if payable in cash, the Company shall irrevocably deposit with the Initial Holder or, if appointed, the Trustee or the Paying Agent, money sufficient to pay such principal, premium, if any, and/or interest. The Company will pay interest (except Defaulted Interest) to the Persons who are registered Holders of Securities at the close of business on the May 15 or November 15 next preceding the interest payment date even if Securities are cancelled, repurchased or redeemed after the record date and on or before the interest payment date. Holders must surrender Securities to the Company or, if appointed, a Paying Agent to collect principal payments. The Company will pay principal, premium, if any, and cash interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. The Company will make all payments in respect of a

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Definitive Security (including principal, premium, if any, and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on the Securities may also be made, in the case of a Holder of at least $1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by written notice to the Trustee or the Paying Agent, if such have been appointed, or if not, to the Company to such effect designating such account no later than 15 days immediately preceding the relevant due date for payment (or such other date as the Company or the Trustee may accept in its discretion).

3.    Paying Agent and Registrar

          The Initial Holder or the Company may appoint and change any Paying Agent, Registrar or co-registrar without notice to any Holder. Any of the domestically organized Restricted Subsidiaries may act as Paying Agent, Registrar or co-registrar.

4.    Indenture

          The Company issued the Securities under an Indenture dated as of June 16, 2006 (as it may be amended or supplemented from time to time in accordance with the terms thereof, the “Indenture”), among the Company, the Note Guarantors and the Merrill Lynch PCG, Inc. (the “Initial Holder”) The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “Act”), whether or not subject to the Act. Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all terms and provisions of the Indenture, and Holders are referred to the Indenture and the Act for a statement of those terms.

          The Securities are general senior subordinated secured obligations of the Company. The aggregate principal amount of securities that may be executed, authenticated, if applicable, and delivered under the Indenture is unlimited. This Security is one of the 16% Senior Subordinated Notes due 2011 referred to in the Indenture. The Securities include (i) $102,000,000 aggregate principal amount of 16% Senior Subordinated Pay-In-Kind Notes due 2011 issued on the date hereof (the “Initial Securities”) and (ii) if and when issued, an unlimited principal amount of additional Senior Subordinated Pay-In-Kind Notes due 2011 in a non-registered offering that may be offered from time to time or issued as payment of interest on the Securities, in each case, subsequent to the Issue Date (the “Additional Securities” and together with the Initial Securities, the “Securities”). The Initial Securities and Additional Securities are treated as a single class of securities under the Indenture. The Indenture imposes certain limitations on the incurrence of indebtedness, the making of restricted payments, the sale of assets and subsidiary stock, the incurrence of certain liens, affiliate transactions, the sale of capital stock of restricted subsidiaries, the making of payments for consents, the entering into of agreements that restrict distributions from restricted subsidiaries and the consummation of mergers and consolidations. The Indenture also imposes requirements with respect to the provision of financial information and the provision of guarantees of the Securities by certain subsidiaries.

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          To guarantee the due and punctual payment of the principal, premium, if any, and interest (including post-filing or post-petition interest) on the Securities and all other amounts payable by the Company under the Indenture and the Securities when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Securities and the Indenture, the Note Guarantors have fully, unconditionally and irrevocably Guaranteed (and future guarantors, together with the Note Guarantors, will fully, unconditionally and irrevocably Guarantee), jointly and severally, to each Holder of the Securities and the Trustee the Guarantor Obligations pursuant to Article XI of the Indenture on a senior subordinated basis.

5.    Redemption

          Except as set forth below, the Securities will not be redeemable at the option of the Company prior to June 1, 2008. On and after such date, the Securities will be redeemable, at the Company’s option, in whole or in part, at any time from time to time, upon not less than 30 nor more than 60 days’ prior notice, at the following redemption prices (expressed in percentages of principal amount), plus accrued and unpaid interest, if any, to the applicable redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on June 1 of the years set forth below:

Period	Percentage
2008		112.000	%
2009		108.000	%
2010		104.000	%
2011 and thereafter		100.000	%

          In addition, at any time and from time to time prior to June 1, 2008, the Company may redeem in the aggregate up to 35% of the original principal amount of the Securities (after giving effect to any future issuance of Additional Securities) with the Net Cash Proceeds of one or more Equity Offerings at a redemption price (expressed as a percentage of principal amount) of 116% of the principal amount thereof plus a premium equal to the interest rate per annum on the Securities applicable on the date on which notice of redemption is given, plus accrued and unpaid interest, if any, to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that at least 65% of the original principal amount of the Securities (after giving effect to any future issuance of Additional Securities) must remain outstanding after each such redemption; provided further, that each such redemption occurs within 90 days of the date of closing of such Equity Offering.

          If the optional redemption date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest, if any, will be paid to the Person in whose name the Security is registered at the close of business on such record date,

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and no additional interest will be payable to Holders whose Securities will be subject to redemption by the Company.

          In the case of any partial redemption, selection of the Securities for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Securities are listed or, if the Securities are not listed, then on a pro rata basis, by lot or by such other method as the Trustee in its sole discretion shall deem to be fair and appropriate. Any such notice to the Trustee may be cancelled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect. If any Security is to be redeemed in part only, the notice of redemption relating to such Security shall state the portion of the principal amount thereof to be redeemed. A new Security in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Security. On and after the redemption date, interest will cease to accrue on Securities or portions thereof called for redemption as long as the Company has deposited with the Initial Holder or the Paying Agent, if appointed, funds in satisfaction of the applicable redemption price pursuant to the Indenture.

6.    Repurchase Provisions

          If a Change of Control occurs, unless the Company has exercised its right to redeem all of the Securities as described under paragraph 5 of the Securities, then such Change of Control shall constitute a triggering event which shall trigger the obligation of the Company to offer to repurchase from each Holder all or any part of such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) as provided in, and subject to the terms of, the Indenture.

7. Subordination

          The Securities are subordinated to Senior Indebtedness, as defined in the Indenture. To the extent provided in the Indenture, Senior Indebtedness must be paid before the Securities may be paid. The Company agrees, and each Holder by accepting a Security agrees, to the subordination provisions contained in the Indenture and, if a Trustee has been appointed, authorizes the Trustee to give them effect and appoints the Trustee as attorney-in-fact for such purpose.

8. Denominations; Transfer; Exchange

          The Securities are in registered form without coupons in denominations of principal amount of $1,000 and whole multiples of $1,000 or, if issued in payment of interest on the Securities, in the amount of such interest. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay a sum sufficient to cover any transfer tax or other governmental taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange of any Security for a period beginning 15 days before the mailing of a notice of an offer to repurchase or redeem Securities and ending

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at the close of business on the day of such mailing. The Registrar shall not be required to register the transfer of or exchange of any Security selected for redemption.

9. Persons Deemed Owners

          The registered Holder of this Security may be treated as the owner of it for all purposes.

10. Unclaimed Money

          Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal of or premium, if any, or interest on the Securities that remains unclaimed by the Holders thereof for two years, and, thereafter, Holders entitled to the money must look to the Company for payment as unsecured general creditors.

11. Defeasance

          Subject to certain exceptions and conditions set forth in the Indenture, the Company at any time may terminate some or all of its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal, premium, if any, and interest on the Securities to redemption or maturity, as the case may be.

12. Amendment, Supplement, Waiver

          Subject to certain exceptions set forth in the Indenture, (i) the Indenture, the Securities, the Collateral Documents, the Intercreditor Agreement and any Note Guarantee may be amended or supplemented by the Company, the Note Guarantors and the Initial Holder or, if a Trustee has been appointed, with the written consent of the Holders of at least a majority in principal amount of the then outstanding Securities and (ii) any default (other than with respect to nonpayment (except in accordance with Section 6.4 of the Indenture)) or noncompliance with any provision may be waived with the written consent of the Initial Holder or, if a Trustee has been appointed, the Holders of a majority in principal amount of the then outstanding Securities and except as otherwise set forth in the Indenture, in each case other than in respect of a provision that cannot be amended without the written consent of each Holder affected. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company, the Note Guarantors and the Initial Holder or the Trustee may amend or supplement the Indenture or the Securities cure any ambiguity, omission, defect or inconsistency; provide for the assumption by a successor corporation of the obligations of the Company or any Note Guarantor under the Indenture; add Guarantees with respect to the Securities or release a Subsidiary Guarantor upon its designation as an Unrestricted Subsidiary; provided, however, that the designation is in accordance with the applicable provisions of the Indenture; secure the Securities with additional Collateral; add to the covenants of the Company and the Restricted Subsidiaries for the benefit of the Holders or surrender any right or power conferred upon the Company or any Restricted Subsidiary; make any change that does not adversely affect the rights of any Holder; release a Note Guarantor from its obligations under its Note Guarantee or the Indenture in accordance with the applicable provisions of the Indenture; release Liens in favor of the

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Collateral Agent in the Collateral, as provided under Section 11.7 or otherwise in accordance with this Indenture, the Collateral Documents or the Intercreditor Agreement; provide for the appointment of a successor trustee, provided that the successor trustee is otherwise qualified and eligible to act as such under the terms of the Indenture; or conform the text of the Indenture, the Securities or the Note Guarantees to any provision of the “Description of senior secured notes” section of the Offering Memorandum to the extent that such provision in the “Description of senior secured notes” was intended to apply to the Securities and was intended to be a verbatim recitation of a provision of the Indenture, the Securities or the Note Guarantees; or make any change to the subordination provisions of Article X or Section 11.5 of the Indenture or any other subordination provisions of the Indenture that would limit or terminate the benefits available to any holder of Senior Indebtedness of the Company or a holder of Guarantor Senior Indebtedness (or any Representative thereof) under such subordination provisions.

13. Defaults and Remedies

          Under the Indenture, Events of Default include (each of which are more specifically described in the Indenture) (i) default in any payment of interest on any Security when due, continued for 30 days, whether or not such payment is prohibited by the provisions of Article X or Section 11.5 of the Indenture; (ii) default in the payment of principal of or premium, if any, on any Security when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise, whether or not such payment is prohibited by the provisions of Article X or Section 11.5 of the Indenture; (iii) failure by the Company or any Note Guarantor to comply with its obligations under Section 4.1 of the Indenture; (iv) failure by the Company or any Note Guarantor to comply for 30 days after notice with (a) any of its obligations under Article III of the Indenture (in each case, other than a failure to purchase Securities which will constitute an Event of Default under clause (ii) and a failure to comply with Section 4.1 of the Indenture, which will constitute an Event of Default under clause (iii) or (b) any of its agreements contained in the Collateral Documents or Intercreditor Agreement; (v) failure by the Company or any Note Guarantor to comply for 60 days after notice as provided below with its other agreements contained in the Indenture; (vi) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), other than Indebtedness owed to the Company or a Restricted Subsidiary, whether such Indebtedness or guarantee now exists, or is created after the Issue Date, which default (1) is caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness or (2) results in the acceleration of such Indebtedness prior to its maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates $15.0 million or more; (vii) certain events set forth in Section 6.1(7) of the Indenture of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law; (viii) failure by the Company or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted

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Subsidiaries) would constitute a Significant Subsidiary to pay final judgments aggregating in excess of $15.0 million (net of any amounts that a reputable and creditworthy insurance company has acknowledged liability for in writing), which judgments are not paid, discharged or stayed for a period of 60 days; (ix) any Subsidiary Guarantee, Collateral Document or obligation under the Intercreditor Agreement of a Significant Subsidiary or group of Restricted Subsidiaries that taken together as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries would constitute a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms of the Indenture) or is declared null and void in a judicial proceeding or any Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary Guarantors that taken together as of the latest audited consolidated financial statements of the Company and its Restricted Subsidiaries would constitute a Significant Subsidiary denies or disaffirms its obligations under the Indenture, or its Subsidiary Guarantee any Collateral Document or the Intercreditor Agreement; or (x) with respect to any Collateral having a fair market value in excess of $15.0 million, individually or in the aggregate, (A) the security interest under the Collateral Documents, at any time, ceases to be in full force and effect for any reason other than in accordance with their terms and the terms of this Indenture and other than the satisfaction in full of all obligations under this Indenture and discharge of this Indenture, (B) any security interest created thereunder or under this Indenture is declared invalid or unenforceable or (C) the Company or any Note Guarantor asserts, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable. However, a default under clauses (iv) and (v) will not constitute an Event of Default until either (i) the Initial Holder or (ii) the Trustee or the Holders of 25% in principal amount of the outstanding Securities notify the Company of the default and the Company does not cure such default within the time specified in clauses (iv) and (v) hereof after receipt of such notice.

          If an Event of Default (other than an Event of Default described in (vii) hereof) occurs and is continuing, either (i) the Initial Holder by notice to the Company, (ii) the Trustee by notice to the Company, or (iii) the Holders of at least 25% in principal amount of the outstanding Securities by notice to the Company and the Trustee, may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued and unpaid interest, if any, on all the Securities to be due and payable. If an Event of Default described in (vii) hereof occurs and is continuing, the principal of, premium, if any, and accrued and unpaid interest on all the Securities will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

          Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives indemnity or security reasonably satisfactory to it. Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment of principal, premium, if any, or interest) if it determines in good faith that withholding notice is in their interest.

14. Trustee Dealings with the Company

          Subject to certain limitations set forth in the Indenture, the Trustee, if appointed under the Indenture, in its individual or any other capacity, may become the owner or pledgee of

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Securities and may otherwise deal with and collect obligations owed to it by the Company, the Subsidiary Guarantors or their Affiliates and may otherwise deal with the Company, the Subsidiary Guarantors or their Affiliates with the same rights it would have if it were not Trustee.

15. No Recourse Against Others

          No director, officer, employee, incorporator or stockholder of the Parent, the Company or any of the Subsidiary Guarantors, as such, shall have any liability for any obligations of the Company under the Securities, the Indenture or any Guarantee or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Securities by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities. Such waiver may not be effective to waive liabilities under the federal securities laws, and it is the view of the SEC that such a waiver is against public policy.

16. Authentication

          If a Trustee has been appointed, a Security shall not be valid until an authorized signatory of the Trustee manually authenticates the Security, otherwise the signature of an Officer shall be sufficient.

17. Abbreviations

          Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with rights of survivorship and not as tenants in common), CUST (= custodian) and U/G/M/A (= Uniform Gift to Minors Act).

18. CUSIP, Common Code and ISIN Numbers

          The Company has caused CUSIP, Common Code or ISIN numbers, if applicable, to be printed on the Securities and has directed the Trustee to use CUSIP, Common Code or ISIN numbers, if applicable, in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon.

19. Governing Law

          This Security shall be governed by, and construed in accordance with, the laws of the State of New York.

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          The Company will furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture. Requests may be made to:

Libbey Inc.
300 Madison Ave.
P.O. Box 10060
Toledo, Ohio 43699-0060
Attention: Treasurer

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ASSIGNMENT FORM

          To assign this Security, fill in the form below:

          I or we assign and transfer this Security to:

(Print or type assignee’s name, address and zip code)

(Insert assignee’s social security or tax I.D. No.)

and irrevocably appoint                      agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Date:                                         Your Signature:                                        

Signature Guarantee:
	(Signature must be guaranteed)

Sign exactly as your name appears on the other side of this Security.

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to SEC Rule 17Ad-15.

     In connection with any transfer or exchange of any of the Securities evidenced by this certificate occurring prior to the date that is two years after the later of the date of original issuance of such Securities and the last date, if any, on which such Securities were owned by the Company, or any Affiliate of the Company, the undersigned confirms that such Securities are being:

CHECK ONE BOX BELOW:
1¨	acquired for the undersigned’s own account, without transfer; or
2¨	transferred to the Company; or
3¨	transferred pursuant to an effective registration statement under the Securities Act; or
4¨	transferred pursuant to another available exemption from the registration requirements of the Securities Act.

Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any person other than the registered Holder thereof; provided, however, that if box 4 is checked, the Trustee or the Company may request, prior to

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registering any such transfer of the Securities, the delivery of an opinion of counsel, certification and/or other information satisfactory to each of them to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

	Signature
Signature Guarantee:
(Signature must be guaranteed)	Signature

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to SEC Rule 17Ad-15.

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OPTION OF HOLDER TO ELECT PURCHASE

          If you elect to have this Security purchased by the Company pursuant to Section 3.5 or 3.11 of the Indenture, check either box:

¨	¨
3.5	3.11

          If you want to elect to have only part of this Security purchased by the Company pursuant to Section 3.5 or Section 3.11 of the Indenture, state the amount in principal amount: $                                                            

Date:                                         Your Signature:                                                                                                      

(Sign exactly as your name appears on the other side of the Security)

Signature Guarantee:
	(Signature must be guaranteed)

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to SEC Rule 17Ad-15.

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EXHIBIT B

FORM OF INDENTURE SUPPLEMENT TO ADD SUBSIDIARY GUARANTORS

          This Supplemental Indenture, dated as of                      ___, 20___(this “Supplemental Indenture” or “Guarantee”), among [name of future Subsidiary Guarantor] (the “Guarantor”), LIBBEY GLASS INC. (together with its successors and assigns, the “Company”), each other then-existing Guarantors under the Indenture referred to below, and Merill Lynch PCG, Inc. (the “Initial Holder”) under the Indenture referred to below.

W I T N E S S E T H:

          WHEREAS, the Company, the Subsidiary Guarantors and the Initial Holder have heretofore executed and delivered an Indenture, dated as of June 16, 2006 (as amended, supplemented, waived or otherwise modified, the “Indenture”), providing for the issuance of 16% Senior Subordinate Pay-In-Kind Notes due 2011 of the Company (the “Securities”);

          WHEREAS, Section 3.13 of the Indenture provides that under certain circumstances the Company is required to cause each Restricted Subsidiary that Guarantees any Indebtedness of the Company or of any other Restricted Subsidiary to execute and deliver to the Initial Holder or the Trustee a supplemental indenture pursuant to which such Restricted Subsidiary will unconditionally Guarantee, on a joint and several basis with the other Subsidiary Guarantors, the full and prompt payment of the principal of, premium, if any, and interest on the Securities on a senior subordinated basis; and

          WHEREAS, pursuant to Section 10.1 of the Indenture, the Initial Holder or the Trustee, the Company and the Subsidiary Guarantors are authorized to execute and deliver this Supplemental Indenture to amend or supplement the Indenture, without the consent of any Holder;

          NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guarantor, the Company, the other Subsidiary Guarantors and the Initial Holder or the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Securities as follows:

ARTICLE I

Definitions

          SECTION 1.1  Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term “Holders” in this Guarantee shall refer to the Initial Holder and the term “Holders” as defined in the Indenture and the Trustee acting on behalf or for the benefit of such Holders. The words “herein,” “hereof” and “hereby” and other words of similar import used in

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this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.

ARTICLE II

Agreement to be Bound; Guarantee

          SECTION 2.1  Agreement to be Bound. The Guarantor hereby becomes a party to the Indenture as a Subsidiary Guarantor and as such will have all of the rights and be subject to all of the obligations and agreements of a Note Guarantor under the Indenture. The Guarantor agrees to be bound by all of the provisions of the Indenture applicable to a Note Guarantor and to perform all of the obligations and agreements of a Note Guarantor under the Indenture.

          SECTION 2.2  Guarantee. The Guarantor agrees, on a joint and several basis with all the existing Note Guarantors, to fully, unconditionally and irrevocably Guarantee to each Holder of the Securities and the Trustee the Guarantor Obligations pursuant to Article XI of the Indenture on a senior subordinated basis.

ARTICLE III

Miscellaneous

          SECTION 3.1  Notices. All notices and other communications to the Guarantor shall be given as provided in the Indenture to the Guarantor, at its address set forth below, with a copy to the Company as provided in the Indenture for notices to the Company.

          SECTION 3.2  Parties. Nothing expressed or mentioned herein is intended or shall be construed to give any Person, firm or corporation, other than the Holders and the Trustee, any legal or equitable right, remedy or claim under or in respect of this Supplemental Indenture or the Indenture or any provision herein or therein contained.

          SECTION 3.3  Governing Law. This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.

          SECTION 3.4  Ratification of Indenture; Supplemental Indenture Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Securities heretofore or hereafter authenticated and delivered shall be bound hereby. [The Trustee makes no representation or warranty as to the validity or sufficiency of this Supplemental Indenture.]

          SECTION 3.5  Counterparts. The parties hereto may sign one or more copies of this Supplemental Indenture in counterparts, all of which together shall constitute one and the same agreement.

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          SECTION 3.6  Headings. The headings of the Articles and the Sections in this Guarantee are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

          SECTION 3.7  Trustee. [The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture. The recitals and statements herein are deemed to be those of the Guarantor and not of the Trustee.]

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          IN WITNESS WHEREOF, the parties hereto have caused the Indenture to be duly executed as of the date first above written.

[SECURITIES GUARANTOR],
as a Guarantor
By:
	Name:
	Title:
	[Address]
MERRILL LYNCH PCG, INC.
By:
	Name:
	Authorized Signatory
LIBBEY GLASS INC.
By:
	Name:
	Title:
[EXISTING GUARANTORS]
By:
	Name:
	Title:

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EX-4.7

EXHIBIT 4.7

EXECUTION VERSION

WARRANT

THE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR INSTRUMENT) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR PURSUANT TO AN EXEMPTION UNDER SAID ACT.

Libbey Inc.

Warrant for the Purchase of Common Stock

	Warrant to Purchase
No. 1	485,309 Shares of Common Stock

          FOR VALUE RECEIVED, Libbey Inc. (the “Company”), a Delaware corporation, hereby certifies that MERRILL LYNCH PCG, INC., or each of its registered assigns or transferees (any such Person, a “Holder”) is entitled, subject to the provisions of this Warrant, to purchase from the Company, at any time or from time to time during the Exercise Period (as hereinafter defined) an aggregate of 485,309 fully paid and nonassessable Warrant Shares (as hereinafter defined), representing three percent (3%) of the Fully Diluted Common Stock of the Company as of the date hereof, at an aggregate purchase price equal to the Exercise Price (as hereinafter defined). The aggregate number of Warrant Shares (as hereinafter defined) to be received upon the exercise of this Warrant is subject to adjustment from time to time as hereinafter set forth.

          Section 1. Definitions. Terms defined in the Unit Purchase Agreement dated as of June 16, 2006 between the Company and the Holder, unless otherwise defined herein are used herein as therein defined. The following additional terms, as used herein, have the following respective meanings:

          “Additional Shares” means Common Stock other than Warrant Shares

          “Appraiser” has the meaning set forth in Section 7(d)(iii).

          “Business Day” means any day, except a Saturday, Sunday or legal holiday on which banking institutions in The City of New York are authorized or obligated by law or executive order to close.

          “Common Stock” means the common stock of the Company, par value $0.01 per share and any shares into which such Common Stock may thereafter be converted or changed.

          “Convertible Securities” means rights to subscribe for, or any rights or options to purchase, Common Stock, or any shares or other securities convertible into or exchangeable for Common Stock.

          “Current Market Price” means for Common Stock the current market price of such Common Stock as determined in accordance with Section 7(d).

          “Excluded Stock” means Common Stock issued upon exercise of any options to purchase shares of Common Stock awarded to employees or directors of the Company pursuant to an employee stock option plan or stock incentive plan approved by the Board of Directors and the shareholders of the Company.

          “Exercise Period” means the period from and including the date hereof to and including 5:00 p.m. (New York City time) on December 1, 2011 (or if such day is not a Business Day, the next succeeding Business Day).

          “Exercise Price” means, with respect to any Warrant Share, an amount equal to $11.2480 per share for such Warrant Share.

          “Fully Diluted Common Stock” means, at any time, the then outstanding Common Stock plus (without duplication) all Common Stock issuable, whether at such time or upon the passage of time or the occurrence of future events, upon the exercise, conversion or exchange of all then-outstanding rights, warrants, options, convertible securities or exchangeable securities or indebtedness, or other rights exercisable for or convertible or exchangeable into, directly or indirectly, Common Stock, and securities convertible or exchangeable into Common Stock, whether at the time of issuance or upon the passage of time or the occurrence of some future event.

          “Volume Weighted Average Price” with respect to any share Common Stock on any Business Day shall mean the volume weighted average price on the New York Stock Exchange, from 9:30 a.m. to 4:00 p.m. (New York City time) on that Business Day as displayed by Bloomberg.

          “Warrant Shares” means the Common Stock of the Company deliverable upon exercise of this Warrant, as adjusted from time to time.

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          Section 2. Exercise of Warrant. This Warrant may be exercised in whole or in part, at any time or from time to time, during the Exercise Period, by presentation and surrender hereof to the Company at its principal office at the address set forth on the signature page hereof (or at such other address as the Company may hereafter notify the Holders in writing), with the Purchase Form annexed hereto duly executed and accompanied by proper payment of that portion of the Exercise Price represented by the number of Warrant Shares specified in such form being exercised. Such payment may be made, at the option of the Holders, either (a) by cash, certified or bank cashier’s check payable to the order of the Company or wire transfer in an amount equal to the product of (i) the Exercise Price times (ii) the number of Warrant Shares as to which this Warrant is being exercised or (b) by receiving from the Company the number of Warrant Shares equal to (i) the number of Warrant Shares as to which this Warrant is being exercised minus (ii) the number of Warrant Shares having a value, based on the Current Market Price on the trading day immediately prior to the date of such exercise, equal to the product of (x) the Exercise Price times (y) the number of Warrant Shares as to which this Warrant is being exercised. If this Warrant should be exercised in part only, the Company shall, upon surrender of this Warrant, execute and deliver a new Warrant evidencing the rights of the Holder to purchase the balance of the Warrant Shares purchasable hereunder. Upon receipt by the Company of this Warrant and such Purchase Form, together with the applicable portion of the Exercise Price, at such office, in proper form for exercise, the Holder shall be deemed to be the holder of record of the Warrant Shares, notwithstanding that the share register of the Company shall then be closed or that certificates representing such Warrant Shares shall not then be actually delivered to the Holder. The Company shall pay any and all documentary, stamp or similar issue taxes payable in respect of the issue of the Warrant Shares provided that the Company shall not be required to pay any taxes payable in respect of the issue or delivery of any Warrant Shares in a name other than that of the registered Holder of the Warrant at the time of exercise.

          Section 3. Due Authorization; Reservation of Shares. (a) The Company represents and warrants that this Warrant has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company and entitles the Holder hereof or its assignees to purchase Warrant Shares upon payment to the Company of the Exercise Price applicable to such shares. The Company hereby agrees that at all times there shall be reserved for issuance and delivery by the Company, upon exercise of this Warrant, shares of Common Stock of the Company from time to time issuable or deliverable upon exercise of this Warrant. All such shares shall be duly authorized (and, if newly-issued, when issued upon such exercise), shall be validly issued, fully paid and nonassessable, free and clear of all liens, security interests, charges and other encumbrances or restrictions on sale and free and clear of all preemptive rights.

               (b) The Company represents and warrants that the execution and delivery by it of this Warrant does not require any action by or in respect of, or filing with, any New York or Delaware governmental body, agency or official and does not contravene or constitute a default under or violation of (i) any provision of New York or Delaware law or regulation, (ii) the by-laws of the Company, (iii) any material agreement to which the Company or any of its subsidiaries is a party or (iv) any judgment,

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injunction, order, decree or other instrument binding upon the Company, except in the case of clauses (i), (iii) and (iv) any defaults or violations that individually or in the aggregate would not have a material adverse effect on the business of the Company and its subsidiaries taken as a whole.

          Section 4. Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. With respect to any fraction of a share called for upon any exercise hereof, the Company shall pay to the Holder an amount in cash equal to such fraction multiplied by the Current Market Price of one share of Common Stock.

          Section 5. Exchange, Transfer and Assignment. This Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof to the Company for other Warrants of different denominations, entitling the Holder or Holders thereof to purchase in the aggregate the same number of Warrant Shares. Subject to Section 10 hereof, the Holder of this Warrant shall be entitled to assign or transfer its interest in this Warrant (including the associated registration rights) in whole or in part to any person or persons. Upon surrender of this Warrant to the Company, with the Assignment Form annexed hereto duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new Warrant or Warrants in the name in such instrument of assignment or transfer and, if the Holder’s entire interest is not being assigned or transferred, in the name of the Holder, and this Warrant shall promptly be cancelled. In the event of any assignment in part, the Exercise Price shall be apportioned between the Warrant to be issued to the Holder with respect to that portion not assigned or transferred and the Warrant to be issued to the transferee based on their respective interests. This Warrant may be divided or combined with other Warrants that carry the same rights upon presentation hereof at the office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued and signed by the Holder hereof. The term “Warrant” as used herein includes any Warrants into which this Warrant may be divided or for which it may be exchanged.

          Section 6. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder of the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant.

          Section 7. Anti-dilution Provisions and Other Adjustments; Purchase Right. The Exercise Price and the number of Warrant Shares which may be purchased upon the exercise hereof shall be subject to change or adjustment as follows:

               (a) Stock Dividends, Splits, Combinations, Subdivision, Consolidation Reclassifications, etc. If the Company at any time (i) shall declare a dividend or make a distribution on its Common Stock payable in shares in its share capital (whether shares of Common Stock or of shares of any other class), (ii) shall subdivide shares of its Common Stock into a greater number of shares, (iii) shall combine or have combined or effect a consolidation of its outstanding Common Stock into a smaller number of shares or (iv) shall issue by reclassification of its Common Stock

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(including any such reclassification in connection with a consolidation or merger in which the Company is the continuing company), other securities of the Company, the Holder shall be entitled to purchase the aggregate number and kind of shares of capital stock of the Company which, if the Warrant had been exercised immediately prior to such event, such Holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, distribution, subdivision, combination, consolidation or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur.

               (b) Additional Issuances. If the Company at any time shall issue any shares of Common Stock (other than an issuance of Common Stock as a dividend or in a split or subdivision in respect of which the adjustment provided for in Section 7(a) hereof applies), Convertible Securities, or options to purchase or rights to subscribe for such Convertible Securities, other than Excluded Stock, without consideration or for consideration per share (or, in the case of Convertible Securities, with a conversion price) less than the lower of (i) the Exercise Price in effect immediately prior to the issuance of such Common Stock, Convertible Securities or options and / or (ii) the Current Market Price of the Common Stock immediately prior to the issuance of such Common Stock Convertible Securities or options, then the Exercise Price shall be lowered to a price equal to the lower of:

          (x) the consideration per share for which such Common Stock was or other securities were issued and

          (y) the price obtained by multiplying (a) the Exercise Price in effect immediately prior to the issuance of such Common Stock, Convertible Securities or options by (b) a fraction of which the denominator shall be the number of shares of Fully-Diluted Common Stock outstanding immediately after such issuance and the numerator shall be the sum of (i) the number of shares of Fully-Diluted Common Stock outstanding immediately prior to the date of such issuance and (ii) the number of Additional Shares of Common Stock which the aggregate consideration for the number of shares of Common Stock so offered would purchase at the Current Market Price per share of Common Stock.

          In the case of the issuance of Common Stock for cash in a public offering or private placement, the consideration shall be deemed to be the amount of cash paid therefor before deducting therefrom any discounts, commissions or placement fees payable by the Company to any underwriter or placement agent in connection with the issuance and sale thereof. In the case of the issuance of Common Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the Current Market Price. In the case of the issuance of options to purchase or rights to subscribe for Common Stock (except for options to acquire Excluded Stock) or Convertible Securities (i) the aggregate maximum number of shares of Common Stock deliverable upon exercise of such options to purchase or rights to subscribe for Common Stock shall be deemed to have been issued at the time such options or rights were issued and for a consideration equal to the consideration (determined as above), if any, received by the Company upon the issuance of such options or rights plus the minimum purchase price provided in such options or rights for

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the Common Stock covered thereby, (ii) the aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange of any Convertible Securities or upon the exercise of options to purchase or rights to subscribe for such Convertible Securities and subsequent conversion or exchange thereof shall be deemed to have been issued at the time such securities, options, or rights were issued and for a consideration equal to the consideration received by the Company for any such securities and related options or rights (excluding any cash received on account of accrued interest or accrued dividends), plus the additional consideration, if any, to be received by the Company upon the conversion or exchange of such securities or the exercise of any related options or rights (the consideration in each case to be determined as above), (iii) on any change in the number of shares or exercise price of Common Stock deliverable upon exercise of any such options or rights or conversions of or exchanges for such securities, other than a change resulting from the antidilution provisions thereof, the applicable Exercise Price shall be readjusted to such Exercise Price as would have been obtained had the adjustment made upon the issuance of such options, rights or securities not converted prior to such change or options or rights related to such securities not converted prior to such change been made upon the basis of such change; and (iv) no further adjustment of the Exercise Price adjusted upon the issuance of any such options, rights, or Convertible Securities shall be made as a result of the actual issuance of Common Stock on the exercise of any such rights or options or any conversion or exchange of any such Convertible Securities.

               (c) Distribution of Evidences of Indebtedness or Assets. If the Company at any time shall fix a record date for the making of a distribution or dividend to all holders of its Common Stock (including any such distribution to be made in connection with a consolidation or merger in which the Company is to be the continuing company) of evidences of its indebtedness or assets (excluding dividends paid in or distributions of Company share capital for which the number of Warrant Shares purchasable hereunder shall have been adjusted pursuant to subsection (a) of this Section 7 or regular cash dividends or distributions payable out of earnings or surplus and made in the ordinary course of business) the number of Warrant Shares purchasable hereunder after such record date shall be determined by multiplying the number of Warrant Shares purchasable hereunder immediately prior to such record date by a fraction, of which the denominator shall be the Current Market Price per share of Common Stock on such record date, less the fair market value (as determined in the good faith, reasonable judgment of the Board of Directors of the Company of the portion of the assets or evidences of indebtedness to be distributed in respect of one share of Common Stock, and the numerator shall be such Current Market Price per share of Common Stock. Such adjustment shall become effective immediately after such record date. Such adjustment shall be made whenever such a record date is fixed; and in the event that such distribution is not so made, the number of Warrant Shares purchasable hereunder shall again be adjusted to be the number that was in effect immediately prior to such record date.

               (d) Determination of Market Price. For the purpose of any computation under Section 4 or subsection (b) or (c) of this Section 7, the Current Market Price per share of Common Stock on any record date shall be the average of the current

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market value, determined as set forth below, of Common Stock for the 20 consecutive Business Days prior to the date in question.

          (i) If the Common Stock is listed on a U.S. national securities exchange or admitted to unlisted trading privileges on such an exchange, the current market value shall be the Volume Weighted Average Price of Common Stock (appropriately adjusted to take into account the occurrence during such period of stock splits and similar events); or

          (ii) If the Common Stock is not so listed or admitted to unlisted trading privileges, the current market value shall be the mean of the last bid and asked prices reported on such Business Day (A) by the National Association of Securities Dealers, Inc. Automatic Quotation System or (B) if reports are unavailable under clause (A) above by the National Quotation Bureau Incorporated; or

          (iii) If the Common Stock is not so listed or admitted to unlisted trading privileges and bid and asked prices are not so reported, the current market value shall be such value as agreed upon by the Company and the Holder or, if the Company and the Holder cannot otherwise agree, the current market value shall be determined by an independent nationally recognized investment banking firm experienced in valuing businesses (an “Appraiser”) jointly chosen by the Holder and the Company or, if the Holder and the Company cannot agree on the selection of an Appraiser within 10 Business Days, then each of the Company and the Holder shall choose an Appraiser within 10 Business Days of the end of such first 10-day period, and the current market value shall be the value agreed upon by such Appraisers or, if the two Appraisers cannot so agree, the value of a third Appraiser, which third Appraiser shall be chosen by the two Appraisers. All expenses of the Appraiser(s) shall be paid by the Company.

               (e) Shares Other Than Common Stock. In the event that at any time, as a result of an adjustment made pursuant to subsection (a) of this Section 7, the Holder shall become entitled to receive any shares in the share capital of the Company other than Common Stock, thereafter the number of such other shares so receivable upon exercise of this Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in this Section 7, and the provisions of this Warrant with respect to the Common Stock shall apply on like terms to any such other shares.

               (f) Notice of Certain Actions. In the event that at any time:

 (A) the Company shall authorize the distribution to all holders of its Common Stock of evidences of its indebtedness or assets (other than dividends paid in or distributions of the Company, share capital for which

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the number of Warrant Shares purchasable hereunder shall have been adjusted pursuant to subsection (a) of this Section 7 or regular cash dividends or distributions payable out of earnings or surplus and made in the ordinary course of business); or

     (B) the Company shall authorize any capital reorganization or reclassification of the Common Stock (other than a subdivision, consolidation or combination of the outstanding Common Stock and other than a change in par value of the Common Stock) or of any consolidation, amalgamation or merger to which the Company is a party, or of the conveyance or transfer of the properties and assets of the Company substantially as an entirety; or

     (C) there shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Company; or

     (D) the Company shall propose to take any other action that would require an adjustment of the number of Warrant Shares purchasable hereunder pursuant to this Section 7;

then the Company shall or shall cause to be mailed by certified mail to the Holder, at least 15 days prior to the applicable record or effective date hereinafter specified, a notice describing such issuance, distribution, reorganization, reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation, winding-up or other action and stating (x) the date as of which it is expected that the holders of Common Stock of record entitled to receive any such issuances or distributions are to be determined or (y) the date on which any such consolidation, amalgamation, merger, conveyance, transfer, dissolution, liquidation or winding-up is expected to become effective and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange or convert their shares of Common Stock for securities or other property, if any, deliverable upon such reorganization, reclassification, consolidation, merger, amalgamation, conveyance, transfer, dissolution, liquidation or winding-up.

               (g) Deferral in Certain Circumstances. In any case in which the provisions of this Section 7 shall require that an adjustment shall become effective immediately after a record date of an event, the Company may defer until the occurrence of such event (i) issuing to the holder of any Warrant exercised after such record date and before the occurrence of such event the Warrant Shares and other shares of capital stock issuable upon such exercise by reason of the adjustment required by such event and issuing to such holder only the shares of capital stock issuable upon such exercise before giving effect to such adjustments, and (b) paying to such holder any amount of cash in lieu of fractional shares of capital stock pursuant to Section 4 above; provided, however, that the Company shall deliver to such holder an appropriate instrument or due bills evidencing such holder’s right to receive such Additional Shares and such cash.

               (h) Other Anti-Dilution Provisions. If the Company has issued or issues any securities containing provisions protecting the holder or holders thereof

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against dilution in any manner more favorable to such holder or holders thereof than those set forth in this Section 7, such provisions (or any more favorable portion thereof) shall be deemed to be incorporated herein as if fully set forth in this Warrant and, to the extent inconsistent with any provision of this Warrant, shall be deemed to be substituted therefor.

               (i) Common Stock Defined. Whenever reference is made in this Section 7 to the issue of shares of Common Stock, the term “Common Stock” shall include any equity securities of any class of the Company hereinafter authorized which shall not be limited to a fixed or determinable amount in respect of the right of the holders thereof to participate in dividends or distributions of assets upon the voluntary or involuntary liquidation, dissolution or winding up of the Company. However, subject to the provisions of Section 9 hereof, shares issuable upon exercise hereof shall include only Warrant Shares as of the date hereof or shares of any class or classes resulting from any reclassification or reclassifications thereof or as a result of any corporate reorganization as provided for in Section 9 hereof.

          Section 8. Officers’ Certificate. Whenever the number of Warrant Shares purchasable hereunder shall be adjusted as required by the provisions of Section 7, the Company shall forthwith file in the custody of its Secretary or an Assistant Secretary at its principal office an officers’ certificate showing the adjusted number of Warrant Shares purchasable hereunder determined as herein provided, setting forth in reasonable detail the facts requiring such adjustment and the manner of computing such adjustment. Each such officers’ certificate shall be signed by the chairman, president or chief financial officer of the Company and by the secretary or any assistant secretary of the Company. Each such officers’ certificate shall be made available at all reasonable times for inspection by the Holder or any holder of a Warrant executed and delivered pursuant to Section 4 hereof and the Company shall, forthwith after each such adjustment, mail a copy, by certified mail, of such certificate to the Holder or any such holder.

          Section 9. Reclassification, Reorganization, Consolidation or Merger. In case of any Reorganization Transaction (as hereinafter defined), this Warrant shall become immediately exercisable for the kind and amount of shares and other securities and property receivable upon such Reorganization Transaction which the Holder of this Warrant would have owned immediately after the Reorganization Transaction if such Holder had exercised this Warrant immediately prior to such Reorganization Transaction. The foregoing provisions of this Section 9 shall similarly apply to successive Reorganization Transactions. For purposes of this Section 9, “Reorganization Transaction” shall mean (excluding any transaction covered by Section 7) any reclassification, capital reorganization or other change of outstanding Common Stock of the Company (other than a subdivision or combination of the outstanding Common Stock and other than a change in the par value of the Common Stock) or any consolidation, amalgamation or merger of the Company with or into another corporation (other than a merger with a subsidiary in which merger the Company is the continuing company and that does not result in any reclassification, capital reorganization or other change of outstanding shares of Common Stock of the class issuable upon exercise of this Warrant)

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or any sale, lease, transfer or conveyance to another corporation of all or substantially all of the assets of the Company.

          Section 10. Transfer Restrictions. The Holder by its acceptance hereof, represents and warrants that it is acquiring the Warrants and any Warrant Shares for its own account and not with a present intent to sell or distribute the Warrants or any Warrant Shares. Neither this Warrant nor any of the Warrant Shares, nor any interest in either, may be sold, assigned, pledged, hypothecated, encumbered or in any other manner transferred or disposed of, in whole or in part, except in compliance with applicable United States federal and state securities laws.

          Section 11. Listing on Securities Exchanges. The Company shall use all reasonable efforts to list on each national securities exchange or other trading venue on which any Common Stock may at any time be listed or traded, subject to official notice of issuance upon the exercise of this Warrant, and shall use its best efforts to maintain such listing, so long as any other shares of its Common Stock shall be so listed or traded, all shares of Common Stock from time to time issuable upon the exercise of this Warrant; and the Company shall use its best efforts to so list on each national securities exchange or other trading venue, and shall use best efforts to maintain such listing of, any other shares of capital stock of the Company issuable upon the exercise of this Warrant if and so long as any shares of capital stock of the same class shall be listed on such national securities exchange or other trading venue by the Company. Any such listing shall be at the Company’s expense.

               (a) Exclusive Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may only be brought in any federal or state court located in the County and State of New York, and each of the parties hereby consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party at its principal office shall be deemed effective service of process on such party.

          Section 12. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

          Section 13. Loss or Mutilation. Upon receipt by the Company from any Holder of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of this Warrant and an indemnity reasonably satisfactory to it (it

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being understood that the written indemnification agreement of or affidavit of loss of Merrill Lynch PCG, Inc. or any of its affiliates shall be a sufficient indemnity) and, in case of mutilation, upon surrender and cancellation hereof, the Company will execute and deliver in lieu hereof a new Warrant of like tenor to such Holder; provided, however, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.

          Section 14. Designated Office. As long as any of the Warrants remain outstanding, the Company shall maintain an office or agency, which shall initially be the principal executive offices of the Company at 300 Madison Avenue, Toledo, Ohio 43604 (the “Designated Office”), where the Warrants may be presented for exercise, registration of transfer, division or combination as provided in this Warrant. The Company may from time to time change the Designated Office to another office of the Company or its agent within the United States by notice given to all registered Holders at least 10 Business Days prior to the effective date of such change.

          Section 15. Availability of Information. (a) The Company shall comply with the reporting requirements of Sections 13 and 15(d) of the Exchange Act to the extent it is required to do so under the Exchange Act. The Company shall also cooperate with each Holder of any Warrants and holder of any Warrant Shares in supplying such information as may be reasonably necessary for such holder to complete and file any information reporting forms currently or hereafter required by the Securities and Exchange Commission as a condition to the availability of an exemption from the Securities Act for the sale of any Warrants or Warrant Shares. The provisions of this Section 15 shall survive termination of this Warrant, whether upon exercise of this Warrant in full or otherwise.

               (b) If at any time the Company is not subject to the requirements of Section 13 or 15(d) of the Exchange Act, Company will promptly furnish at its expense, upon request, for the benefit of Holders from time to time of Warrants and holders from time to time of Warrant Shares, to Holders of Warrants, holders of Warrant Shares and prospective purchasers of Warrants and Warrant Shares information satisfying the requirements of subsection (d)(4)(i) of Rule 144A under the Securities Act.

          Section 16. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the permitted successors and assigns of the Holder hereof. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and to the extent applicable, any Holder of shares of Warrant Stock issued upon the exercise hereof (including transferees), and shall be enforceable by any such Holder. The term “Holder” as used in this Warrant shall, where appropriate to assign such rights to such permitted successors and assigns, be deemed to refer to the transferee holder of such Warrant.

          Section 17. Amendment. This Warrant and all other Warrants may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder, provided that no such Warrant may be modified or amended to

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reduce the number of shares of Common Stock for which such Warrant is exercisable or to increase the price at which such shares may be purchased upon exercise of such Warrant (before giving effect to any adjustment as provided therein) without the written consent of each Holder affected thereby.

          Section 18. Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Warrant.

          Section 19. Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

          Section 20. Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

          Section 21. Governing Law. This Warrant and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the laws of the State of New York without regard to principles of conflicts of laws.

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          IN WITNESS WHEREOF, the Company has duly caused this Warrant to be executed by and attested by their duly authorized officers and to be dated as of June 16, 2006.

Libbey Inc.
By	/s/ Susan A. Kovach
Name: Susan A. Kovach
Title: Vice President and General Counsel
Address: 300 Madison Avenue                   Toledo, Ohio 43604
Attention: Susan Kovach, General Counsel
Facsimile No.: 419-325-2585

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PURCHASE FORM

Dated ____________, ____

     The undersigned hereby irrevocably elects to exercise the within Warrant to the extent of purchasing                      shares of Common Stock and hereby makes payment of                      in payment of the exercise price thereof.

INSTRUCTIONS FOR REGISTRATION OF STOCK

Name
	(please typewrite or print in block letters)
Address
	Signature

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ASSIGNMENT FORM

          FOR VALUE RECEIVED,                                          hereby sells, assigns and transfers unto

Name
	(please typewrite or print in block letters)
Address

its right to purchase                      shares of Common Stock represented by this Warrant and does hereby irrevocably constitute and appoint                      Attorney, to transfer the same on the books of the Company, with full power of substitution in the premises.

Date________________, _____

Signature                                        

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EX-4.8

EXHIBIT 4.8

EXECUTION VERSION

REGISTRATION RIGHTS AGREEMENT

by and between

MERRILL LYNCH PCG, INC.

and

LIBBEY INC.

Dated as of June 16, 2006

Table of Contents

1. Certain Definitions	1
2. Shelf Registration Statements	3
3. Piggyback Registrations	3
4. Other Registrations	5
5. Holdback Agreements	5
6. Procedures	5
7. Registration Expenses	10
8. Indemnification	10
9. Rule 144	12
10. Transfer of Registration Rights	12
11. Conversion or Exchange of Other Securities	13
12. Miscellaneous	13

     REGISTRATION RIGHTS AGREEMENT dated as of June 16, 2006, by and between LIBBEY INC., a Delaware corporation (the “Company”), and MERRILL LYNCH PCG, INC., a Delaware corporation (the “Stockholder”).

     In consideration of the mutual covenants and agreements herein contained and other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:

     1. Certain Definitions.

     In addition to the terms defined elsewhere in this Agreement, the following terms shall have the following meanings:

     “Affiliate” of any Person means any other Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlling,” “controlled by” and “under common control with”) as used with respect to any Person means 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” means this Registration Rights Agreement, including all amendments, modifications and supplements and any exhibits or schedules to any of the foregoing, and shall refer to this Registration Rights Agreement as the same may be in effect at the time such reference becomes operative.

     “Blackout Period” has the meaning set forth in Section 6(e) hereof.

     “Business Day” means any day, except a Saturday, Sunday or legal holiday on which banking institutions in The City of New York are authorized or obligated by law or executive order to close.

     “Closing Date” has the meaning set forth in the Unit Purchase Agreement.

     “Common Stock” means common stock, par value $0.10 per share, of the Company.

     “Company” has the meaning set forth in the introductory paragraph and includes any other person referred to in the second sentence of Section 14(c) hereof.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Governmental Entity” means any national, federal, state, municipal, local, territorial, foreign or other government or any department, commission, board, bureau, agency, regulatory authority or instrumentality thereof, or any court, judicial, administrative or arbitral body or public or private tribunal.

     “NYSE” means the New York Stock Exchange, Inc.

     “Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, Governmental Entity or any other entity.

     “Piggyback Registration” has the meaning set forth in Section 3(a) hereof.

     “Piggyback Registration Statement” has the meaning set forth in Section 3(a) hereof.

     “Prospectus” means the prospectus or prospectuses forming a part of, or deemed to form a part of, or included in, or deemed included in, any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Common Stock covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus or prospectuses.

     “Registrable Common Stock” means (i) all shares of Common Stock issued or issuable upon exercise of the Warrant, (ii) any shares of Common Stock issued pursuant to the Warrant, upon any split, distribution, recapitalization, substitution or similar event, and (iii) any other security into or for which the Common Stock referred to in clause (i) or (ii) has been converted, substituted or exchanged, and any security issued or issuable with respect thereto upon any stock dividend or stock split or in connection with a combination of shares, reclassification, recapitalization, merger, consolidation or other reorganization or otherwise.

     “Registration Expenses” has the meaning set forth in Section 7(a) hereof.

     “Registration Statement” means any registration statement of the Company that covers any of the Registrable Common Stock pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all materials incorporated by reference in such Registration Statement.

     “Rule 144” means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC as a replacement thereto having substantially the same effect as such rule.

     “Rule 415” means Rule 415 promulgated by the SEC pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC as a replacement thereto having substantially the same effect as such rule.

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     “SEC” means the Securities and Exchange Commission.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Shelf Registration Statement” has the meaning set forth in Section 2(a) hereof.

     “Stockholder” has the meaning set forth in the introductory paragraph.

     “Suspension Notice” has the meaning set forth in Section 6(e) hereof.

     “underwritten registration or underwritten offering” means an offering in which securities of the Company are sold to one or more underwriters (as defined in Section 2(a)(11) of the Securities Act) for resale to the public.

     “Unit Purchase Agreement” means the Unit Purchase Agreement, dated June 9, 2006, between the Company and the Stockholder.

     “Warrant” has the meaning set forth in the Unit Purchase Agreement.

     2. Shelf Registration Statements.

     (a) Right to Request Registration. At any time beginning one year after the date hereof, at the request of the Stockholder, the Company shall use its best efforts to promptly file a registration statement on Form S-3 or such other form under the Securities Act then available to the Company providing for the resale pursuant to Rule 415 from time to time by the Stockholder of such number of shares of Registrable Common Stock requested by the Stockholder to be registered thereby (including the Prospectus, amendments and supplements to the shelf registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference, if any, in such shelf registration statement, the “Shelf Registration Statement”). The Company shall use its best efforts to cause the Shelf Registration Statement to be declared effective by the SEC as promptly as practicable following such filing. The Company shall maintain the effectiveness of the Shelf Registration Statement for the earlier of (a) a period of at least 18 months in the aggregate plus the duration of any Blackout Period or (b) the first date as of which all the shares of Registrable Common Stock included in the Shelf Registration Statement have been sold.

     3. Piggyback Registrations.

     (a) Right to Piggyback. Whenever the Company proposes to publicly sell or register for sale any of its common equity securities pursuant to a registration statement (a “Piggyback Registration Statement”) under the Securities Act (other than a registration statement on Form S-8 or on Form S-4 or any similar successor forms thereto), whether for its own account or for the account of one or more securityholders of the Company (a “Piggyback Registration”), the Company shall give prompt written notice to the Stockholder

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of its intention to effect such sale or registration and, subject to Sections 3(b) and 3(c), shall include in such transaction all Registrable Common Stock with respect to which the Company has received a written request from the Stockholder for inclusion therein within 15 days after the receipt of the Company’s notice. The Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration at any time in its sole discretion, without prejudice to the Stockholder’s right to immediately request a Shelf Registration Statement hereunder. A Piggyback Registration shall not be considered a Shelf Registration Statement for purposes of Section 2 of this Agreement.

     (b) Priority on Primary Registrations. If a Piggyback Registration is initiated as an underwritten primary registration on behalf of the Company where the primary use of proceeds does not include the repurchase, redemption, acquisition or retirement of capital stock of the Company (a “Stock Repurchase”), and the managing underwriter advises the Company in writing that in its opinion the number of securities requested to be included in such registration exceeds the number that can be sold in such offering without having an adverse effect on such offering, including the price at which such securities can be sold, then the Company shall include in such registration the maximum number of shares that such underwriter advises can be so sold without having such effect, allocated (i) first, to the securities the Company proposes to sell, (ii) second, to the Registrable Common Stock requested to be included therein by the Stockholder, and (iii) third, among other securities requested to be included in such registration by other security holders of the Company on such basis as such holders may agree among themselves and the Company.

     (c) Priority on Secondary Registrations. If a Piggyback Registration is initiated as an underwritten registration on behalf of a holder of the Company’s securities other than Registrable Common Stock or on behalf of the Company where the use of proceeds includes a Stock Repurchase, and the managing underwriter advises the Company in writing that in its opinion the number of securities requested to be included in such registration exceeds the number that can be sold in such offering without having an adverse effect on such offering, including the price at which such securities can be sold, then the Company shall include in such registration the maximum number of shares that such underwriter advises can be so sold without having such effect, allocated (i) first, to the Registrable Common Stock requested to be included in such registration, pro rata among the holders of such securities on the basis of the number of shares requested to be registered by such holders and (ii) second, to other securities requested to be included in such registration by other security holders, the Company and the Stockholder, pro rata among such holder(s), the Company and the Stockholder on the basis of the number of shares requested to be registered by them.

     4. Other Registrations

     The Company shall not grant to any Person the right, other than as set forth herein and except to employees of the Company with respect to registrations on Form S-8 (or any successor forms thereto), to request the Company to register any securities of the

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Company except such rights as are not more favorable than or inconsistent with the rights granted to the Stockholder and that do not adversely affect the priorities set forth herein of the Stockholder.

     5. Holdback Agreements.

     Each holder of Registrable Common Stock whose Registrable Common Stock is include in a Piggyback Registration Statement pursuant to Section 3 hereof and the Company agree not to, and the Company shall exercise its best efforts to obtain agreements (in the underwriters’ customary form) from its directors, executive officers and beneficial owners of 5% or more of the Company’s outstanding voting stock not to, directly or indirectly offer, sell, pledge, contract to sell, (including any short sale), grant any option to purchase or otherwise dispose of any equity securities of the Company or enter into any hedging transaction relating to any equity securities of the Company during the shorter of 180 days or such period of time advised by the underwriters, provided that such period may not be less than 30 days, beginning on the effective date of any underwritten Piggyback Registration Statement or the pricing date of any underwritten offering pursuant to any Registration Statement (except as part of such underwritten offering or pursuant to registrations on Form S-8 or S-4 or any successor forms thereto) or during the 30 day period prior to the closing of any underwritten offering pursuant to any Registration Statement.

     6. Procedures.

     (a) In connection with the registration and sale of Registrable Common Stock pursuant to this Agreement, the Company shall use its best efforts to effect the registration and the sale of such Registrable Common Stock in accordance with the Stockholder’s intended methods of disposition thereof, and pursuant thereto the Company shall as expeditiously as possible:

     (i) prepare and file with the SEC a Registration Statement with respect to such Registrable Common Stock and use its best efforts to cause such Registration Statement to become effective as soon as practicable thereafter; and before filing a Registration Statement or Prospectus or any amendments or supplements thereto (including any prospectus supplement for a shelf takedown), furnish to the Stockholder and the underwriter or underwriters, if any, copies of all such documents proposed to be filed, including documents incorporated by reference in the Prospectus and, if requested by the Stockholder, the exhibits incorporated by reference, and the Stockholder (and the underwriter(s), if any) shall have the opportunity to review and comment thereon, and the Company will make such changes and additions thereto as reasonably requested by the Stockholder (and the underwriter(s), if any) prior to filing any Registration Statement or amendment thereto or any Prospectus or any supplement thereto;

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     (ii) prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for an aggregate of 18 months, in the case of a Shelf Registration Statement (plus, the duration of any Blackout Period), or such shorter period as is necessary to complete the distribution of the securities covered by such Registration Statement and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the Stockholder thereof set forth in such Registration Statement and, in the case of the Shelf Registration Statement, prepare such prospectus supplements containing such disclosures as may be reasonably requested by the Stockholder or any underwriter(s) in connection with each shelf takedown;

     (iii) furnish to the Stockholder such number of copies of such Registration Statement, each amendment and supplement thereto, each Prospectus (including each preliminary Prospectus and Prospectus supplement) and such other documents as the Stockholder and any underwriter(s) may reasonably request in order to facilitate the disposition of the Registrable Common Stock, provided, however, that the Company shall have no such obligation to furnish copies of a final prospectus if the conditions of Rule 172(c) under the Securities Act are satisfied by the Company;

     (iv) use its best efforts to register or qualify such Registrable Common Stock under such other securities or blue sky laws of such jurisdictions (domestic or foreign) as the Stockholder and any underwriter(s) reasonably requests and do any and all other acts and things that may be reasonably necessary or advisable to enable the Stockholder and any underwriter(s) to consummate the disposition in such jurisdictions of the Registrable Common Stock (provided, that the Company will not be required to (1) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph (iv), (2) subject itself to taxation in any such jurisdiction or (3) consent to general service of process in any such jurisdiction);

     (v) notify the Stockholder and any underwriter(s), at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of any event as a result of which any Prospectus contains an untrue statement of a material fact or omits any material fact necessary to make the statements therein not misleading, and, at the request of the Stockholder or any underwriter(s), the Company shall prepare a supplement or amendment to such Prospectus so that, as thereafter supplemented and/or amended, such Prospectus shall not contain an

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untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading;

     (vi) in the case of an underwritten offering, (i) enter into such agreements (including underwriting agreements in customary form), (ii) take all such other actions as the Stockholder or the underwriter(s) reasonably request in order to expedite or facilitate the disposition of such Registrable Common Stock (including, without limitation, causing senior management and other Company personnel to cooperate with the Stockholder and the underwriter(s) in connection with performing due diligence) and (iii) cause its counsel to issue opinions of counsel in form, substance and scope as are customary in primary underwritten offerings, addressed and delivered to the underwriter(s) and the Stockholder;

     (vii) make available for inspection by the Stockholder, any underwriter participating in any disposition pursuant to a Registration Statement, and any attorney, accountant or other agent retained by the Stockholder or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors, employees and independent accountants to supply all information reasonably requested by the Stockholder, underwriter, attorney, accountant or agent in connection with such Registration Statement;

     (viii) use its best efforts to cause all such Registrable Common Stock to be listed on each securities exchange on which securities of the same class issued by the Company are then listed or, if no such similar securities are then listed, on the NYSE;

     (ix) provide a transfer agent and registrar for all such Registrable Common Stock not later than the effective date of such Registration Statement;

     (x) if requested, cause to be delivered, immediately prior to the pricing of any underwritten offering, immediately prior to effectiveness of each Registration Statement (and, in the case of an underwritten offering, at the time of closing of the sale of Registrable Common Stock pursuant thereto), letters from the Company’s independent registered public accountants addressed to the Stockholder and each underwriter, if any, stating that such accountants are independent public accountants within the meaning of the Securities Act and the applicable rules and regulations adopted by the SEC thereunder, and otherwise in customary form and covering such financial and accounting matters as are customarily covered by letters of the independent registered public accountants delivered in connection with primary underwritten public offerings;

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     (xi) make generally available to its stockholders a consolidated earnings statement (which need not be audited) for the 12 months beginning after the effective date of a Registration Statement as soon as reasonably practicable after the end of such period, which earnings statement shall satisfy the requirements of an earning statement under Section 11(a) of the Securities Act; and

     (xii) promptly notify the Stockholder and the underwriter or underwriters, if any:

(1) when the Registration Statement, any pre-effective amendment, the Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement has been filed and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective;

(2) of any written request by the SEC for amendments or supplements to the Registration Statement or any Prospectus or of any inquiry by the SEC relating to the Registration Statement or the Company’s status as a well-known seasoned issuer;

(3) of the notification to the Company by the SEC of its initiation of any proceeding with respect to the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement; and

(4) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Common Stock for sale under the applicable securities or blue sky laws of any jurisdiction.

     (b) The Company represents and warrants that no Registration Statement (including any amendments or supplements thereto and Prospectuses contained therein) shall contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein not misleading (except that the Company makes no representation or warranty with respect to information relating to the Stockholder furnished to the Company by or on behalf of the Stockholder specifically for use therein).

     (c) The Company shall make available to the Stockholder (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, one copy of each Registration Statement and any amendment thereto, each preliminary Prospectus and Prospectus and each amendment or supplement thereto, each

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letter written by or on behalf of the Company to the SEC or the staff of the SEC (or other governmental agency or self-regulatory body or other body having jurisdiction, including any domestic or foreign securities exchange), and each item of correspondence from the SEC or the staff of the SEC (or other governmental agency or self-regulatory body or other body having jurisdiction, including any domestic or foreign securities exchange), in each case relating to such Registration Statement or to any of the documents incorporated by reference therein, and (ii) such number of copies of each Prospectus, including a preliminary Prospectus, and all amendments and supplements thereto and such other documents as the Stockholder or any underwriter may reasonably request in order to facilitate the disposition of the Registrable Common Stock. The Company will promptly notify the Stockholder of the effectiveness of each Registration Statement or any post-effective amendment or the filing of any supplement or amendment to such Shelf Registration Statement or of any Prospectus supplement. The Company will promptly respond to any and all comments received from the SEC, with a view towards causing each Registration Statement or any amendment thereto to be declared effective by the SEC as soon as practicable and shall file an acceleration request, if necessary, as soon as practicable following the resolution or clearance of all SEC comments or, if applicable, following notification by the SEC that any such Registration Statement or any amendment thereto will not be subject to review.

     (d) The Company may require the Stockholder to furnish to the Company any other information regarding the Stockholder and the distribution of such securities as the Company reasonably determines, based on the advice of counsel, is required to be included in any Registration Statement.

     (e) The Stockholder agrees that, upon notice from the Company of the happening of any event as a result of which the Prospectus included (or deemed included) in such Registration Statement contains an untrue statement of a material fact or omits any material fact necessary to make the statements therein not misleading (a “Suspension Notice”), the Stockholder will forthwith discontinue disposition of Registrable Common Stock pursuant to such Registration Statement for a reasonable length of time not to exceed twenty (20) days until the Stockholder is advised in writing by the Company that the use of the Prospectus may be resumed and is furnished with a supplemented or amended Prospectus as contemplated by Section 8(a) hereof; provided, however, that such postponement of sales of Registrable Common Stock by the Stockholder shall not exceed sixty (60) days in the aggregate in any 12 month period. If the Company shall give the Stockholder any Suspension Notice, the Company shall extend the period of time during which the Company is required to maintain the applicable Registration Statements effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such Suspension Notice to and including the date the Stockholder either is advised by the Company that the use of the Prospectus may be resumed or receives the copies of the supplemented or amended Prospectus contemplated by Section 6(a) (a “Blackout Period”). In any event, the Company shall not be entitled to deliver more than a total of three (3) Suspension Notices in any 12 month period.

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     (f) The Company shall not permit any officer, director, underwriter, broker or any other person acting on behalf of the Company to use any free writing prospectus (as defined in Rule 405 under the Securities Act) in connection with any registration statement covering Registrable Common Stock, without the prior written consent of the Stockholder and any underwriter.

     7. Registration Expenses.

     (a) All expenses incident to the Company’s performance of or compliance with this Agreement, including, without limitation, all registration and filing fees (including SEC registration fees and NASD filing fees), fees and expenses of compliance with securities or blue sky laws, listing application fees, printing expenses, transfer agent’s and registrar’s fees, cost of distributing Prospectuses in preliminary and final form as well as any supplements thereto, and fees and disbursements of counsel for the Company and all accountants and other Persons retained by the Company (all such expenses being herein called “Registration Expenses”) (but not including any underwriting discounts or commissions or transfer taxes, if any, attributable to the sale of Registrable Common Stock), shall be borne by the Company. In addition, the Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing the securities to be registered on each securities exchange on which they are to be listed.

     (b) In connection with each registration initiated hereunder (whether a Shelf Registration Statement or a Piggyback Registration), the Company shall pay, or shall reimburse the Stockholder for, the reasonable fees and disbursements of one law firm chosen by the Stockholder as its counsel in connection with each Registration Statement and sale of Registrable Securities pursuant thereto; provided, however, that such reimbursement shall not exceed $100,000.

     (c) The obligation of the Company to bear the expenses described in Section 7(a) and to pay or reimburse the Stockholder for the expenses described in Section 7(b) shall apply irrespective of whether a registration, once properly requested becomes effective, is withdrawn or suspended, is converted to another form of registration and irrespective of when any of the foregoing shall occur or whether any sales of Registrable Securities ultimately take place.

     8. Indemnification.

     (a) The Company shall indemnify, to the fullest extent permitted by law, the Stockholder and its officers, directors, employees and Affiliates and each Person who controls the Stockholder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses arising out of or based upon any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus, preliminary Prospectus or any “issuer free writing prospectus” (as defined in Securities

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Act Rule 433) or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading or any violation or alleged violation by the Company of the Securities Act, the Exchange Act or applicable “blue sky” laws, except insofar as the same are made in reliance and in conformity with information relating to the Stockholder furnished in writing to the Company by the Stockholder expressly for use therein. In connection with an underwritten offering, the Company shall indemnify such underwriter(s), their officers, employees and directors and each Person who controls such underwriter(s) (within the meaning of the Securities Act) at least to the same extent as provided above with respect to the indemnification of the Stockholder.

     (b) In connection with any Registration Statement in which the Stockholder is participating, the Stockholder shall furnish to the Company in writing such information as the Company reasonably determines, based on the advice of counsel, is required to be included in any such Registration Statement or Prospectus and, shall indemnify, to the fullest extent permitted by law, the Company, its officers, employees, directors, Affiliates, and each Person who controls the Company (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses arising out of or based upon any untrue or alleged untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that the same are made in reliance and in conformity with information relating to the Stockholder furnished in writing to the Company by the Stockholder expressly for use therein.

     (c) Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (in addition to any local counsel) for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party there may be one or more legal or equitable defenses available to such indemnified party that are in addition to or may conflict with those available to another indemnified party with respect to such claim. Failure to give prompt written notice shall not release the indemnifying party from its obligations hereunder.

     (d) The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified

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party or any officer, director or controlling Person of such indemnified party and shall survive the transfer of securities.

     (e) If the indemnification provided for in or pursuant to this Section 10 is due in accordance with the terms hereof, but is held by a court to be unavailable or unenforceable in respect of any losses, claims, damages, liabilities or expenses referred to herein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified Person as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that result in such losses, claims, damages, liabilities or expenses as well as any other relevant equitable considerations. The relative fault of the indemnifying party on the one hand and of the indemnified Person on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party, and by such party’s relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. In no event shall the liability of the Stockholder be greater in amount than the amount of net proceeds received by the Stockholder upon such sale.

     9. Rule 144.

     The Company covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, and it will take such further action as the Stockholder may reasonably request to make available adequate current public information with respect to the Company meeting the current public information requirements of Rule 144(c) under the Securities Act, to the extent required to enable the Stockholder to sell Registrable Common Stock without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the request of the Stockholder, the Company will deliver to the Stockholder a written statement as to whether it has complied with such information and requirements.

     10. Transfer of Registration Rights.

          (a) The Stockholder may transfer all or any portion of its then-remaining rights under this Agreement to any Person (each, a “transferee”). Any transfer of registration rights pursuant to this Section 10 shall be effective upon receipt by the Company of (x) written notice from the Stockholder stating the name and address of any transferee and identifying the amount of Registrable Common Stock with respect to which the rights under this Agreement are being transferred and the nature of the rights so transferred and (y) a written agreement from the transferee to be bound by all of the terms of this Agreement. In connection with any such transfer, the term “Stockholder” as used in

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this Agreement shall, where appropriate to assign such rights to such transferee, be deemed to refer to the transferee holder of such Registrable Common Stock. The Stockholder and such transferees may exercise the registration rights hereunder in such proportion (not to exceed the then-remaining rights hereunder) as they shall agree among themselves.

          (b) After such transfer, the Stockholder shall retain its rights under this Agreement with respect to all other Registrable Common Stock owned by the Stockholder. Upon the request of the Stockholder, the Company shall execute a Registration Rights Agreement with such transferee or a proposed transferee substantially similar to the applicable sections of this Agreement.

     11. Conversion or Exchange of Other Securities.

     If the Stockholder offers Registrable Common Stock by forward sale, or any options, rights, warrants or other securities issued by it or any other person that are offered with, convertible into or exercisable or exchangeable for any Registrable Common Stock, the Registrable Common Stock subject to such forward sale or underlying such options, rights, warrants or other securities shall be eligible for registration pursuant to Sections 2 and 3 of this Agreement.

     12. Miscellaneous.

     (a) Notices. All notices, requests, consents and other communications required or permitted hereunder shall be in writing and shall be hand delivered or mailed postage prepaid by registered or certified mail or by facsimile transmission (with immediate telephone confirmation thereafter) and, in the case of the Stockholder, shall also be sent via e-mail,

If to the Company:

Libbey Inc.
Attn: Susan Kovach, General Counsel
300 Madison Avenue
Toledo, Ohio 43604
Facsimile No.: 419-325-2585
Email: susan.kovach@libbey.com

with a copy to (which shall not constitute notice):

Latham & Watkins LLP
Sears Tower, Suite 5800
233 South Wacker Drive
Chicago, IL 60606

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Attention: Christopher Lueking
Facsimile No.: 312-993-9767
Email: Christopher.Lueking@lw.com

If to the Stockholder:

Merrill Lynch PCG, Inc.
4 World Financial Center
18th Floor
New York, NY 10080
Attn: Lawrence First
Facsimile No.: 212-449-4296
Email: Lawrence_first@ml.com

With a copy to (which shall not constitute notice):

Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
Attention: Robert Copen, Esq.
Facsimile No.: (212) 735-2000
Email: rcopen@skadden.com

     If to a transferee Stockholder, to the address of such transferee Stockholder set forth in the transfer documentation provided to the Company;

in each case with copies to (which shall not constitute notice):

Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
Attention: Robert Copen, Esq.
Facsimile No.: (212) 735-2000

or at such other address as such party each may specify by written notice to the others, and each such notice, request, consent and other communication shall for all purposes of the Agreement be treated as being effective or having been given when delivered personally, upon one Business Day after being deposited with a courier if delivered by courier, upon receipt of confirmation if transmitted by facsimile or email, or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of United States mail, addressed and postage prepaid as aforesaid.

     (b) No Waivers. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial

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exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

     (c) Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. If the outstanding Common Stock is converted into or exchanged or substituted for other securities issued by any other Person, as a condition to the effectiveness of the merger, consolidation, reclassification, share exchange or other transaction pursuant to which such conversion, exchange, substitution or other transaction takes place, such other Person shall automatically become bound hereby with respect to such other securities constituting Registrable Securities and, if requested by the Stockholder or a permitted transferee, shall further evidence such obligation by executing and delivering to the Stockholder and such transferee a written agreement to such effect in form and substance satisfactory to the Stockholder.

     (d) Governing Law. The internal laws, and not the laws of conflicts (other than Section 5-1401 of the General Obligations Law of the State of New York), of New York shall govern the enforceability and validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties.

     (e) Exclusive Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may only be brought in any federal or state court located in the County and State of New York, and each of the parties hereby consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 12(a) shall be deemed effective service of process on such party.

     (f) Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     (g) Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts (including by facsimile) and by different parties hereto in separate counterparts, with the same effect as if all parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument. This Agreement shall become effective when each

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party hereto shall have received counterparts hereof signed by all of the other parties hereto.

     (h) Entire Agreement. This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes and replaces all other prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof.

     (i) Captions. The headings and other captions in this Agreement are for convenience and reference only and shall not be used in interpreting, construing or enforcing any provision of this Agreement.

     (j) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to affect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

     (k) Amendments. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given, without the written consent of the Company and the Stockholder.

     (l) Aggregation of Stock. All Registrable Common Stock held by or acquired by any Affiliated Persons will be aggregated together for the purpose of determining the availability of any rights under this Agreement.

     (m) Equitable Relief. The parties hereto agree that legal remedies may be inadequate to enforce the provisions of this Agreement and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions of this Agreement.

[Execution Page Follows]

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     IN WITNESS WHEREOF, this Registration rights Agreement has been duly executed by each of the parties hereto as of the date first written above.

LIBBEY INC.

By:	/s/ Susan A. Kovach
	Name: Susan A. Kovach
	Title: Vice President and General Counsel
MERRILL LYNCH PCG, INC.
By:	/s/ Neven Viducis
	Name: Neven Viducis
	Authorized Signatory

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EX-4.9

EXHIBIT 4.9

EXECUTION COPY

THREE PARTY INTERCREDITOR AGREEMENT

     Intercreditor Agreement (this “Agreement”), dated as of June 16, 2006, among JPMORGAN CHASE BANK, N.A., as Administrative Agent (in such capacity, with its successors and assigns, and as more specifically defined below, the “First Priority Representative”) for the First Priority Secured Parties (as defined below), The Bank of New York Trust Company, N.A, as Collateral Agent (in such capacity, with its successors and assigns, and as more specifically defined below, the “Second Priority Representative”) for the Second Priority Secured Parties (as defined below), Merrill Lynch PCG, Inc., as Secured Party (in such capacity, with its successors and assigns, and as more specifically defined below, the “Third Priority Representative”) for the Third Priority Secured Parties (as defined below), Libbey Glass, Inc. (the “Borrower”) and each of the other Loan Parties (as defined below) party hereto.

     WHEREAS, the Borrower, Libbey Europe B.V., Libbey Inc., as a loan guarantor, the other Loan Parties, the First Priority Representative and certain financial institutions and other entities (the “First Priority Lenders”) are parties to that certain Credit Agreement, dated as of June 16, 2006 (the “Existing First Priority Agreement”), pursuant to which such financial institutions and other entities have agreed to make loans and extend other financial accommodations to the Borrower and Libbey Europe, B.V.; and

     WHEREAS, the Borrower, the other Loan Parties and The Bank of New York Trust Company, N.A., as trustee (the “Trustee”), are parties to the Indenture, dated as of June 16, 2006 (the “Existing Second Priority Agreement”), pursuant to which the Borrower has issued to the holders (the “Holders”) its Floating Rate Senior Secured Notes due 2011 (the “Notes”), and may issue from time to time additional notes, upon the terms and subject to the conditions set forth therein and herein; and

     WHEREAS, the Borrower, the other Loan Parties and Merrill Lynch PGC, Inc. are parties to the Indenture, dated as of June 16, 2006 (the “Existing Third Priority Agreement”), pursuant to which the Borrower has issued to the holders (the “PIK Holders”) its Senior Subordinated Secured Pay in Kind Notes due 2011 (the “PIK Notes”), and may issue from time to time additional notes, upon the terms and subject to the conditions set forth therein and herein; and

     WHEREAS, the Borrower and the other Loan Parties have granted to the First Priority Representative security interests in the Common Collateral (as defined below) as security for payment and performance of the First Priority Obligations; and

     WHEREAS, the Borrower and the other Loan Parties have granted to the Second Priority Representative security interests in the Common Collateral as security for payment and performance of the Second Priority Obligations; and

     WHEREAS, the Borrower and the other Loan Parties have granted to the Third Priority Representative security interests in the Common Collateral as security for payment and performance of the Third Priority Obligations; and

     WHEREAS, it is a condition precedent to the purchase by the Holders of the Notes, by the PIK Holders of the PIK Notes, and to the obligations of the First Priority Lenders to make their respective extensions of credit from time to time to the Borrower that the parties hereto shall have executed and delivered this Agreement for the purpose of setting forth the relative priority of the liens created by the First Priority Security Documents, the Second Priority Security Documents and the Third Priority Security Documents (as such terms are hereinafter defined) in respect of the exercise of the rights and remedies in respect of the Common Collateral and the application of proceeds thereof;

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     NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained and other good and valuable consideration, the existence and sufficiency of which is expressly recognized by all of the parties hereto, the parties agree as follows:

     SECTION 1. Definitions.

     1.1. Defined Terms. The following terms, as used herein, have the following meanings:

     “Additional First Priority Agreement” means any agreement approved for designation as such by the First Priority Representative, the Second Priority Representative and the Third Priority Representative.

     “Additional Second Priority Agreement” means any agreement approved for designation as such by the First Priority Representative, the Second Priority Representative and the Third Priority Representative.

     “Additional Third Priority Agreement” means any agreement approved for designation as such by the First Priority Representative, the Second Priority Representative and the Third Priority Representative.

     “Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. §101 et seq.), as amended from time to time.

     “Borrower” has the meaning set forth in the introductory paragraph hereof.

     “Cash Management Obligations” means, with respect to any Loan Party, any obligations of such Loan Party owed to any First Priority Secured Party (or any of its affiliates) in respect of treasury management arrangements, depositary or other cash management services.

     “Common Collateral” means all assets that are First Priority Collateral, Second Priority Collateral and Third Priority Collateral.

     “DIP Financing” has the meaning set forth in Section 5.2.

     “Enforcement Action” means, with respect to the First Priority Obligations, the Second Priority Obligations or the Third Priority Obligations, any demand for payment or acceleration thereof, the exercise of any rights and remedies with respect to any Common Collateral securing such obligations or the commencement or prosecution of enforcement of any of the rights and remedies under, as applicable, the First Priority Documents, the Second Priority Documents or the Third Priority Documents, or applicable law, including without limitation the exercise of any rights of set-off or recoupment, and the exercise of any rights or remedies of a secured creditor under the Uniform Commercial Code of any applicable jurisdiction or under the Bankruptcy Code.

     “Existing First Priority Agreement” has the meaning set forth in the first WHEREAS clause of this Agreement.

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     “Existing Second Priority Agreement” has the meaning set forth in the second WHEREAS clause of this Agreement.

     “Existing Third Priority Agreement” has the meaning set forth in the third WHEREAS clause of this Agreement.

     “First Priority Agreement” means the collective reference to (a) the Existing First Priority Agreement, (b) any Additional First Priority Agreement and (c) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, replace, refinance or refund in whole or in part the indebtedness and other obligations outstanding under the Existing First Priority Agreement, any Additional First Priority Agreement or any other agreement or instrument referred to in this clause (c) unless such agreement or instrument expressly provides that it is not intended to be and is not a First Priority Agreement hereunder (a “Replacement First Priority Agreement”). Any reference to the First Priority Agreement hereunder shall be deemed a reference to any First Priority Agreement then extant.

     “First Priority Collateral” means all assets, whether now owned or hereafter acquired by the Borrower or any other Loan Party, in which a Lien is granted or purported to be granted to any First Priority Secured Party as security for any First Priority Obligation.

     “First Priority Creditors” means the First Priority Lenders, or any Persons that are designated under the First Priority Agreement as the “First Priority Creditors” for purposes of this Agreement.

     “First Priority Documents” means the First Priority Agreement, each First Priority Security Document and each First Priority Guarantee.

     “First Priority Guarantee” means any guarantee by any Loan Party of any or all of the First Priority Obligations.

     “First Priority Lender” has the meaning set forth in the first WHEREAS clause of this Agreement.

     “First Priority Lien” means any Lien created by the First Priority Security Documents.

     “First Priority Obligations” means (a) all principal of and interest (including without limitation any Post-Petition Interest) and premium (if any) on all loans made pursuant to the First Priority Agreement, (b) all reimbursement obligations (if any) and interest thereon (including without limitation any Post-Petition Interest) with respect to any letter of credit or similar instruments issued pursuant to the First Priority Agreement, (c) all Hedging Obligations, (d) all Cash Management Obligations and (e) all guarantee obligations, fees, expenses and other amounts payable from time to time pursuant to the First Priority Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding; provided, however, that the total amount of outstanding principal under the First Priority Agreement shall not exceed (i) $180,000,000.00 at any time during the PIK Period or (ii) $200,000,000.00 at any time following the expiration of the PIK Period provided no Event of Default has occurred and is continuing under the Existing Third Priority Agreement (except, in the case of clause (ii), to the extent that the Third Priority Representative has agreed in writing to permit such amount to be larger). To the extent any

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payment with respect to any First Priority Obligation (whether by or on behalf of any Loan Party, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance or a preference in any respect, set aside or required to be paid to a debtor in possession, any Second Priority Secured Party or Third Priority Secured Party, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the First Priority Secured Parties, the Second Priority Secured Parties and the Third Priority Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.

     “First Priority Obligations Payment Date” means the first date on which (a) the First Priority Obligations (other than those that constitute Unasserted Contingent Obligations) have been indefeasibly paid in cash in full (or cash collateralized or defeased in accordance with the terms of the First Priority Documents), (b) all commitments to extend credit under the First Priority Documents have been terminated, (c) there are no outstanding letters of credit or similar instruments issued under the First Priority Documents (other than such as have been cash collateralized or defeased in accordance with the terms of the First Priority Security Documents), and (d) the First Priority Representative has delivered a written notice to the Second Priority Representative and the Third Priority Representative stating that the events described in clauses (a), (b) and (c) have occurred to the satisfaction of the First Priority Secured Parties.

     “First Priority Representative” has the meaning set forth in the introductory paragraph hereof. In the case of any Replacement First Priority Agreement, the First Priority Representative shall be the Person identified as such in such Agreement.

     “First Priority Secured Parties” means the First Priority Representative, the First Priority Creditors and any other holders of the First Priority Obligations.

     “First Priority Security Documents” means the “US Collateral Documents” as defined in the First Priority Agreement, and any other documents that are designated under the First Priority Agreement as “First Priority Security Documents” for purposes of this Agreement.

     “Hedging Obligations” means, with respect to any Loan Party, any obligations of such Loan Party owed to any First Priority Creditor (or any of its affiliates) in respect of any swap agreement or hedge agreement in respect of interest rates, currency exchange rates or commodity prices.

     “Holder” has the meaning set forth in the second WHEREAS clause of this Agreement.

     “Insolvency Proceeding” means any proceeding in respect of bankruptcy, insolvency, winding up, receivership, dissolution or assignment for the benefit of creditors, in each of the foregoing events whether under the Bankruptcy Code or any similar federal, state or foreign bankruptcy, insolvency, reorganization, receivership or similar law.

     “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, deed to secure debt, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to

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such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

     “Loan Party” means the Borrower and each direct or indirect affiliate or shareholder (or equivalent) of the Borrower or any of its affiliates that is now or hereafter becomes a party to any First Priority Document, Second Priority Document or Third Priority Document; provided, however, that any Loan Party which is not organized under the laws of the United States of America or any state thereof or the District of Columbia and is not required to be a party to any Second Priority Document or Third Priority Document shall not be considered a Loan Party hereunder. All references in this Agreement to any Loan Party shall include such Loan Party as a debtor-in-possession and any receiver or trustee for such Loan Party in any Insolvency Proceeding.

     “Note” has the meaning set forth in the second WHEREAS clause of this Agreement.

     “Person” means any person, individual, sole proprietorship, partnership, joint venture, corporation, limited liability company, unincorporated organization, association, institution, entity, party, including any government and any political subdivision, agency or instrumentality thereof.

     “PIK Holder” has the meaning set forth in the third WHEREAS clause of this Agreement.

     “PIK Note” has the meaning set forth in the third WHEREAS clause of this Agreement.

     “PIK Period” means the period of time from the issuance of the PIK Notes until the earlier of (x) the date on which the Borrower shall pay interest on the PIK Notes in cash and (y) the date on which the PIK Notes are redeemed.

     “Post-Petition Interest” means any interest or entitlement to fees or expenses or other charges that accrues after the commencement of any Insolvency Proceeding, whether or not allowed or allowable in any such Insolvency Proceeding.

     “Replacement First Priority Agreement” has the meaning set forth in the definition of “First Priority Agreement”.

     “Second Priority Agreement” means the collective reference to (a) the Existing Second Priority Agreement, (b) any Additional Second Priority Agreement and (c) any other credit agreement, loan agreement, note agreement, promissory note, indenture, or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, replace, refinance or refund in whole or in part the indebtedness and other obligations outstanding under the Existing Second Priority Agreement, any Additional Second Priority Agreement or any other agreement or instrument referred to in this clause (c). Any reference to the Second Priority Agreement hereunder shall be deemed a reference to any Second Priority Agreement then extant.

     “Second Priority Collateral” means all assets, whether now owned or hereafter acquired by the Borrower or any other Loan Party, in which a Lien is granted or purported to be granted to any Second Priority Secured Party as security for any Second Priority Obligation.

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     “Second Priority Creditors” means the Holders, or any Persons that are designated under the Second Priority Agreement as the “Second Priority Creditors” for purposes of this Agreement.

     “Second Priority Documents” means each Second Priority Agreement, each Second Priority Security Document and each Second Priority Guarantee.

     “Second Priority Guarantee” means any guarantee by any Loan Party of any or all of the Second Priority Obligations.

     “Second Priority Lien” means any Lien created by the Second Priority Security Documents.

     “Second Priority Obligations” means (a) all principal of and interest (including without limitation any Post-Petition Interest) and premium (if any) on all indebtedness under the Second Priority Agreement, and (b) all guarantee obligations, fees, expenses and other amounts payable from time to time pursuant to the Second Priority Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding; provided, however, that the total amount of outstanding principal under the Second Priority Agreement shall not exceed $306,000,000.00 (except to the extent that the First Priority Representative and the Third Priority Representative have agreed in writing to permit such amount to be larger). To the extent any payment with respect to any Second Priority Obligation (whether by or on behalf of any Loan Party, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance or a preference in any respect, set aside or required to be paid to a debtor in possession, any First Priority Secured Party or Third Priority Secured Party, receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the First Priority Secured Parties, the Second Priority Secured Parties and the Third Priority Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.

     “Second Priority Obligations Payment Date” means the first date on which (a) the Second Priority Obligations have been indefeasibly paid in cash in full (or defeased in accordance with the terms of the First Priority Documents), and (b) the Second Priority Representative has delivered a written notice to the First Priority Representative and the Third Priority Representative stating that the events described in clause (a) have occurred to the satisfaction of the Second Priority Secured Parties.

     “Second Priority Representative” has the meaning set forth in the introductory paragraph hereof, but shall also include any Person identified as a “Second Priority Representative” in any Second Priority Agreement other than the Existing Second Priority Agreement.

     “Second Priority Secured Party” means the Second Priority Representative, the Second Priority Creditors and any other holders of the Second Priority Obligations.

     “Second Priority Security Documents” means the “Collateral Documents” as defined in the Second Priority Agreement and any documents that are designated under the Second Priority Agreement as “Second Priority Security Documents” for purposes of this Agreement.

     “Secured Parties” means the First Priority Secured Parties, the Second Priority Secured Parties and the Third Priority Secured Parties.

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     “Third Priority Agreement” means the collective reference to (a) the Existing Third Priority Agreement, (b) any Additional Third Priority Agreement and (c) any other credit agreement, loan agreement, note agreement, promissory note, indenture, or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to extend, replace, refinance or refund in whole or in part the indebtedness and other obligations outstanding under the Existing Third Priority Agreement, any Additional Third Priority Agreement or any other agreement or instrument referred to in this clause (c). Any reference to the Third Priority Agreement hereunder shall be deemed a reference to any Third Priority Agreement then extant.

     “Third Priority Collateral” means all assets, whether now owned or hereafter acquired by the Borrower or any other Loan Party, in which a Lien is granted or purported to be granted to any Third Priority Secured Party as security for any Third Priority Obligation.

     “Third Priority Creditors” means the PIK Holders, or any Persons that are designated under the Third Priority Agreement as the “Third Priority Creditors” for purposes of this Agreement.

     “Third Priority Documents” means each Third Priority Agreement, each Third Priority Security Document and each Third Priority Guarantee.

     “Third Priority Guarantee” means any guarantee by any Loan Party of any or all of the Third Priority Obligations.

     “Third Priority Lien” means any Lien created by the Third Priority Security Documents.

     “Third Priority Obligations” means (a) all principal of and interest (including without limitation any Post-Petition Interest) and premium (if any) on all indebtedness under the Third Priority Agreement, and (b) all guarantee obligations, fees, expenses and other amounts payable from time to time pursuant to the Third Priority Documents, in each case whether or not allowed or allowable in an Insolvency Proceeding; provided, however, that the total amount of outstanding principal under the Third Priority Agreement shall not exceed $102,000,000.00 plus increases in such principal amount through the issuance of payment-in-kind notes pursuant to the terms of the Third Priority Agreement (except to the extent that the First Priority Reprentative has agreed in writing to permit such amount to be larger). To the extent any payment with respect to any Third Priority Obligation (whether by or on behalf of any Loan Party, as proceeds of security, enforcement of any right of setoff or otherwise) is declared to be a fraudulent conveyance or a preference in any respect, set aside or required to be paid to a debtor in possession, any First Priority Secured Party, Second Priority Secured Party receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall, for the purposes of this Agreement and the rights and obligations of the First Priority Secured Parties, the Second Priority Secured Parties and Third Priority Secured Parties, be deemed to be reinstated and outstanding as if such payment had not occurred.

     “Third Priority Representative” has the meaning set forth in the introductory paragraph hereof, but shall also include any Person identified as a “Third Priority Representative” in any Third Priority Agreement other than the Existing Third Priority Agreement.

     “Third Priority Secured Party” means the Third Priority Representative, the Third Priority Creditors and any other holders of the Third Priority Obligations.

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     “Third Priority Security Documents” means the “Collateral Documents” as defined in the Third Priority Agreement and any documents that are designated under the Third Priority Agreement as “Third Priority Security Documents” for purposes of this Agreement.

     “Trustee” has the meaning set forth in the second WHEREAS clause of this Agreement

     “Unasserted Contingent Obligations” shall mean, at any time, First Priority Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (excluding (a) the principal of, and interest and premium (if any) on, and fees and expenses relating to, any First Priority Obligation and (b) contingent reimbursement obligations in respect of amounts that may be drawn under outstanding letters of credit) in respect of which no written assertion of liability and no written claim or demand for payment has been made (and, in the case of First Priority Obligations for indemnification, no notice for indemnification has been issued by the indemnitee) at such time.

     “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.

     1.2 Amended Agreements. All references in this Agreement to agreements or other contractual obligations shall, unless otherwise specified, be deemed to refer to such agreements or contractual obligations as amended, supplemented, restated or otherwise modified from time to time.

     SECTION 2. Lien Priorities.

     2.1 Subordination of Liens. (a) Any and all Liens now existing or hereafter created or arising in favor of any Second Priority Secured Party securing the Second Priority Obligations, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise are expressly junior in priority, operation and effect to any and all Liens now existing or hereafter created or arising in favor of the First Priority Secured Parties securing the First Priority Obligations, notwithstanding (i) anything to the contrary contained in any agreement or filing to which any Second Priority Secured Party may now or hereafter be a party, and regardless of the time, order or method of grant, attachment, recording or perfection of any financing statements or other security interests, assignments, pledges, deeds, mortgages and other liens, charges or encumbrances or any defect or deficiency or alleged defect or deficiency in any of the foregoing, (ii) any provision of the Uniform Commercial Code or any applicable law or any First Priority Document or Second Priority Document or any other circumstance whatsoever and (iii) the fact that any such Liens in favor of any First Priority Secured Party securing any of the First Priority Obligations are (x) subordinated to any Lien securing any obligation of any Loan Party other than the Second Priority Obligations or (y) otherwise subordinated, voided, avoided, invalidated or lapsed.

     (b) Any and all Liens now existing or hereafter created or arising in favor of any Third Priority Secured Party securing the Third Priority Obligations, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise are expressly junior in priority, operation and effect to any and all Liens now existing or hereafter created or arising in favor of the First Priority Secured Parties securing the First Priority Obligations and the Second Priority Secured Parties securing the Second Priority Obligations, notwithstanding (i) anything to the contrary contained in any agreement or filing to which any Third Priority Secured Party may now or hereafter be a party, and regardless of the time, order or method of grant, attachment, recording or perfection of any financing statements or other security interests, assignments, pledges, deeds, mortgages and other liens, charges or encumbrances or any defect

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or deficiency or alleged defect or deficiency in any of the foregoing, (ii) any provision of the Uniform Commercial Code or any applicable law or any First Priority Document, Second Priority Document or Third Priority Security Document or any other circumstance whatsoever and (iii) the fact that any such Liens in favor of any First Priority Secured Party securing any of the First Priority Obligations or Second Priority Secured Party securing any of the Second Priority Obligations are (x) subordinated to any Lien securing any obligation of any Loan Party other than the Third Priority Obligations or (y) otherwise subordinated, voided, avoided, invalidated or lapsed.

     (c) No First Priority Secured Party, Second Priority Secured Party or Third Priority Secured Party shall object to or contest, or support any other Person in contesting or objecting to, in any proceeding (including without limitation, any Insolvency Proceeding), the validity, extent, perfection, priority or enforceability of any security interest in the Common Collateral granted to any other. Notwithstanding any failure by any First Priority Secured Party, Second Priority Secured Party or Third Priority Secured Party to perfect its security interests in the Common Collateral or any avoidance, invalidation or subordination by any third party or court of competent jurisdiction of the security interests in the Common Collateral granted to the First Priority Secured Parties, the Second Priority Secured Parties or the Third Priority Secured Parties, the priority and rights as among the First Priority Secured Parties, the Second Priority Secured Parties and the Third Priority Secured Parties with respect to the Common Collateral shall be as set forth herein.

     2.2 Nature of First Priority Obligations. The Second Priority Representative on behalf of itself and the other Second Priority Secured Parties and the Third Priority Representative on behalf of the itself and the other Third Priority Secured Parties acknowledge that a portion of the First Priority Obligations represents debt that is revolving in nature and that the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, and that the terms of the First Priority Obligations may be modified, extended or amended from time to time, and that the aggregate amount of the First Priority Obligations may be increased, replaced or refinanced, in each event, without notice to or consent by the Second Priority Secured Parties and the Third Priority Secured Parties and without affecting the provisions hereof. The lien priorities provided in Section 2.1 shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of either the First Priority Obligations, the Second Priority Obligations or the Third Priority Obligations, or any portion thereof.

     2.3 Agreements Regarding Actions to Perfect Liens. (a) The Second Priority Representative on behalf of itself and the other Second Priority Secured Parties agrees that UCC-1 financing statements, patent, trademark or copyright filings or other filings or recordings filed or recorded by or on behalf of the Second Priority Representative shall be in form satisfactory to the First Priority Representative. The Third Priority Representative on behalf of itself and the other Third Priority Secured Parties agrees that UCC-1 financing statements, patent, trademark or copyright filings or other filings or recordings filed or recorded by or on behalf of the Third Priority Representative shall be in form satisfactory to the First Priority Representative and the Second Priority Representative.

     (b) The Second Priority Representative agrees on behalf of itself and the other Second Priority Secured Parties that all mortgages, deeds of trust, deeds and similar instruments (collectively, “mortgages”) now or thereafter filed against real property in favor of or for the benefit of the Second Priority Representative shall be in form satisfactory to the First Priority Representative and shall contain

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the following notation: “The lien created by this mortgage on the property described herein is junior and subordinate to the lien on such property created by any mortgage, deed of trust or similar instrument now or hereafter granted to JPMorgan Chase Bank, N.A., as Administrative Agent, and its successors and assigns, in such property, in accordance with the provisions of the Intercreditor Agreement dated as of June 16, 2006 among JPMorgan Chase Bank, N.A., as Administrative Agent, The Bank of New York Trust Company, N.A., as Collateral Agent, Merrill PCG, Inc., as Secured Party and the Loan Parties referred to therein, as amended from time to time.” The Third Priority Representative agrees on behalf of itself and the other Third Priority Secured Parties that all mortgages, deeds of trust, deeds and similar instruments (collectively, “mortgages”) now or thereafter filed against real property in favor of or for the benefit of the Third Priority Representative shall be in form satisfactory to the First Priority Representative and the Second Priority Representative and shall contain the following notation: “The lien created by this mortgage on the property described herein is junior and subordinate to the lien on such property created by any mortgage, deed of trust or similar instrument now or hereafter granted to JPMorgan Chase Bank, N.A., as Administrative Agent, and its successors and assigns, in such property, and the lien on such property created by any mortgage, deed of trust or similar instrument now or hereafter granted to The Bank of New York Trust Company, N.A., as Collateral Agent, and its successors and assigns, in such property, in accordance with the provisions of the Intercreditor Agreement dated as of June 16, 2006 among JPMorgan Chase Bank, N.A., as Administrative Agent, The Bank of New York Trust Company, N.A., as Collateral Agent, Merrill PCG, Inc., as Secured Party, and the Loan Parties referred to therein, as amended from time to time.”

     (c) The First Priority Representative hereby acknowledges that, to the extent that it holds, or a third party holds on its behalf, physical possession of or “control” (as defined in the Uniform Commercial Code) over Common Collateral pursuant to the First Priority Security Documents, such possession or control is also for the benefit of the Second Priority Representative and the other Second Priority Secured Parties, and the Third Priority Representative and the other Third Priority Secured Parties, solely to the extent required to perfect their security interest in such Common Collateral. Nothing in the preceding sentence shall be construed to impose any duty on the First Priority Representative (or any third party acting on its behalf) with respect to such Common Collateral or provide the Second Priority Representative or any other Second Priority Secured Party, or the Third Priority Representative or any other Third Priority Secured Party, with any rights with respect to such Common Collateral beyond those specified in this Agreement and the Second Priority Security Documents or Third Priority Security Documents, as applicable; provided that subsequent to the occurrence of the First Priority Obligations Payment Date, the First Priority Representative shall (i) deliver to the Second Priority Representative, at the Borrower’s sole cost and expense, the Common Collateral in its possession or control together with any necessary endorsements to the extent required by the Second Priority Documents or (ii) direct and deliver such Common Collateral as a court of competent jurisdiction otherwise directs, and provided, further, that the provisions of this Agreement are intended solely to govern the respective Lien priorities as between the First Priority Secured Parties, the Second Priority Secured Parties and the Third Priority Secured Parties and shall not impose on the First Priority Secured Parties any obligations in respect of the disposition of any Common Collateral (or any proceeds thereof) that would conflict with prior perfected Liens or any claims thereon in favor of any other Person that is not a Secured Party.

     (d) The Second Priority Representative hereby acknowledges that, to the extent that it holds, or a third party holds on its behalf, physical possession of or “control” (as defined in the Uniform Commercial Code) over Common Collateral pursuant to the Second Priority Security Documents, such possession or control is also for the benefit of the Third Priority Representative and the other Third Priority Secured

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Parties and the First Priority Representative and the other First Priority Secured Parties, solely to the extent required to perfect their security interest in such Common Collateral. Nothing in the preceding sentence shall be construed to impose any duty on the Second Priority Representative (or any third party acting on its behalf) with respect to such Common Collateral or provide the Third Priority Representative or any other Third Priority Secured Party, or the First Priority Representative or any other First Priority Secured Party, with any rights with respect to such Common Collateral beyond those specified in this Agreement and the Third Priority Security Documents or First Priority Security Documents, as applicable; provided that subsequent to the occurrence of the Second Priority Obligations Payment Date, the Second Priority Representative shall (i) deliver to the Third Priority Representative, at the Borrower’s sole cost and expense, the Common Collateral in its possession or control together with any necessary endorsements to the extent required by the Third Priority Documents or (ii) direct and deliver such Common Collateral as a court of competent jurisdiction otherwise directs, and provided, further, that the provisions of this Agreement are intended solely to govern the respective Lien priorities as between the First Priority Secured Parties, the Second Priority Secured Parties and the Third Priority Secured Parties and shall not impose on the Second Priority Secured Parties any obligations in respect of the disposition of any Common Collateral (or any proceeds thereof) that would conflict with prior perfected Liens or any claims thereon in favor of any other Person that is not a Secured Party.

     (e) The Third Priority Representative hereby acknowledges that, to the extent that it holds, or a third party holds on its behalf, physical possession of or “control” (as defined in the Uniform Commercial Code) over Common Collateral pursuant to the Second Priority Security Documents, such possession or control is also for the benefit of the Second Priority Representative and the other Second Priority Secured Parties and the First Priority Representative and the other First Priority Secured Parties, solely to the extent required to perfect their security interest in such Common Collateral. Nothing in the preceding sentence shall be construed to impose any duty on the Third Priority Representative (or any third party acting on its behalf) with respect to such Common Collateral or provide the Second Priority Representative or any other Second Priority Secured Party, or the First Priority Representative or any other First Priority Secured Party, with any rights with respect to such Common Collateral beyond those specified in this Agreement and the Second Priority Security Documents or First Priority Security Documents, as applicable; provided that the provisions of this Agreement are intended solely to govern the respective Lien priorities as between the First Priority Secured Parties, the Second Priority Secured Parties and the Third Priority Secured Parties and shall not impose on the Third Priority Secured Parties any obligations in respect of the disposition of any Common Collateral (or any proceeds thereof) that would conflict with prior perfected Liens or any claims thereon in favor of any other Person that is not a Secured Party.

     2.4 No New Liens. (a) So long as the First Priority Obligations Payment Date has not occurred, the parties hereto agree that (x) there shall be no Lien, and no Loan Party shall have any right to create any Lien, on any assets of any Loan Party securing any Second Priority Obligation or Third Priority Obligation if these same assets are not subject to, and do not become subject to, a Lien securing the First Priority Obligations and (y) if any Second Priority Secured Party or Third Priority Secured Party shall acquire or hold any Lien on any assets of any Loan Party securing any Second Priority Obligation or Third Priority Obligation which assets are not also subject to the first-priority Lien of the First Priority Representative under the First Priority Documents, then the Second Priority Representative or Third Priority Representative, as the case may be, upon demand by the First Priority Representative, will without the need for any further consent of any other Second Priority Secured Party or Third Priority Secured Party, notwithstanding anything to the contrary in any other Second Priority Document or Third

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Priority Document either (i) release such Lien or (ii) assign it to the First Priority Representative as security for the First Priority Obligations (in which case the Second Priority Representative or Third Priority Representative, as the case may be, may retain a junior lien on such assets subject to the terms hereof). To the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and remedies available to the First Priority Secured Parties, the Second Priority Representative and the other Second Priority Secured Parties, and the Third Priority Secured Representative and the other Third Priority Secured Parties agree that any amounts received by or distributed to any of them pursuant to or as a result of Liens granted in contravention of this Section 2.4 shall be subject to Section 4.1.

     (b) So long as the Second Priority Obligations Payment Date has not occurred, the parties hereto agree that (x) there shall be no Lien, and no Loan Party shall have any right to create any Lien, on any assets of any Loan Party securing any Third Priority Obligation if these same assets are not subject to, and do not become subject to, a Lien securing the Second Priority Obligations and (y) if any Third Priority Secured Party shall acquire or hold any Lien on any assets of any Loan Party securing any Third Priority Obligation which assets are not also subject to the second-priority Lien of the Second Priority Representative under the Second Priority Documents, then the Third Priority Representative, upon demand by the Second Priority Representative, will without the need for any further consent of any other Third Priority Secured Party, notwithstanding anything to the contrary in any other Third Priority Document either (i) release such Lien or (ii) assign it to the Second Priority Representative as security for the Second Priority Obligations (in which case the Third Priority Representative may retain a junior lien on such assets subject to the terms hereof). To the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and remedies available to the Second Priority Secured Parties, the Third Priority Secured Representative and the other Third Priority Secured Parties agree that any amounts received by or distributed to any of them pursuant to or as a result of Liens granted in contravention of this Section 2.4 shall be subject to Section 4.1.

     SECTION 3. Enforcement Rights.

     3.1 Exclusive Enforcement. (a) Until the First Priority Obligations Payment Date has occurred, whether or not an Insolvency Proceeding has been commenced by or against any Loan Party, the First Priority Secured Parties shall have the exclusive right to take and continue any Enforcement Action with respect to the Common Collateral, without any consultation with or consent of any Second Priority Secured Party or Third Priority Secured Party, but subject to the proviso set forth in Section 5.1; provided, however, that (i) the Second Priority Representative may take and continue any Enforcement Action with respect to the Common Collateral after a period of at least 180 days has elapsed since the later of: (I) the date on which the Second Priority Representative declared the existence of a default with respect to the Second Priority Agreement, accelerated (to the extent such amount was not already due and owing) the payment of the principal amount of the Second Priority Obligations, and demanded payment thereof and (II) the date on which the First Priority Representative received a notice from the Second Priority Representative as to actions described in clause (I), above, and (ii) the Third Priority Representative may take and continue any Enforcement Action with respect to the Common Collateral after a period of at least 360 days has elapsed since the later of: (I) the date on which the Third Priority Representative declared the existence of a default with respect to the Third Priority Agreement, accelerated (to the extent such amount was not already due and owing) the payment of the principal amount of the Third Priority Obligations, and demanded payment therof and (II) the date on which the First Priority Representative and the Second Priority Representative received a notice from the Third

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Priority Representative as to actions described in clause (I), above; provided further, however, that (x) neither the Second Priority Representative nor any other Second Priority Secured Party shall be entitled to exercise (and shall not exercise) any rights, powers, or remedies with respect to the Common Collateral if, notwithstanding the expiration of such 180 day period, the First Priority Representative or the other First Priority Secured Parties (A) shall have commenced and be diligently pursuing the exercise of their rights, powers, or remedies with respect to all or any material portion of such Common Collateral (prompt notice of such exercise to be given to the Second Priority Representative) or (B) shall have been stayed by operation of law or any court order from pursuing any such exercise of remedies and (y) neither the Third Priority Representative nor any other Third Priority Secured Party shall be entitled to exercise (and shall not exercise) any rights, powers, or remedies with respect to the Common Collateral if, notwithstanding the expiration of such 360 day period, the First Priority Representative or the other First Priority Secured Parties, or the Second Priority Representative or the other Second Priority Secured Parties, (A) shall have commenced and be diligently pursuing the exercise of their rights, powers, or remedies with respect to all or any material portion of such Common Collateral (prompt notice of such exercise to be given to the Third Priority Representative) or (B) shall have been stayed by operation of law or any court order from pursuing any such exercise of remedies. Upon the occurrence and during the continuance of a default or an event of default under the First Priority Documents, the First Priority Representative and the other First Priority Secured Parties may take and continue any Enforcement Action with respect to the First Priority Obligations and the Common Collateral in such order and manner as they may determine in their sole discretion, in accordance with the terms of the First Priority Documents.

     (b) Following the occurrence of the First Priority Obligations Payment Date, and until the Second Priority Obligations Payment Date has occurred, whether or not an Insolvency Proceeding has been commenced by or against any Loan Party, the Second Priority Secured Parties shall have the exclusive right to take and continue any Enforcement Action with respect to the Common Collateral, without any consultation with or consent of any Third Priority Secured Party, but subject to the proviso set forth in Section 5.1; provided, however, that the Third Priority Representative may take and continue any Enforcement Action with respect to the Common Collateral after a period of at least 180 days has elapsed since the later of: (i) the date on which the Third Priority Representative declared the existence of a default with respect to the Third Priority Agreement, accelerated (to the extent such amount was not already due and owing) the payment of the principal amount of the Third Priority Obligations, and demanded payment thereof and (ii) the date on which the Second Priority Representative received a notice from the Third Priority Representative as to actions described in clause (i), above; provided further, however, that neither the Third Priority Representative nor any other Third Priority Secured Party shall be entitled to exercise (and shall not exercise) any rights, powers, or remedies with respect to the Common Collateral if, notwithstanding the expiration of such 180 day period, the Second Priority Representative or the other Second Priority Secured Parties (A) shall have commenced and be diligently pursuing the exercise of their rights, powers, or remedies with respect to all or any material portion of such Common Collateral (prompt notice of such exercise to be given to the Third Priority Representative) or (B) shall have been stayed by operation of law or any court order from pursuing any such exercise of remedies. Following the occurrence of the First Priority Obligations Payment Date, and upon the occurrence and during the continuance of a default or an event of default under the Second Priority Documents, the Second Priority Representative and the other Second Priority Secured Parties may take and continue any Enforcement Action with respect to the Second Priority Obligations and the Common Collateral in such order and manner as they may determine in their sole discretion, in accordance with the terms of the Second Priority Documents.

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     3.2 Standstill and Waivers. (a) The Second Priority Representative, on behalf of itself as a Second Priority Secured Party and the other Second Priority Secured Parties, and the Third Priority Representative, on behalf of itself and the other Third Priority Secured Parties, each agree that, until the First Priority Obligations Payment Date has occurred, subject to the provisos set forth in Section 3.1(a), Section 3.1(b) and Section 5.1:

     (1) they will not take or cause to be taken any action, the purpose or effect of which is to make any Lien in respect of any Second Priority Obligation or Third Priority Obligation pari passu with or senior to, or to give any Second Priority Secured Party or Third Priority Secured Party any preference or priority relative to, the Liens with respect to the First Priority Obligations or the First Priority Secured Parties with respect to any of the Common Collateral;

     (2) they will not contest, oppose, object to, interfere with, hinder or delay, in any manner, whether by judicial proceedings (including without limitation the filing of an Insolvency Proceeding) or otherwise, any foreclosure, sale, lease, exchange, transfer or other disposition of the Common Collateral by any First Priority Secured Party or any other Enforcement Action taken (or any forbearance from taking any Enforcement Action) by or on behalf of any First Priority Secured Party with respect to the Common Collateral;

     (3) they have no right to (i) direct either the First Priority Representative or any other First Priority Secured Party to exercise any right, remedy or power with respect to the Common Collateral or pursuant to the First Priority Security Documents or (ii) consent or object to the exercise by the First Priority Representative or any other First Priority Secured Party of any right, remedy or power with respect to the Common Collateral or pursuant to the First Priority Security Documents or to the timing or manner in which any such right is exercised or not exercised (or, to the extent they may have any such right described in this clause (3), whether as a junior lien creditor or otherwise, they hereby irrevocably waive such right);

     (4) they will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against any First Priority Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, and no First Priority Secured Party shall be liable for, any action taken or omitted to be taken by any First Priority Secured Party with respect to the Common Collateral or pursuant to the First Priority Documents to the extent done in conformance with the terms of this Agreement;

     (5) they will not make any judicial or nonjudicial claim or demand or commence any judicial or non-judicial proceedings against any Loan Party or any of its subsidiaries or affiliates under or with respect to any Second Priority Security Document or Third Priority Security Document seeking payment or damages from or other relief by way of specific performance, instructions or otherwise under or with respect to any Second Priority Security Document or Third Priority Security Document (other than filing a proof of claim) or exercise any right, remedy or power under or with respect to, or otherwise take any action to enforce, other than filing a proof of claim, any Second Priority Security Document or Third Priority Security Document;

     (6) they will not commence judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any

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action to take possession of any Common Collateral, exercise any right, remedy or power with respect to, or otherwise take any action to enforce their interest in or realize upon, the Common Collateral or pursuant to the Second Priority Security Documents or the Third Priority Security Documents; and

     (7) they will not seek, and hereby waive any right, to have the Common Collateral or any part thereof marshaled upon any foreclosure or other disposition of the Common Collateral.

       (b) Following the occurrence of the First Priority Obligations Payment Date, the Third Priority Representative, on behalf of itself and the other Third Priority Secured Parties, agrees that, until the Second Priority Obligations Payment Date has occurred, subject to the proviso set forth in Section 5.1:

     (1) it will not take or cause to be taken any action, the purpose or effect of which is to make any Lien in respect of any Third Priority Obligation pari passu with or senior to, or to give any Third Priority Secured Party any preference or priority relative to, the Liens with respect to the Second Priority Obligations or the Second Priority Secured Parties with respect to any of the Common Collateral;

     (2) it will not contest, oppose, object to, interfere with, hinder or delay, in any manner, whether by judicial proceedings (including without limitation the filing of an Insolvency Proceeding) or otherwise, any foreclosure, sale, lease, exchange, transfer or other disposition of the Common Collateral by any Second Priority Secured Party or any other Enforcement Action taken (or any forbearance from taking any Enforcement Action) by or on behalf of any Second Priority Secured Party with respect to the Common Collateral;

     (3) it has no right to (i) direct either the Second Priority Representative or any other Second Priority Secured Party to exercise any right, remedy or power with respect to the Common Collateral or pursuant to the Second Priority Security Documents or (ii) consent or object to the exercise by the Second Priority Representative or any other Second Priority Secured Party of any right, remedy or power with respect to the Common Collateral or pursuant to the Second Priority Security Documents or to the timing or manner in which any such right is exercised or not exercised (or, to the extent they may have any such right described in this clause (3), whether as a junior lien creditor or otherwise, they hereby irrevocably waive such right);

     (4) it will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against any Second Priority Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, and no Second Priority Secured Party shall be liable for, any action taken or omitted to be taken by any Second Priority Secured Party with respect to the Common Collateral or pursuant to the Second Priority Documents to the extent done in conformance with the terms of this Agreement;

     (5) it will not make any judicial or nonjudicial claim or demand or commence any judicial or non-judicial proceedings against any Loan Party or any of its subsidiaries or affiliates under or with respect to any Third Priority Security Document seeking payment or damages from or other relief by way of specific performance, instructions or otherwise under or with respect to any Third Priority Security Document (other than filing a proof of claim) or exercise any right,

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remedy or power under or with respect to, or otherwise take any action to enforce, other than filing a proof of claim, any Third Priority Security Document;

     (6) it will not commence judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of any Common Collateral, exercise any right, remedy or power with respect to, or otherwise take any action to enforce their interest in or realize upon, the Common Collateral or pursuant to the Third Priority Security Documents;

     (7) it will seek, and hereby waive any right, to have the Common Collateral or any part thereof marshaled upon any foreclosure or other disposition of the Common Collateral.

       3.3 Judgment Creditors. In the event that any Second Priority Secured Party or Third Priority Secured Party becomes a judgment lien creditor in respect of Common Collateral as a result of its enforcement of its rights as an unsecured creditor, such judgment lien shall be subject to the terms of this Agreement for all purposes (including in relation to the First Priority Liens and the First Priority Obligations and the Second Priority Liens and the Second Priority Obligations) to the same extent as all other Liens securing the Second Priority Obligations or the Third Priority Obligations are subject to the terms of this Agreement.

       3.4 Cooperation. The Second Priority Representative, on behalf of itself as a Second Priority Secured Party and the other Second Priority Secured Parties, and the Third Priority Representative, on behalf of itself and the other Third Priority Secured Parties, each agree that each of them shall take such actions as the First Priority Representative shall request in connection with the exercise by the First Priority Secured Parties of their rights set forth herein. Following the occurrence of the First Priority Obligations Payment Date, the Third Priority Representative, on behalf of itself and the other Third Priority Secured Parties, agrees that each of them shall take such actions as the Second Priority Representative shall request in connection with the exercise by the Second Priority Secured Parties of their rights set forth herein

       3.5 No Additional Rights For the Loan Parties Hereunder. Except as provided in Section 3.6, if any First Priority Secured Party, Second Priority Secured Party or Third Priority Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, no Loan Party shall be entitled to use such violation as a defense to any action by any First Priority Secured Party, Second Priority Secured Party or Third Priority Secured Party, nor to assert such violation as a counterclaim or basis for set off or recoupment against any First Priority Secured Party, Second Priority Secured Party or Third Priority Secured Party.

       3.6 Actions Upon Breach. (a) If any Second Priority Secured Party or Third Priority Secured Party, contrary to this Agreement, commences or participates in any action or proceeding against any Loan Party or the Common Collateral, such Loan Party, with the prior written consent of the First Priority Secured Representative (or, after the occurrence of the First Priority Obligations Payment Date, the Second Priority Secured Representative), may interpose as a defense or dilatory plea the making of this Agreement, and any First Priority Secured Party (or, after the occurrence of the First Priority Obligations Payment Date, any Second Priority Secured Party) may intervene and interpose such defense or plea in its or their name or in the name of such Loan Party.

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     (b) Should any Second Priority Secured Party or Third Priority Secured Party, contrary to this Agreement, in any way take, attempt to or threaten to take any action with respect to the Common Collateral (including, without limitation, any attempt to realize upon or enforce any remedy with respect to this Agreement), or fail to take any action required by this Agreement, any First Priority Secured Party or, following the occurrence of the First Priority Obligations Payment Date, any Second Priority Secured Party (in each case in its own name or in the name of the relevant Loan Party) or the relevant Loan Party may obtain relief against such Second Priority Secured Party or Third Priority Secured Party by injunction, specific performance and/or other appropriate equitable relief, it being understood and agreed by the Second Priority Representative on behalf of each Second Priority Secured Party and the Third Priority Representative on behalf of each Third Priority Secured Party that (i) the First Priority Secured Parties’ and (following the occurrence of the First Priority Obligations Payment Date) Second Priority Secured Parties’ damages from its actions may at that time be difficult to ascertain and may be irreparable, and (ii) each Second Priority Secured Party and Third Priority Secured Party waives any defense that the Loan Parties and/or the First Priority Secured Parties or (following the occurrence of the First Priority Obligations Payment Date) Second Priority Secured Parties cannot demonstrate damage and/or be made whole by the awarding of damages.

     3.7 Rights of Junior Secured Parties. Notwithstanding anything in this Article 3, the Second Priority Representative and any Second Priority Secured Party, and the Third Priority Representative and any Third Priority Secured Party, may: (i) file a claim, proof of claim or statement of interest with respect to the Second Priority Obligations or Third Priority Obligations, respectively, provided that an Insolvency Proceeding has been commenced by or against any Loan Party; (ii) take any action not adverse to the priority status of the Liens on the Common Collateral securing the First Priority Obligations or the Second Priority Obligations, respectively, or the rights of the First Priority Representative or the First Priority Secured Parties or the Second Priority Representative or the Second Priority Secured Parties to exercise remedies in respect thereof in accordance with the terms of this Agreement, in order to create, perfect, preserve or protect their respective Liens on the Common Collateral; or (iii) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims of the Second Priority Representative or Second Priority Secured Parties, or the Third Priority Representative or Third Priority Secured Parties, respectively, including any claims secured by the Common Collateral, in each case in accordance with the terms of this Agreement.

     SECTION 4. Application Of Proceeds Of Common Collateral; Dispositions And Releases Of Common Collateral; Inspection and Insurance.

     4.1 Application of Proceeds; Turnover Provisions. All proceeds of Common Collateral (including without limitation any interest earned thereon) resulting from the sale, collection or other disposition of Common Collateral pursuant to an Enforcement Action, whether or not pursuant to an Insolvency Proceeding, shall be distributed as follows: first to the First Priority Representative for application to the First Priority Obligations in accordance with the terms of the First Priority Documents, until the First Priority Obligations Payment Date has occurred; second to the Second Priority Representative for application to the Second Priority Obligations in accordance with the terms of the Second Priority Documents, until the Second Priority Obligations Payment Date has occurred and thereafter, to the Third Priority Representative for application in accordance with the Third Priority Documents. Until the occurrence of the First Priority Obligations Payment Date, any Common Collateral, including without limitation any such Common Collateral constituting proceeds, that may be

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received by any Second Priority Secured Party or Third Priority Secured Party in violation of this Agreement (other than payments of Second Priority Obligations or Third Priority Obligations received, respectively, by the Second Priority Representative or Third Priority Representative in the ordinary course of business, without notice of being received in violation of this agreement, and distributed to the Second Priority Secured Parties or Third Priority Secured Parties entitled to receive such payments made in the ordinary course) shall be segregated and held in trust and promptly paid over to the First Priority Representative, for the benefit of the First Priority Secured Parties, in the same form as received, with any necessary endorsements, and each Second Priority Secured Party and Third Priority Secured Party hereby authorizes the First Priority Representative to make any such endorsements as agent for the Second Priority Representative and the Third Priority Representative (which authorization, being coupled with an interest, is irrevocable). After the occurrence of the First Priority Obligations Payment Date and until the occurrence of the First Priority Obligations Payment Date, any Common Collateral, including without limitation any such Common Collateral constituting proceeds, that may be received by any Third Priority Secured Party in violation of this Agreement shall be segregated and held in trust and promptly paid over to the Second Priority Representative, for the benefit of the Second Priority Secured Parties, in the same form as received, with any necessary endorsements, and each Third Priority Secured Party hereby authorizes the Second Priority Representative to make any such endorsements as agent for the Third Priority Representative (which authorization, being coupled with an interest, is irrevocable).

     4.2 Releases of Second Priority Lien and Third Priority Lien. (a) Upon any release, sale or disposition of Common Collateral permitted pursuant to the terms of the First Priority Documents that results in the release of the First Priority Lien on any Common Collateral (excluding any sale or other disposition that is expressly prohibited by the Second Priority Agreement or the Third Priority Agreement unless such sale or disposition is consummated in connection with an Enforcement Action or consummated after the institution of any Insolvency Proceeding), the Second Priority Lien and the Third Priority Lien on such Common Collateral (excluding any portion of the proceeds of such Common Collateral remaining after the First Priority Obligations Payment Date occurs) shall be automatically and unconditionally released with no further consent or action of any Person; provided, however, that if the total amount of outstanding First Priority Obligations plus the amount of any unfunded commitments then outstanding with respect to the First Priority Agreement is (or would become in connection with such release, sale or disposition) less than $20,000,000.00, any such release must be consented to by the Second Priority Representative.

     (b) The Second Priority Representative and the Third Priority Representative shall promptly execute and deliver such release documents and instruments and shall take such further actions as the First Priority Representative shall request to evidence any release of the Second Priority Lien and the Third Priority Lien described in paragraph (a). The Second Priority Representative and the Third Priority Representative hereby appoint the First Priority Representative and any officer or duly authorized person of the First Priority Representative, with full power of substitution, as their true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of the Second Priority Representative and the Third Priority Representative and in the name of the Second Priority Representative and the Third Priority Representative or in the First Priority Representative’s own name, from time to time, in the First Priority Representative’s sole discretion, for the purposes of carrying out the terms of this Section 4.2, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this Section 4.2, including, without limitation, any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable).

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     (c) After the occurrence of the First Priority Obligations Payment Date, upon any release, sale or disposition of Common Collateral permitted pursuant to the terms of the Second Priority Documents that results in the release of the Second Priority Lien on any Common Collateral (excluding any sale or other disposition that is expressly prohibited by the Third Priority Agreement unless such sale or disposition is consummated in connection with an Enforcement Action or consummated after the institution of any Insolvency Proceeding), the Third Priority Lien on such Common Collateral (excluding any portion of the proceeds of such Common Collateral remaining after the Second Priority Obligations Payment Date occurs) shall be automatically and unconditionally released with no further consent or action of any Person.

     (d) The Third Priority Representative shall promptly execute and deliver such release documents and instruments and shall take such further actions as the Second Priority Representative shall request to evidence any release of the Third Priority Lien described in paragraph (c). The Third Priority Representative hereby appoints the Second Priority Representative and any officer or duly authorized person of the Second Priority Representative, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of the Third Priority Representative and in the name of the Third Priority Representative or in the Second Priority Representative’s own name, from time to time, in the Second Priority Representative’s sole discretion, for the purposes of carrying out the terms of this Section 4.2, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this Section 4.2, including, without limitation, any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable).

     4.3 Inspection Rights and Insurance. (a) Any First Priority Secured Party and its representatives and invitees may at any time inspect, repossess, remove and otherwise deal with the Common Collateral, and the First Priority Representative may advertise and conduct public auctions or private sales of the Common Collateral, in each case without notice to, the involvement of or interference by any Second Priority Secured Party or Third Priority Secured Party or liability to any Second Priority Secured Party or Third Priority Secured Party. Following the occurrence of the First Priority Obligations Payment Date, any Second Priority Secured Party and its representatives and invitees may at any time inspect, repossess, remove and otherwise deal with the Common Collateral, and the Second Priority Representative may advertise and conduct public auctions or private sales of the Common Collateral, in each case without notice to, the involvement of or interference by any Third Priority Secured Party or liability to any Third Priority Secured Party.

     (b) Until the First Priority Obligations Payment Date has occurred, the First Priority Representative will have the sole and exclusive right (i) to be named as additional insured and loss payee under any insurance policies maintained from time to time by any Loan Party (except that the Second Priority Representative and the Third Priority Representative shall have the right to be named as additional insureds and loss payees so long as their second and third lien status, respectively, is identified in a manner satisfactory to the First Priority Representative); (ii) as between the Secured Parties, to adjust or settle any insurance policy or claim covering the Common Collateral in the event of any loss thereunder and (iii) as between the Secured Parties, to approve any award granted in any condemnation or similar proceeding affecting the Common Collateral. Following the occurrence of the First Priority Obligations Payment Date and until the Second Priority Obligations Payment Date has occurred, the Second Priority Representative will have the sole and exclusive right (i) to be named as additional insured

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and loss payee under any insurance policies maintained from time to time by any Loan Party (except that the Third Priority Representative shall have the right to be named as additional insured and loss payee so long as its third lien status is identified in a manner satisfactory to the Second Priority Representative); (ii) as between the Secured Parties, to adjust or settle any insurance policy or claim covering the Common Collateral in the event of any loss thereunder and (iii) as between the Secured Parties, to approve any award granted in any condemnation or similar proceeding affecting the Common Collateral.

     SECTION 5. Insolvency Proceedings.

     5.1 Filing of Motions. (a) Until the First Priority Obligations Payment Date has occurred, the Second Priority Representative agrees on behalf of itself as a Second Priority Secured Party and the other Second Priority Secured Parties that no Second Priority Secured Party shall, and the Third Priority Representative agrees on behalf of itself and the other Third Priority Secured Parties that no Third Priority Secured Party shall, in or in connection with any Insolvency Proceeding, file any pleadings or motions, take any position at any hearing or proceeding of any nature, or otherwise take any action whatsoever, in each case in respect of any of the Common Collateral, including, without limitation, with respect to the determination of any Liens or claims held by the First Priority Representative (including the validity and enforceability thereof) or any other First Priority Secured Party or the value of any claims of such parties under Section 506(a) of the Bankruptcy Code or otherwise in each such case if such action is inconsistent with the terms and limitations on the Second Priority Representative and the Third Priority Representative imposed hereby; provided that the Second Priority Representative and the Third Priority Representative may file proof of claims in an Insolvency Proceeding, subject to the limitations contained in this Agreement and only if consistent with the terms and the limitations on the Second Priority Representative and the Third Priority Representative imposed hereby.

     (b) Until the Second Priority Obligations Payment Date has occurred, the Third Priority Representative agrees on behalf of itself and the other Third Priority Secured Parties that no Third Priority Secured Party shall, in or in connection with any Insolvency Proceeding, file any pleadings or motions, take any position at any hearing or proceeding of any nature, or otherwise take any action whatsoever, in each case in respect of any of the Common Collateral, including, without limitation, with respect to the determination of any Liens or claims held by the Second Priority Representative (including the validity and enforceability thereof) or any other First Priority Secured Party or the value of any claims of such parties under Section 506(a) of the Bankruptcy Code or otherwise; provided that the Third Priority Representative may file proof of claims in an Insolvency Proceeding, subject to the limitations contained in this Agreement and only if consistent with the terms and the limitations on the Third Priority Representative imposed hereby.

     5.2 Financing Matters. If any Loan Party becomes subject to any Insolvency Proceeding, and if the First Priority Representative or the other First Priority Secured Parties desire to consent (or not object) to the use of cash collateral under the Bankruptcy Code or to provide financing to any Loan Party under the Bankruptcy Code or to consent (or not object) to the provision of such financing to any Loan Party by any third party (any such financing, “DIP Financing”), then the Second Priority Representative agrees, on behalf of itself as a Second Priority Secured Party and the other Second Priority Secured Parties, and the Third Priority Representative agrees, on behalf of itself and the other Third Priority Secured Parties, that each Second Priority Secured Party and Third Priority Secured Party (a) will be deemed to have consented to, will raise no objection to, nor support any other Person objecting to, the use of such cash collateral or to such DIP Financing, (b) will not request or accept adequate protection or any

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other relief in connection with the use of such cash collateral or such DIP Financing except as set forth in paragraph 5.4 below and (c) will subordinate (and will be deemed hereunder to have subordinated) the Second Priority Liens and the Third Priority Liens (i) to such DIP Financing on the same terms as the First Priority Liens are subordinated thereto (and such subordination will not alter in any manner the terms of this Agreement), (ii) to any adequate protection provided to the First Priority Secured Parties and (iii) to any “carve-out” agreed to by the First Priority Representative or the other First Priority Secured Parties, and (d) agrees that notice received two calendar days prior to the entry of an order approving such usage of cash collateral or approving such financing shall be adequate notice; provided, however, that (1) the total principal amount available under such DIP Financing, when added to the total amount of outstanding principal under the First Priority Agreement at the time of such DIP Financing shall not exceed 110% of what the total amount of outstanding principal under the First Priority Agreement was on the date of commencement of such Insolvency Proceeding, and (2) the terms of such DIP Financing or cash collateral use order (A) do not compel the applicable Loan Party to seek confirmation of a specific plan of reorganization for which all or substantially all of the material terms are set forth in the DIP Financing documentation or a related document and (B) do not expressly require the liquidation of the Common Collateral prior to a default under the DIP Financing documentation or cash collateral use order.

     5.3 Relief From the Automatic Stay. The Second Priority Representative agrees, on behalf of itself as a Second Priority Secured Party and the other Second Priority Secured Parties, that none of them will seek relief from the automatic stay or from any other stay in any Insolvency Proceeding or take any action in derogation thereof, in each case in respect of any Common Collateral, without the prior written consent of the First Priority Representative. The Third Priority Representative agrees, on behalf of itself and the other Third Priority Secured Parties, that none of them will seek relief from the automatic stay or from any other stay in any Insolvency Proceeding or take any action in derogation thereof, in each case in respect of any Common Collateral, without the prior written consent of the First Priority Representative and the Second Priority Representative.

     5.4 Adequate Protection. (a) The Second Priority Representative, on behalf of itself as a Second Priority Secured Party and the other Second Priority Secured Parties, and the Third Priority Representative, on behalf of itself and the other Third Priority Secured Parties, agree that none of them shall object, contest, or support any other Person objecting to or contesting, (1) any request by the First Priority Representative or the other First Priority Secured Parties for adequate protection or any adequate protection provided to the First Priority Representative or the other First Priority Secured Parties or (2) any objection by the First Priority Representative or any other First Priority Secured Parties to any motion, relief, action or proceeding based on a claim of a lack of adequate protection or (3) the payment of interest, fees, expenses or other amounts to the First Priority Representative or any other First Priority Secured Party under Section 506(b) or 506(c) of the Bankruptcy Code or otherwise. Notwithstanding anything contained in this Section and in Section 5.2(b) (but subject to all other provisions of this Agreement, including, without limitation, Sections 5.2(a) and 5.3), in any Insolvency Proceeding, (i) if the First Priority Secured Parties (or any subset thereof) are granted adequate protection consisting of additional collateral (with replacement liens on such additional collateral) and superpriority claims in connection with any DIP Financing or use of cash collateral, and the First Priority Secured Parties do not object to the adequate protection being provided to them, then in connection with any such DIP Financing or use of cash collateral the Second Priority Representative, on behalf of itself and any of the Second Priority Secured Parties, and the Third Priority Representative, on behalf of itself and any of the Third Priority Secured Parties, may seek or accept adequate protection consisting solely of (x) a replacement Lien on the same additional collateral, subordinated to the Liens securing the First Priority Obligations

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and such DIP Financing on the same basis as the other Liens securing the Second Priority Obligations and Third Priority Obligations are so subordinated to the First Priority Obligations under this Agreement and (y) superpriority claims junior in all respects to the superpriority claims granted to the First Priority Secured Parties, provided, however, that the Second Priority Representative and the Third Priority Representative shall have irrevocably agreed, pursuant to Section 1129(a)(9) of the Bankruptcy Code, on behalf of themselves as Secured Parties and the Second Priority Secured Parties and the Third Priority Secured Parties, in any stipulation and/or order granting such adequate protection, that such junior superpriority claims may be paid under any plan of reorganization in any combination of cash, debt, equity or other property having a value on the effective date of such plan equal to the allowed amount of such claims and (ii) in the event the Second Priority Representative, on behalf of itself as a Second Priority Secured Party and the Second Priority Secured Parties, or the Third Priority Representative, on behalf of itself and the Third Priority Secured Parties, seek or accept adequate protection in accordance with clause (i) above and such adequate protection is granted in the form of additional collateral, then the Second Priority Representative, on behalf of itself as a Second Priority Secured Party or any of the Second Priority Secured Parties, and the Third Priority Representative, on behalf of itself and the Third Priority Secured Parties, agree that the First Priority Representative shall also be granted a senior Lien on such additional collateral as security for the First Priority Obligations and any such DIP Financing and that any Lien on such additional collateral securing the Second Priority Obligations and/or the Third Priority Obligations shall be subordinated to the Liens on such collateral securing the First Priority Obligations and any such DIP Financing (and all Obligations relating thereto) and any other Liens granted to the First Priority Secured Parties as adequate protection, with such subordination to be on the same terms that the other Liens securing the Second Priority Obligations and/or the Third Priority Obligations are subordinated to such First Priority Obligations under this Agreement. The Second Priority Representative, on behalf of itself as a Second Priority Secured Party and the other Second Priority Secured Parties, and the Third Priority Representative, on behalf of itself and the other Third Priority Secured Parties, agree that except as expressly set forth in this Section none of them shall seek or accept adequate protection without the prior written consent of the First Priority Representative.

     (b) The Third Priority Representative, on behalf of itself and the other Third Priority Secured Parties, agrees that none of them shall object, contest, or support any other Person objecting to or contesting, (1) any request by the Second Priority Representative or the other Second Priority Secured Parties for adequate protection or any adequate protection provided to the Second Priority Representative or the other Second Priority Secured Parties or (2) any objection by the Second Priority Representative or any other Second Priority Secured Parties to any motion, relief, action or proceeding based on a claim of a lack of adequate protection or (3) the payment of interest, fees, expenses or other amounts to the Second Priority Representative or any other Second Priority Secured Party under Section 506(b) or 506(c) of the Bankruptcy Code or otherwise. Notwithstanding anything contained in this Section and in Section 5.2(b) (but subject to all other provisions of this Agreement, including, without limitation, Sections 5.2(a) and 5.3), in any Insolvency Proceeding, (i) if the Second Priority Secured Parties (or any subset thereof) are granted adequate protection consisting of additional collateral (with replacement liens on such additional collateral) and superpriority claims in connection with any DIP Financing or use of cash collateral, and the Second Priority Secured Parties do not object to the adequate protection being provided to them, then in connection with any such DIP Financing or use of cash collateral the Third Priority Representative, on behalf of itself and any of the Third Priority Secured Parties, may seek or accept adequate protection consisting solely of (x) a replacement Lien on the same additional collateral, subordinated to the Liens securing the Second Priority Obligations and such DIP Financing on the same basis as the other Liens securing the Third Priority Obligations are so subordinated to the Second Priority Obligations under this

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Agreement and (y) superpriority claims junior in all respects to the superpriority claims granted to the Second Priority Secured Parties, provided, however, that the Third Priority Representative shall have irrevocably agreed, pursuant to Section 1129(a)(9) of the Bankruptcy Code, on behalf of itself and the Third Priority Secured Parties, in any stipulation and/or order granting such adequate protection, that such junior superpriority claims may be paid under any plan of reorganization in any combination of cash, debt, equity or other property having a value on the effective date of such plan equal to the allowed amount of such claims and (ii) in the event the Third Priority Representative, on behalf of itself and the Third Priority Secured Parties, seeks or accepts adequate protection in accordance with clause (i) above and such adequate protection is granted in the form of additional collateral, then the Third Priority Representative, on behalf of itself and the Third Priority Secured Parties, agrees that the Second Priority Representative shall also be granted a senior Lien on such additional collateral as security for the Second Priority Obligations and any such DIP Financing and that any Lien on such additional collateral securing the Third Priority Obligations shall be subordinated to the Liens on such collateral securing the Second Priority Obligations and any such DIP Financing (and all Obligations relating thereto) and any other Liens granted to the Second Priority Secured Parties as adequate protection, with such subordination to be on the same terms that the other Liens securing the Third Priority Obligations are subordinated to such Second Priority Obligations under this Agreement. The Third Priority Representative, on behalf of itself and the other Third Priority Secured Parties, agrees that except as expressly set forth in this Section none of them shall seek or accept adequate protection without the prior written consent of the Second Priority Representative. .

     (c) Nothing contained herein shall be deemed to prevent the Second Priority Representative, any Second Priority Secured Party, the Third Priority Representative or any Third Priority Secured Party from making any application in any Insolvency Proceeding to receive cash payment of post-petition interest, expenses or fees at any point during the Insolvency Proceeding.

     5.5 Avoidance Issues. (a) If any First Priority Secured Party is required in any Insolvency Proceeding or otherwise to disgorge, turn over or otherwise pay to the estate of any Loan Party, because such amount was avoided or ordered to be paid or disgorged for any reason, including without limitation because it was found to be a fraudulent or preferential transfer, any amount (a “First Priority Recovery”), whether received as proceeds of security, enforcement of any right of set-off or otherwise, then the First Priority Obligations shall be reinstated to the extent of such First Priority Recovery and deemed to be outstanding as if such payment had not occurred and the First Priority Obligations Payment Date shall be deemed not to have occurred. If this Agreement shall have been terminated prior to such First Priority Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto. The Second Priority Secured Parties and the Third Priority Secured Parties agree that none of them shall be entitled to benefit from any avoidance action affecting or otherwise relating to any distribution or allocation made in accordance with this Agreement, whether by preference or otherwise, it being understood and agreed that the benefit of such avoidance action otherwise allocable to them shall instead be allocated and turned over for application in accordance with the priorities set forth in this Agreement.

     (b) If any Second Priority Secured Party is required in any Insolvency Proceeding or otherwise to disgorge, turn over or otherwise pay to the estate of any Loan Party, because such amount was avoided or ordered to be paid or disgorged for any reason, including without limitation because it was found to be a fraudulent or preferential transfer, any amount (a “Second Priority Recovery”), whether received as

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proceeds of security, enforcement of any right of set-off or otherwise, then the Second Priority Obligations shall be reinstated to the extent of such Second Priority Recovery and deemed to be outstanding as if such payment had not occurred and the Second Priority Obligations Payment Date shall be deemed not to have occurred. If this Agreement shall have been terminated prior to such Second Priority Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto. The Third Priority Secured Parties agree that none of them shall be entitled to benefit from any avoidance action affecting or otherwise relating to any distribution or allocation made in accordance with this Agreement, whether by preference or otherwise, it being understood and agreed that the benefit of such avoidance action otherwise allocable to them shall instead be allocated and turned over for application in accordance with the priorities set forth in this Agreement.

     5.6 Asset Dispositions in an Insolvency Proceeding. (a) None of the Second Priority Representative, the Third Priority Representative, any other Second Priority Secured Party nor any other Third Priority Secured Party shall, in an Insolvency Proceeding or otherwise, oppose any sale or disposition of any assets of any Loan Party that is supported by the First Priority Secured Parties, and the Second Priority Representative, the Third Priority Secured Party and each other Second Priority Secured Party and Third Priority Secured Party will be deemed to have consented under Section 363 of the Bankruptcy Code (and otherwise) to any sale supported by the First Priority Secured Parties and to have released their Liens on such assets, provided, however, that the Lien of the Second Priority Representative, the Third Priority Representative and each other Second Priority Secured Party and Third Priority Secured Party shall continue in the proceeds of any such sale or disposition, which Lien shall be governed by the terms of this Agreement; and provided further, that that if the total amount of outstanding First Priority Obligations plus the amount of any unfunded commitments then outstanding with respect to the First Priority Agreement is (or would become in connection with such sale or disposition) less than $20,000,000.00, any such release must be consented to by the Second Priority Representative.

     (b) Neither the Third Priority Representative nor any other Third Priority Secured Party shall, in an Insolvency Proceeding or otherwise, oppose any sale or disposition of any assets of any Loan Party that is supported by the Second Priority Secured Parties, and the Third Priority Representative and each other Third Priority Secured Party will be deemed to have consented under Section 363 of the Bankruptcy Code (and otherwise) to any sale supported by the Second Priority Secured Parties and to have released their Liens on such assets, provided, however, that the Lien of the Third Priority Representative and each other Third Priority Secured Party shall continue in the proceeds of any such sale or disposition, which Lien shall be governed by the terms of this Agreement.

     5.7 Separate Grants of Security and Separate Classification. Each Second Priority Secured Party and Third Priority Secured Party acknowledges and agrees that (a) the grants of Liens pursuant to the First Priority Security Documents, the Second Priority Security Documents and the Third Priority Security Documents constitute three separate and distinct grants of Liens and (b) because of, among other things, their differing rights in the Common Collateral, the First Priority Obligations, the Second Priority Obligations and the Third Priority Obligations are each fundamentally different from each other and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the First Priority Secured Parties, Second Priority Secured Parties and Third Priority Secured Parties in respect of the Common Collateral constitute only one secured claim (rather than three separate classes of first, second and third priority secured claims), then the Second Priority

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Secured Parties and Third Priority Secured Parties hereby acknowledge and agree that all distributions shall be made as if there were three separate classes of first, second and third priority secured claims against the Loan Parties in respect of the Common Collateral (with the effect being that, to the extent that the aggregate value of the Common Collateral is sufficient (for this purpose ignoring all claims held by the Second Priority Secured Parties and the Third Priority Secured Parties), (i) the First Priority Secured Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of Post-Petition Interest before any distribution is made in respect of the claims held by the Second Secured Priority Secured Parties and the Third Priority Secured Parties, with the Second Priority Secured Parties and Third Priority Secured Parties hereby acknowledging and agreeing to turn over to the First Priority Secured Parties amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Second Priority Secured Parties and Third Priority Secured Parties; and (ii) following the application of clause (i) hereto, the Second Priority Secured Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of Post-Petition Interest before any distribution is made in respect of the claims held by the Third Priority Secured Parties, with the Third Priority Secured Parties hereby acknowledging and agreeing to turn over to the Second Priority Secured Parties amounts otherwise received or receivable by them to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Third Priority Secured Parties.

     5.8 No Waivers of Rights of First Priority Secured Parties and Second Priority Secured Parties. Nothing contained herein shall prohibit or in any way limit the First Priority Representative or any other First Priority Secured Party from objecting in any Insolvency Proceeding or otherwise to any action taken by any Second Priority Secured Party or Third Priority Secured Party, including the seeking by any Second Priority Secured Party or Third Priority Secured Party of adequate protection (except as provided in Section 5.4) or the asserting by any Second Priority Secured Party or Third Priority Secured Party of any of its rights and remedies under the Second Priority Documents, the Third Priority Documents or otherwise, or limit the Second Priority Representative or any other Second Priority Secured Party from objecting in any Insolvency Proceeding or otherwise to any action taken by any Third Priority Secured Party, including the seeking by any Third Priority Secured Party of adequate protection (except as provided in Section 5.4) or the asserting by any Third Priority Secured Party of any of its rights and remedies under the Third Priority Documents or otherwise.

     5.9 Other Matters. (a) To the extent that the Second Priority Representative as a Second Priority Secured Party or any Second Priority Secured Party, or the Third Priority Representative or any Third Priority Secured Party, has or acquires rights under Section 363 or Section 364 of the Bankruptcy Code with respect to any of the Common Collateral, the Second Priority Representative agrees, on behalf of itself and the other Second Priority Secured Parties, and the Third Priority Representative agrees, on behalf of itself and the other Third Priority Secured Parties, not to assert any of such rights without the prior written consent of the First Priority Representative; provided that if requested by the First Priority Representative, the Second Priority Representative and/or the Third Priority Representative shall timely exercise such rights in the manner requested by the First Priority Representative, including any rights to payments in respect of such rights.

     (b) To the extent that the Third Priority Representative or any Third Priority Secured Party has or acquires rights under Section 363 or Section 364 of the Bankruptcy Code with respect to any of the

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Common Collateral, the Third Priority Representative agrees, on behalf of itself and the other Third Priority Secured Parties not to assert any of such rights without the prior written consent of the Second Priority Representative; provided that if requested by the Second Priority Representative, the Third Priority Representative shall timely exercise such rights in the manner requested by the Second Priority Representative, including any rights to payments in respect of such rights.

     5.10 Effectiveness in Insolvency Proceedings. This Agreement, which the parties hereto expressly acknowledge is a “subordination agreement” under section 510(a) of the Bankruptcy Code, shall be effective before, during and after the commencement of an Insolvency Proceeding.

     SECTION 6. Second Priority Documents and First Priority Documents.

     (a) Each Loan Party and the Second Priority Representative, on behalf of itself and the Second Priority Secured Parties, agrees that it shall not at any time execute or deliver any amendment or other modification to any of the Second Priority Documents in violation of this Agreement.

     (b) Each Loan Party and the First Priority Representative, on behalf of itself and the First Priority Secured Parties, agrees that it shall not at any time execute or deliver any amendment or other modification to any of the First Priority Documents in violation of this Agreement.

     (c) Each Loan Party and the Third Priority Representative, on behalf of itself and the Third Priority Secured Parties, agrees that it shall not at any time execute or deliver any amendment or other modification to any of the Third Priority Documents in violation of this Agreement.

     SECTION 7 . Reliance; Waivers; etc.

     7.1 Reliance. The First Priority Documents are deemed to have been executed and delivered, and all extensions of credit thereunder are deemed to have been made or incurred, in reliance upon this Agreement. The Second Priority Representative, on behalf of itself as a Second Priority Secured Party and the Second Priority Secured Parties, and the Third Priority Representative, on behalf of itself and the Third Priority Secured Parties, expressly waive all notice of the acceptance of and reliance on this Agreement by the First Priority Representative and the First Priority Secured Parties. The Second Priority Documents are deemed to have been executed and delivered and all extensions of credit thereunder are deemed to have been made or incurred, in reliance upon this Agreement. The First Priority Representative, on behalf of itself and the First Priority Secured Parties, and the Third Priority Representative, on behalf of itself and the Third Priority Secured Parties, expressly waive all notices of the acceptance of and reliance by the Second Priority Representative and the Second Priority Secured Parties. The Third Priority Documents are deemed to have been executed and delivered and all extensions of credit thereunder are deemed to have been made or incurred, in reliance upon this Agreement. The First Priority Representative, on behalf of itself and the First Priority Secured Parties, and the Second Priority Representative, on behalf of itself and the Second Priority Secured Parties, expressly waive all notices of the acceptance of and reliance by the Third Priority Representative and the Third Priority Secured Parties.

     7.2 No Warranties or Liability. The Third Priority Representative, the Second Priority Representative and the First Priority Representative acknowledge and agree that neither has made any representation or warranty with respect to the execution, validity, legality, completeness, collectibility or

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enforceability of any other First Priority Document, any other Second Priority Document or any other Third Priority Document. Except as otherwise provided in this Agreement, the Third Priority Representative, the Second Priority Representative and the First Priority Representative will be entitled to manage and supervise their respective extensions of credit to any Loan Party in accordance with law and their usual practices, modified from time to time as they deem appropriate.

     7.3 No Waivers. No right or benefit of any party hereunder shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of such party or any other party hereto or by any noncompliance by any Loan Party with the terms and conditions of any of the First Priority Documents, the Second Priority Documents or the Third Priority Documents.

     SECTION 8. Obligations Unconditional.

     8.1 First Priority Obligations Unconditional. All rights and interests of the First Priority Secured Parties hereunder, and all agreements and obligations of the Second Priority Secured Parties and the Third Priority Secured Parties (and, to the extent applicable, the Loan Parties) hereunder, shall remain in full force and effect irrespective of:

     (a) any lack of validity or enforceability of any First Priority Document;

     (b) any change in the time, place or manner of payment of, or in any other term of, all or any portion of the First Priority Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any First Priority Document;

     (c) prior to the First Priority Obligations Payment Date, any exchange, release, voiding, avoidance or non-perfection of any security interest in any Common Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of all or any portion of the First Priority Obligations or any guarantee or guaranty thereof; or

     (d) any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the First Priority Obligations, or of any of the Second Priority Representative, the Third Priority Representative, or any Loan Party, to the extent applicable, in respect of this Agreement.

     8.2 Second Priority Obligations Unconditional. All rights and interests of the Second Priority Secured Parties hereunder, and all agreements and obligations of the First Priority Secured Parties and the Third Priority Secured Parties (and, to the extent applicable, the Loan Parties) hereunder, shall remain in full force and effect irrespective of:

     (a) any lack of validity or enforceability of any Second Priority Document;

     (b) any change in the time, place or manner of payment of, or in any other term of, all or any portion of the Second Priority Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any Second Priority Document;

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     (c) any exchange, release, voiding, avoidance or non-perfection of any security interest in any Common Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of all or any portion of the Second Priority Obligations or any guarantee or guaranty thereof; or

     (d) any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the Second Priority Obligations or any First Priority Secured Party or Third Priority Secured Party in respect of this Agreement.

     8.3 Third Priority Obligations Unconditional. All rights and interests of the Third Priority Secured Parties hereunder, and all agreements and obligations of the First Priority Secured Parties and the Second Priority Secured Parties (and, to the extent applicable, the Loan Parties) hereunder, shall remain in full force and effect irrespective of:

     (a) any lack of validity or enforceability of any Third Priority Document;

     (b) any change in the time, place or manner of payment of, or in any other term of, all or any portion of the Third Priority Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any Third Priority Document;

     (c) any exchange, release, voiding, avoidance or non-perfection of any security interest in any Common Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of all or any portion of the Third Priority Obligations or any guarantee or guaranty thereof; or

     (d) any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the Third Priority Obligations or any First Priority Secured Party or Second Priority Secured Party in respect of this Agreement.

     SECTION 9. Purchase Option.

     9.1 Purchase Notice. Upon (i) notice by the First Priority Representative (a “Trigger Notice”) to the Second Priority Representative, which notice shall be delivered not less than 10 business days prior to the earlier to occur of (a) the acceleration of the First Priority Obligations in accordance with the terms of the First Priority Documents, or (b) the commencement of an Enforcement Action by the First Priority Representative or any First Priority Secured Party, or, if earlier (ii) the occurrence of any event described in clauses (i)(a) or (i)(b) above (a “Trigger Event”), Holders of the Second Priority Obligations participating in such a purchase shall have the option, at any time upon ten (10) business days’ prior written notice to the First Priority Representative on behalf of the First Priority Creditors (the “Purchase Notice”) to purchase all of the First Priority Obligations from the First Priority Creditors pursuant to the assignment provisions contained in the First Priority Agreement. The Purchase Notice shall be irrevocable. Any number of the Holders of the Second Priority Obligations agreeing as a group to purchase the entire aggregate may exercise such purchase option. For the avoidance of doubt, each Holder of Second Priority Obligations shall have the option to purchase up to such Holder’s pro rate share

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(such pro rate share based on those Holders of Second Priority Obligations participating in such purchase) and this right may be exercised by any number of Holders of Second Priority Obligations to purchase the entire aggregate amount of the outstanding First Priority Obligations. If such Holders of Second Priority Obligations exercise such purchase option, it shall be exercised pursuant to documentation consistent with this Article 9 and otherwise mutually acceptable to each of the First Priority Representative and such Holders.

     9.2 Cessation of Enforcement Action. The Second Priority Representative may send to the First Priority Representative on behalf of the First Priority Creditors the Purchase Notice referred to in Section 9.1 above within 10 business days of receipt of such Trigger Notice (or, if earlier, the occurrence of such Trigger Event), in which event, First Priority Representative and the First Priority Creditors shall not (a) accelerate any of the First Priority Obligations, (b) commence any Enforcement Action or (c) request that the Second Priority Representative release any Second Priority Lien, as the case may be, provided, that, the parties shall endeavor to use commercially reasonable means to close the sale of the First Priority Obligations to such Holders requesting such sale pursuant to Section 9.1 hereof, as promptly as possible thereafter and in no event later than 20 business days after receipt of the Purchase Notice.

     9.3 Sale. On the date of the consummation of the sale of First Priority Obligations to the Holders requesting such sale pursuant to Section 9.1 hereof, First Priority Creditors shall sell to such Holders, and such Holders shall purchase from First Priority Creditors, the First Priority Obligations, provided that, First Priority Creditors shall retain all rights to be indemnified or held harmless by Borrower and the other Loan Parties in accordance with the terms of the First Priority Agreement but shall not retain any rights to the security therefor.

     9.4 Purchase. Upon the date of such purchase and sale, Second Priority Creditors shall:

     (a) pay in cash to First Priority Representative on behalf of First Priority Creditors as the purchase price therefor the full amount of all the First Priority Obligations then outstanding and unpaid (including principal, interest, fees and expenses, including reasonable attorneys’ fees and legal expenses (including default interest)), if any;

     (b) furnish cash collateral to First Priority Representative in such amounts as First Priority Representative determines is reasonably necessary to secure First Priority Creditors in connection with any issued and outstanding letters of credit provided by First Priority Creditors (or letters of credit that First Priority Creditors have arranged to be provided by third parties pursuant to the financing arrangements of First Priority Creditors with Borrower or any other Loan Party) to Borrower or any Party (but not in any event in an amount greater than 105% of the aggregate undrawn face amount of such letters of credit), and

     (c) agree to reimburse on demand First Priority Creditors for any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) in connection with any commissions, fees, costs or expenses related to any issued and outstanding letters of credit as described above and any checks or other payments provisionally credited to the First Priority Obligations, and/or as to which any First Priority Creditor has not yet received final payment.

     Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account of First Priority Representative in New York, New York, as First Priority Representative

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may designate in writing to Second Priority Representative for such purpose. Interest shall be calculated to but excluding the business day on which such purchase and sale shall occur if the amounts so paid by the Holders requesting such sale pursuant to Section 9.1 hereof to the bank account designated by First Priority Representative are received in such bank account prior to 1:00 p.m., New York City time and interest shall be calculated to and including such business day if the amounts so paid by the Holders requesting such sale pursuant to Section 9.1 hereof to the bank account designated by First Lien Agent are received in such bank account later than 1:00 p.m., New York City time.

     9.5 Terms of Purchase. Such purchase shall be expressly made without representation or warranty of any kind by any First Priority Creditor as to the First Priority Obligations or otherwise and without recourse to any First Priority Creditor, except that each First Priority Creditor shall represent and warrant: (a) the amount of its portion of the First Priority Obligations being purchased, (b) that such First Priority Creditor owns its portion of the First Priority Obligations free and clear of any Liens or encumbrances and (c) such First Priority Creditor has the right and power to assign such First Priority Obligations and the assignment has been duly authorized by all necessary corporate action by such First Priority Creditor.

     SECTION 10. Miscellaneous.

     10.1 Conflicts. In the event of any conflict between the provisions of this Agreement and the provisions of any First Priority Document, any Second Priority Document or any Third Priority Document, the provisions of this Agreement shall govern.

     10.2 Continuing Nature of Provisions. This Agreement shall continue to be effective, and shall not be revocable by any party hereto, until the First Priority Obligations Payment Date and the Second Priority Obligations Payment Date shall have occurred. This is a continuing agreement and the First Priority Secured Parties, the Second Priority Secured Parties and the Third Priority Secured Parties may continue, at any time and without notice to the other parties hereto, to extend credit and other financial accommodations, lend monies and provide indebtedness to, or for the benefit of, Borrower or any other Loan Party on the faith hereof.

     10.3 Amendments; Waivers. (a) No amendment or modification of any of the provisions of this Agreement shall be effective unless the same shall be in writing and signed by the First Priority Representative, the Second Priority Representative and the Third Priority Representative, and, in the case of amendments or modifications that affects the rights or duties of, or imposes additional obligations or liabilities on, any Loan Party, such Loan Party.

     (b) It is understood that the First Priority Representative, the Second Priority Representative and the Third Priority Representative, without the consent of any other First Priority Secured Party, Second Priority Secured Party or Third Priority Secured Party, may in their discretion determine that a supplemental agreement (which make take the form of an amendment and restatement of this Agreement) is necessary or appropriate to facilitate having additional indebtedness or other obligations (“Additional Debt”) of any of the Loan Parties become First Priority Obligations, Second Priority Obligations or Third Priority Obligations, as the case may be, under this Agreement, which supplemental agreement shall specify whether such Additional Debt constitutes First Priority Obligations, Second Priority Obligations or Third Priority Obligations, provided, that such Additional Debt is permitted to be incurred by the First Priority Agreement, Second Priority Agreement and Third Priority Agreement then extant, and is

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permitted by said Agreements to be subject to the provisions of this Agreement as First Priority Obligations, Second Priority Obligations or Third Priority Obligations, as applicable.

     10.4 Information Concerning Financial Condition of the Borrower and the other Loan Parties. Each of the Third Priority Representative, the Second Priority Representative and the First Priority Representative hereby assume responsibility for keeping itself informed of the financial condition of the Borrower and each of the other Loan Parties and all other circumstances bearing upon the risk of nonpayment of the First Priority Obligations, the Second Priority Obligations or the Third Priority Obligations. The Third Priority Representative, the Second Priority Representative and the First Priority Representative hereby agree that no party shall have any duty to advise any other party of information known to it regarding such condition or any such circumstances. In the event the Third Priority Representative, the Second Priority Representative or the First Priority Representative, in its sole discretion, undertakes at any time or from time to time to provide any information to any other party to this Agreement, it shall be under no obligation (a) to provide any such information to such other party or any other party on any subsequent occasion, (b) to undertake any investigation not a part of its regular business routine, or (c) to disclose any other information.

     10.5 Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of New York, except as otherwise required by mandatory provisions of law and except to the extent that remedies provided by the laws of any jurisdiction other than the State of New York are governed by the laws of such jurisdiction.

     10.6 Submission to Jurisdiction. (a) Each First Priority Secured Party, each Second Priority Secured Party, each Third Priority Secured Party and each Loan Party hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each such party hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each such party agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the any First Priority Secured Party, Second Priority Secured Party or Third Priority Secured Party may otherwise have to bring any action or proceeding against any Loan Party or its properties in the courts of any jurisdiction.

     (b) Each First Priority Secured Party, each Second Priority Secured Party, each Third Priority Secured Party and each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so (i) any objection it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (a) of this Section and (ii) the defense of an inconvenient forum to the maintenance of such action or proceeding.

     (c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.7. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

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     10.7 Notices. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, or sent by overnight express courier service or United States mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or five days after deposit in the United States mail (certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section) shall be as set forth below each party’s name on the signature pages hereof, or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties.

     10.8 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and each of the First Priority Secured Parties, Second Priority Secured Parties and Third Priority Secured Parties and their respective successors and assigns, and nothing herein is intended, or shall be construed to give, any other Person any right, remedy or claim under, to or in respect of this Agreement or any Common Collateral.

     10.9 Headings. Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

     10.10 Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

     10.11 Other Remedies. For avoidance of doubt, it is understood that nothing in this Agreement shall prevent (i) any Second Priority Secured Party from exercising any available remedy to accelerate the maturity of any indebtedness or other obligations owing under the Second Priority Agreement or to demand payment under any guarantee in respect thereof, or (ii) any Third Priority Secured Party from exercising any available remedy to accelerate the maturity of any indebtedness or other obligations owing under the Third Priority Agreement or to demand payment under any guarantee in respect thereof.

     10.12 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement shall become effective when it shall have been executed by each party hereto.

     10.13 Additional Loan Parties. Each Person that becomes a Loan Party after the date hereof shall become a party to this Agreement upon execution and delivery by such Person of an Assumption Agreement in the form of Annex 1 to the Guarantee and Collateral Agreement referred to in the First Priority Agreement.

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     10.14 Rights as Unsecured Creditors. Notwithstanding anything to the contrary herein, it is understood and agreed that the Second Priority Secured Parties and the Third Priority Secured Parties may exercise rights and remedies as unsecured creditors.

     10.15 No Fiduciary Duties. None of the First Priority Representative, the Second Priority Representative or the Third Priority Representative shall have a fiduciary duty with any other Person with respect to any acts under this Agreement.

     10.16 Subordination Provisions. Each of the parties hereto recognizes and acknowledges that, pursuant to Article X of the Existing Third Priority Agreement, the Third Priority Obligations are subordinated in right of payment to the First Priority Obligations and the Second Priority Obligations, and the Third Priority Representative acknowledges that the First Priority Representative and the Second Priority Representative are third party beneficiaries to such subordination provisions and have the right to seek to enforce such provisions on behalf of the First Priority Secured Parties and the Second Priority Secured Parties, as applicable.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

JPMORGAN CHASE BANK, N.A., as First Priority Representative for and on behalf of the First Priority Secured Parties
By:	/s/ Geoff Benson
Name:	Geoff Benson
Title:	Vice President
Address for Notices:
Attention:
Telecopy No.:
THE BANK OF NEW YORK TRUST COMPANY, N.A., as Collateral Agent, as Second Priority Representative for and on behalf of the Second Priority Secured Parties
By:	/s/ Linda Garcia
Name:	Linda Garcia
Title:	Assistant Vice President
Address for Notices:
Attention:
Telecopy No.:
MERRILL LYNCH PCG, INC., as Third Priority Representative for and on behalf of the Third Priority Secured Parties
By:	/s/ Neven Viducis
Name:	Neven Viducis
Title:	Vice President
Address for Notices:
Attention:
Telecopy No.:

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LIBBEY GLASS INC.
By:	/s/ Susan A. Kovach
Name:	Susan A. Kovach
Title:	Vice President, General Counsel and Secretary
Address for Notices:
Attention:
Telecopy No.:
LIBBEY INC.
By:	/s/ Susan A. Kovach
Name:	Susan A. Kovach
Title:	Vice President, General Counsel and Secretary
Address for Notices:
Attention:
Telecopy No.:
LGA3 CORP.
By:	/s/ Susan A. Kovach
Name:	Susan A. Kovach
Title:	Vice President, General Counsel and Secretary
Address for Notices:
Attention:
Telecopy No.:
THE DRUMMOND GLASS COMPANY
By:	/s/ Susan A. Kovach
Name:	Susan A. Kovach
Title:	Vice President, General Counsel and Secretary
Address for Notices:

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Attention:
Telecopy No.:
LGA4 CORP.
By:	/s/ Susan A. Kovach
Name:	Susan A. Kovach
Title:	Vice President, General Counsel, and Secretary
Address for Notices:
Attention:
Telecopy No.:
SYRACUSE CHINA COMPANY
By:	/s/ Susan A. Kovach
Name:	Susan A. Kovach
Title:	Vice President, General Counsel, and Secretary
Address for Notices:
Attention:
Telecopy No.:
LGFS INC.
By:	/s/ Susan A. Kovach
Name:	Susan A. Kovach
Title:	Vice President, General Counsel, and Secretary
Address for Notices:
Attention:
Telecopy No.:

37

	WORLD TABLEWARE INC.
By:	/s/  Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel and Secretary
	Address for Notices:
	Attention:
	Telecopy No.:
	TRAEX COMPANY
By:	/s/  Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel and Secretary
	Address for Notices:
	Attention:
	Telecopy No.:
	LGC CORP.
By:	/s/  Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel and Secretary
	Address for Notices:
	Attention:
	Telecopy No.:
	LGAC LLC
By:	/s/  Susan A. Kovach
	Name:	Susan A. Kovach
	Title:	Vice President, General Counsel and Secretary
	Address for Notices:
	Attention:
	Telecopy No.:

38

Attention:
Telecopy No.:
LIBBEY.COM LLC
By:	/s/ Susan A. Kovach
Name:	Susan A. Kovach
Title:	Vice President, General Counsel, and Secretary
Address for Notices:
Attention:
Telecopy No.:
CRISA INDUSTRIAL, L.L.C.
By:	/s/ Susan A. Kovach
Name:	Susan A. Kovach
Title:	Vice President, General Counsel, and Secretary
Address for Notices:
Attention:
Telecopy No.:

EX-10.1

EXHIBIT 10.1

EXECUTION COPY

TRANSITION SERVICES AGREEMENT

          TRANSITION SERVICES AGREEMENT (this “Agreement”), dated June 16, 2006, among Crisa Libbey S.A. de C.V., a Mexican Sociedad Anónima de Capital Variable (“Crisa Libbey”), Vitrocrisa Holding, S. de R.L. de C.V., a Mexican Sociedad de Responsabilidad Limitada de Capital Variable (“VC Holding”), Vitrocrisa S. de R.L. de C.V., a Mexican Sociedad de Responsabilidad Limitada de Capital Variable (“Vitrocrisa”), Vitrocrisa Comercial, S. de R.L. de C.V., a Mexican Sociedad de Responsabilidad Limitada de Capital Variable (“VC Comercial”), Crisa Industrial, L.L.C., a Delaware limited liability company (“Crisa Industrial” and, collectively with Crisa Libbey, VC Holding, Vitrocrisa and VC Comercial, the “Acquired Companies” or the “Recipient”) and Vitro Corporativo, S.A. de C.V., a Mexican Sociedad Anónima de Capital Variable (“Vitro”). Each of Vitro and the Recipient is referred to sometimes in this Agreement as a “Party,” and Vitro and the Recipient are referred to collectively in this Agreement as the “Parties.”

          Unless otherwise defined herein, all capitalized terms have the meanings set forth in the Purchase Agreement (as defined below).

          WHEREAS, Vitro, S.A. de C.V., Crisa Corporation, a Delaware corporation (together with Vitro, “Sellers”), the Acquired Companies, Libbey Mexico, S. de R.L. de C.V., a Mexican Sociedad de Responsibilidad Limitada de Capital Variable (“Libbey Mexico”), Libbey Europe B.V., a limited liability company (besloten vennotschap met beperkte aansprakelijkheid) organized under the laws of the Netherlands (“Libbey Europe”) and LGA3 Corp., a Delaware corporation (“LGA3” and, together with Libbey Europe and Libbey Mexico, “Purchasers”) have entered into that certain Purchase Agreement, dated as of April 2, 2006, as amended on or prior to the date hereof (as amended, the “Purchase Agreement”), pursuant to which Sellers have agreed to sell to Purchasers, and Purchasers have agreed to buy from Sellers, all right, title and interest of Sellers in and to the Acquired Companies and certain related assets; and

          WHEREAS, the Purchase Agreement contemplates, from and after the Closing, that the Vitro Entities shall provide, or shall cause to be provided, certain transition services to the Acquired Companies.

          NOW, THEREFORE, in consideration of the foregoing and the mutual agreements and covenants set forth in this Agreement and the Purchase Agreement, and intending to be legally bound, the Parties agree as follows:

     1. Transition Services. Vitro shall provide, or use commercially reasonable efforts to cause to be provided by its vendors (as specified on Exhibit A), to the Recipient the services set forth on Exhibit A attached hereto and incorporated herein by reference (each a “Transition Service” and, collectively, the “Transition Services”) for the Term in accordance with this Agreement. Subject to the terms of the Purchase Agreement, Vitro shall perform, or, where set forth on Exhibit A, use commercially reasonable efforts to cause to be performed by its vendors, all services necessary for the performance of the Transition Services. For a period of three years from the Closing Date or such other shorter period as the Acquired Companies or Purchasers may indicate, Vitro shall cause the General Manager to allocate 80% of his time to the provision and performance of Transition Services and other such duties as the Acquired Companies, Purchasers or any of their Affiliates may determine pursuant to the terms and conditions set forth on Exhibit 1.01-I of the Purchase Agreement.

     2. Standard of Performance.

In all material respects, Vitro shall use, and shall use commercially reasonable efforts to cause its vendors to use, the same degree of diligence as Vitro or its vendor, as applicable, exercised in providing services to the Recipient during the 12-month period prior to the date hereof. The Transition Services shall be of the type and quality, and shall be provided at staffing levels and with timeliness, provided to the Acquired Companies during the 12-month period prior to the date hereof, provided that: (a) to the extent a Transition Service was not provided to the Recipient during the 12-month period prior to the date hereof, the Transition Service shall be of the type and quality, and shall be provided at staffing levels and with timeliness, consistent with the provision of similar services to Vitro or its Affiliates during the 12-month period prior to the date hereof; (b) in no event shall the staffing levels and timeliness with which the Transition Services are provided to the Recipient be less than those with which Vitro or its affiliates provide similar services to the Excluded Business; and (c) except as set forth in clauses (a) and (b), in no event shall the type and quality of Transition Services, or staffing levels and timeliness with which they are provided, be required to be provided in a manner materially greater than such services were provided during the 12-month period prior to the date hereof. Vitro, in the performance of the Transition Services and other obligations hereunder, shall comply with Laws applicable to the Transition Services performed by Vitro, and shall use commercially reasonable efforts to enforce the terms and conditions of its or its Affiliate’s contracts with vendors that relate to the Transition Services hereunder.

     3. Fees & Expenses.

(a) Vitro shall sell, and the Recipient shall purchase, the Transition Services provided by Vitro or caused to be provided by Vitro pursuant to this Agreement at the prices set forth on Exhibit A, which prices represent, except as noted under such Exhibit, Vitro’s fiscal year 2005 actual charges in Mexican Pesos to the Acquired Companies for each Transition Service (the “2005 Vitro Charges”), plus any applicable value added tax (the “VAT”). Vitro shall submit on a monthly basis a single consolidated invoice to Vitrocrisa describing with reasonable particularity the Transition Services provided by Vitro and the fees and applicable VAT due therefor. Invoices for Transition Services provided by Vitro vendors, with reasonably available supporting detail as to the charges, shall be submitted by Vitro together with such consolidated invoice, or directly by such vendors, at the option of Vitro. All amounts payable under this Agreement for each month during the term shall be due and payable within 45 days of the date of invoice issued hereunder. Except as noted in Exhibit A, all invoices will be denominated, and payment will be made, in Mexican Pesos. Any invoice denominated in US$ dollars shall be translated to Mexican Pesos at the exchange rate published by Banco de Mexico in the Official Gazette (Diario Oficial de la Federación) as of the last Business Day prior to the date of payment for the month in question. All invoices will clearly identify the “pass-through” amounts due by Vitro to third-party providers of goods or services and such amounts shall be passed-through to Vitrocrisa without mark-up or margin of any kind. Notwithstanding the foregoing, until the earlier of the third anniversary of the date hereof or the date on which the General Manager’s services are no longer required by or otherwise made available to the Acquired Companies as contemplated hereby, the amount payable by the Acquired

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Companies to Vitro as total compensation for the General Manager’s services shall be equal to US $41,666.66 per month, translated to Mexican pesos at the exchange rate published by Banco de México in the Official Gazette (Diario Oficial de la Federación) for the date of the invoice for the month in question. In addition to the foregoing, the Acquired Companies shall be responsible for and pay all travel, entertainment and other expenses incurred by the General Manager in connection with his services to the Acquired Companies hereunder or to such other duties as Recipient, Purchasers, or the Acquired Companies may determine. If any amount payable by Recipient under this Agreement is not paid when due, Recipient shall pay interest on such past due amount, accruing commencing on the date such amount is due until such amount is paid, at an annual rate equal to TIIE (Tasa Interbancaria de Equilibrio) multiplied by 1.5 (if such amount is due in Mexican pesos) or 30-day LIBOR plus 4.00% (if such amount is due in U.S. dollars).

(b)

Fee Adjustments.

                    (i) With respect to any Transition Service other than the General Manager’s services, after the second anniversary of the date hereof, Vitro may prospectively and proportionally adjust the amount charged by Vitro with respect to such Transition Service to account for increases in the actual cost incurred by Vitro for materials, services and labor costs in connection with the Transition Service, provided, that in no event shall the amount of any such proportionate annual increase with respect to the Transition Service in question exceed the proportionate amount of any direct cost increases incurred by Vitro since year-end 2005 relating to such Transition Service.

                    (ii) If requested by the Recipient, or by Vitrocrisa on behalf of the Recipient, Vitro shall provide the Recipient, or Vitrocrisa on behalf of the Recipient, but subject to and limited by any confidentiality agreements with vendors, if applicable, with reasonable access to Vitro’s bills of material or services costs and evidence of increased labor costs necessary to enable the Recipient to verify any such increase. Any adjustment pursuant to this paragraph shall be reflected in an amendment to Exhibit A, provided to the Recipient contemporaneously with the invoice reflecting any such adjustment.

(c)

With respect to any Transition Service other than the General Manager’s services, after the third anniversary of the date hereof, the Parties will negotiate the terms upon which the Transition Services could be continued, if any, and without obligation of any of the Parties to enter into a new transition services agreement, or to extend the terms of this Agreement.

(d)

The Recipient will reimburse, to the extent not incurred in the 2005 Vitro Charges, Vitro for all reasonable, extraordinary, out-of-pocket travel, lodging, food and other similar expenses in connection with the Transition Services furnished. The Recipient will reimburse Vitro vendors for all reasonable, extraordinary, out-of-pocket travel, lodging, food and other similar expenses incurred by such vendors in connection with the Transition Services furnished.

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(e)	Any Taxes or other governmental charges (not including those based upon income) which may now or later be imposed upon the sale or use of the Transition Services provided pursuant to this Agreement shall be paid by the Recipient.
(f)	The Parties acknowledge that the General Manager shall be an employee of Vitro or an Affiliate thereof. Vitro shall be responsible for and pay to the General Manager all compensation and other consideration payable to the General Manager during the term hereof, and Vitro shall indemnify and hold Purchasers and the Acquired Companies harmless from and against any Loss arising therefrom or related thereto. In furtherance of the foregoing, during the term hereof, Recipients agree to provide Vitro (i) reports of the Acquired Companies as a whole for EBITDA, working capital and capital expenditures as may be reasonably requested by Vitro, and (ii) such additional financial information regarding the Acquired Companies as Vitro and the Recipient mutually agree, in their reasonable discretion, is necessary and appropriate for Vitro to determine the compensation and other consideration payable to the General Manager. Vitro shall have responsibility for deducting and withholding any amounts required to be deducted and withheld from payments made to the General Manager under applicable Tax Law, and shall promptly remit any such amounts to the appropriate Governmental Authorities. Vitro shall indemnify and hold Purchasers and the Acquired Companies harmless from any Losses arising out of any assertion by any Governmental Authority or any other third Party that during the term hereof Purchasers or the Acquired Companies (i) improperly failed to withhold any Taxes from the payments made to the General Manager, (ii) improperly failed to pay the General Manager any wages, benefits or severance, or (iii) are the employer of the General Manager.
(g)	Until the second anniversary of the date hereof, the Acquired Companies shall receive a credit in the amount of US $52,083.33 each month against the Transition Services Fees (as defined below) payable by any of the Acquired Companies for the Transition Services provided under (i) this Agreement; (ii) the Agreement between Desarrollo Personal y Familiar, A.C. and Vitrocrisa with respect to “Vitro Club” and “El Manzano”; (iii) the Agreement between Compañía Vidriera, S.A. de C.V and VC Comercial with respect to the weighbridge (industrial scale) owned by Compañía Vidriera, S.A. de C.V and located within Vidriera Monterrey; (iv) the Agreement between Compañía Vidriera, S.A. de C.V. and VC Comercial with respect to an electrical substation (but limited to the “Fixed Fee” under the electrical substation contract); and (v) the Medical Services Agreement between Clínica Vitro, A.C. and Vitrocrisa. The fees payable by any of the Acquired Companies pursuant to the agreements listed in the preceding sentence are referred to in this Agreement as the “Transition Services Fees”. For purposes of applying all or any portion of the Credit against any Transition Services Fees that are payable by any of the Acquired Companies in Mexican pesos, the applicable portion of the Credit shall be determined by reference to the U.S. dollar / Mexican peso exchange rate published by Banco de México in the Official Gazette (Diario Oficial de la Federación) for the date of the invoices in question. If

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the Transition Services Fees in any given month are not at least equal to the applicable monthly credit, the Acquired Companies may accrue and carry forward 100% of the unutilized portion of such credit to any subsequent month until the Acquired Companies shall have received the full benefit of all such monthly credits, but in no event after the 24th month after the date of this agreement. Notwithstanding the foregoing, the Transition Services Fees shall not include, and the credit contemplated by this Section 3(g) shall not apply to, any fees, charges, expenses or costs related to any approved Migration Plan hereunder or Transition Services provided by Vitro vendors or with respect to goods or services provided by, or any pass through amounts payable to, third party suppliers or vendors

(h)

With respect to amounts payable under this Agreement, the Recipient shall be entitled to exercise any rights of set-off granted to Purchasers in accordance with and subject to the terms of Section 9.06(b) of the Purchase Agreement.

     4. Further Assurances. Each Party agrees that it will take such actions, provide such information and execute and deliver such further instruments and documents as may be necessary to ensure and evidence the intent of this Agreement.

     5. Term and Termination.

(a)

The term of this Agreement shall commence on the date hereof and shall expire on the third anniversary of the date of this Agreement (the “Initial Term”). Certain services shall be provided for such shorter period of time as set forth in Column 2 of Exhibit A. Should the Recipient desire to extend the time period for any Transition Service beyond the Initial Term (or, with respect to Transition Services to be provided for a shorter period, if Recipient desires to extend the time period for such services beyond the shorter period provided in Exhibit A), it shall provide at least 30 days prior written notice of such request to Vitro (the Initial Term and any extension period are referred to as the “Term”); provided, however Vitro shall not be obligated to agree to any extension. The Recipient may terminate any Transition Service as contemplated in paragraph (c) below. Upon termination of any Transition Service, the portion of the monthly fees payable by the Recipient after such termination shall be reduced to the extent of fees attributable to the terminated Transition Service.

(b)

If Vitro determines at any time that it will no longer provide, or that it will materially alter or reduce, any services provided (whether provided by Vitro, any of its Affiliates, or by any third party vendors) to any of its Affiliates of substantially the same kind, level and nature as any of the Transition Services Vitro is obligated to provide to the Recipient pursuant to this Agreement, Vitro will provide Vitrocrisa, on behalf of the Recipient, with written notice specifying (i) the Transition Services to be discontinued, altered or reduced and (ii) the final date upon which such Transition Services will be provided to the Recipient, which date will be not less than 90 days after the date of such notice is received by Vitrocrisa. Upon notice from Vitro to the Recipient regarding the

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	discontinuance, alteration or reduction of any Transition Service, Vitro and the Recipient shall use commercially reasonable efforts to establish a Migration Plan (as defined below) with respect to such Transition Service.
(c)	Provided that the Transition Services Vitro is obligated to provide to the Recipient pursuant to this Agreement are not discontinued, materially altered or reduced (except as otherwise provided and permitted pursuant to Section 5(b) above), Vitro, at its sole discretion, may change or substitute any third party vendor currently providing goods or services under, or change the terms and conditions of, any Shared Contract without the authorization of the Recipient. Vitro shall inform the Recipient as soon as practicable of any new terms and conditions negotiated. To the extent this subparagraph (c) conflicts with the Section 5.08 of the Purchase Agreement, the terms of the Purchase Agreement shall control.
(d)	The Recipient may, for convenience, and for any reason and without any penalty or Liability whatsoever except as provided below, terminate this Agreement, or remove from Exhibit A any Transition Service subject to this Agreement, by giving Vitro not less than 30 days written notice specifying (i) either the termination of this Agreement or the Transition Service(s) to be removed from Exhibit A and, therefore, to be no longer subject to this Agreement; and (ii) the effective date of such termination or removal of Transition Service(s). The Recipient shall be responsible for and pay all early termination penalties, fees and similar payments or Liabilities payable to any Vitro third party vendors, if any, arising solely as a result of any early termination by Recipient pursuant hereto, or its proportionate share of all such early termination penalties, fees, and similar payments or Liabilities, if Vitro, at its discretion and for its own convenience (subject to subparagraph (b), above), decides to simultaneously with Recipient, terminate its obligations under the relevant contract. The Parties shall cooperate in good faith to minimize any termination fees associated with any termination of the a Transition Service provided by any Vitro third party vendor. Vitro shall notify Recipient, within 5 Business Days of Vitro’s receipt, of any early termination notification provided by any Vitro third party vendors to Vitro. In addition, Recipient acknowledges and agrees that the early termination of certain Transition Services may adversely impact or result in the early termination of other related Transition Services as reasonably determined by Vitro (for example, the termination of IT Services would require the termination of payroll services).
(e)	The Recipient may terminate this Agreement upon 30 days prior written notice to Vitro if Vitro is in material breach of this Agreement unless Vitro, within such 30 day period, remedies such breach or, in the case of a material breach which cannot be reasonably remedied within such period, initiates action which can reasonably be expected to result in curing such breach within a reasonable period of time. If such breach is cured in the period specified above and, subsequently, Vitro breaches this Agreement in the same manner, the Recipient may terminate this Agreement upon 30 days prior written notice to Vitro, and Vitro shall not have any further opportunity to cure. Vitro may suspend performance of

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	all or any portion of the Transition Services upon 30 days prior written notice if Recipient fails to pay when due any undisputed amounts to Vitro or to third party vendors on a direct or pass through payment basis, unless the Recipient within such 30 day period cures such payment default; provided, however, that after any such suspension of the provision hereunder of the Transition Services by Vitro in accordance the foregoing the Recipient may, upon payment to Vitro of the necessary past due amount (including payment of the Transition Services fees accrued during the suspension period), reinstate the provision by Vitro of the Transition Services under this Agreement. In addition to the foregoing right to suspend the Transition Services and the right to receive interest on past due payments as provided in Section 3(a), Vitro may terminate this Agreement upon 30 days prior written notice to Recipient (without any opportunity or right of Recipient to cure), if three (3) or more times during the Term Recipient fails to pay any undisputed amounts payable to Vitro or to any third party vendors on a direct or pass through payment basis more than 30 days after the date such payments are due. This Agreement may not be terminated by Vitro for any other reason and shall continue in full force and effect notwithstanding any breach of this Agreement by the Recipient (other than as provided in the preceding sentence), and Vitro’s remedies in the event of any such other breach of this Agreement by the Recipient shall be limited to claims for monetary damages or for injunctive or other legal or equitable relief to prevent any continuation or recurrence of any breach of this Agreement. Recipient acknowledges and agrees that with respect to any Transition Services provided by any Vitro vendors, the failure of Recipient to pay the fees for such services when due may result in the suspension or termination of such services by such vendors without any liability of Vitro therefor.
(f)	Upon the expiration or termination of this Agreement for any reason, each of Vitro, on the one hand, and the Recipient, on the other hand, shall return or destroy, or cause to be returned or destroyed, any and all Confidential Information (as defined below) of the other Party in its possession or control and, upon request, provide written certification of compliance with this obligation to the other Party.
(g)	With respect to the Transition Services provided by the General Manager, if Vitro determines that Cause exists for the termination of the General Manager it shall notify Vitrocrisa in writing, and Vitro shall, no earlier than 30 days after the date of such notice, have the right to terminate the General Manager’s employment for Cause. If at any time Vitrocrisa determines that it no longer requires the services of the General Manager, then it shall notify Vitro of such election, and within the 60 day period following such notice Vitro shall amend the General Manager’s employment agreement so that 0% of his duties are allocated to Transition Services or other such duties as the Acquired Companies, Purchasers or any of their Affiliates may have determined. If during or upon the expiration of the Term (x) Vitro terminates the General Manager in connection with his decision to accept an offer of employment with any of the Acquired Companies, Purchasers or their Affiliates, or (y) any of the Acquired Companies, Purchasers or their Affiliates were to notify Vitro

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that the General Manager’s services are no longer required and Vitro were to terminate the General Manager’s employment, in each case for any reason other than for Cause, then, upon termination of the General Manager’s employment with Vitro, Vitro shall pay the General Manager an amount equal to the lump sum retirement benefit to which he will then be entitled under his current retirement plan at age 60, to the extent that such benefit shall not already have been paid in connection with his termination of employment with the Acquired Companies or otherwise, with such amount being actuarially reduced to the date on which such payment is made and without duplication, all other benefits due by Law or Contract to the General Manager. In the event of termination under clause (x) or (y) above, then the Acquired Companies shall pay to Vitro an amount equal to 50% of the aggregate severance required by Law to be payable to the General Manager in connection with the termination of his employment with Vitro (with the Acquired Companies’ portion thereof not to exceed US $500,000). If the General Manager terminates his employment for Good Reason, Vitro shall indemnify and hold the Acquired Companies and Purchasers harmless from and against any Loss suffered or incurred by the Acquired Companies and Purchasers resulting or arising from such termination for Good Reason. If the General Manager ceases to be employed by Vitro for any reason other than that set forth in clause (x) of this paragraph, Vitro shall use commercially reasonable efforts (but shall not be required to expend any funds) to assist the Acquired Companies in identifying and recruiting a replacement and Vitro shall have no further Liability or obligation hereunder with respect to the General Manager or his replacement. The obligations of the Acquired Companies to pay compensation for the General Manager’s services under Section 3(a) shall end upon the termination of the General Manager’s employment or amendment of the General Manager’s employment agreement so that 0% of his duties are allocated to Transition Services or other such duties as the Acquired Companies, Purchasers or any of their Affiliates may have determined.

(h)

If the aggregate monthly fees payable for the “Vitro IT Services” identified under “Application Support” (in each case as identified in Annex A to Exhibit A) (the “Monthly IT Fees”) are reduced to $226,323.21 Mexican pesos (the “Vitro IT Threshold”) as a result of a reduction in the number of users, then upon Vitro’s request, the Parties will negotiate in good faith appropriate adjustments to the Vitro IT Fees to ensure that the ongoing Vitro IT Fees will be sufficient for Vitro to be able to continue to cover its costs associated with the provision of the Vitro IT Services; provided, however, that Vitro shall be under no obligation to accept an adjustment to Vitro IT Fees below the Vitro IT Threshold for the Vitro IT Services. Further, if at anytime, the Recipient reasonably demonstrates that the Vitro IT Services specified in Exhibit A as “Management and Administration” could be provided by a third party on substantially the same terms and conditions as provided herein but for less fees than those payable hereunder, then, upon providing reasonable evidence of the foregoing to Vitro, Vitro shall adjust prospectively its fees hereunder to match the third party quotation.

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     6. Contact Persons. Each Party shall promptly appoint a management level person or persons (who may be employed by an Affiliate of such Party) for the purpose of coordinating the provision of Transition Services to the Recipient (the “Contact Persons”) under this Agreement. The Contact Persons shall resolve issues that may arise under this Agreement by: (a) coordinating management team meetings (in person or by phone) on an expedited basis to decide on an appropriate resolution or plan of resolution of the issue; (b) implementing, on a timely basis, such mutually agreed upon plan or resolution; and (c) taking any other steps necessary in the Contact Persons’ reasonable judgment to resolve the issue. The initial Contact Persons for each Party are set forth on Exhibit B.

     7. Migration From Certain Transition Services.

(a) The Recipient agrees that, not later than 90 days prior to the initial expiration date of each Transition Service, as set forth in Column 2 of Exhibit A, it shall cause the Acquired Companies to provide to Vitro for its review and approval, a written plan to transfer or otherwise replace such Transition Services as continue to be provided as of that date pursuant to this Agreement (each a “Migration Plan”). The respective Contact Persons shall meet to review the Migration Plan, which shall include, as applicable, phases of implementation, milestones, the requested Vitro involvement and expected costs, including the per hour rate for the use of Vitro personnel service for inter-dependency issues, data migration issues, and contingencies. The approval by Vitro of the Migration Plan will not be unreasonably withheld, and Vitro will make counterproposals if the schedule in or other provisions of any proposed Migration Plan cannot be commercially reasonably met by Vitro based on existing Vitro resources and commitments. Reasonable out-of-pocket expenses incurred by Vitro in connection with the implementation of any Migration Plan, including for the avoidance of doubt payments to Vitro vendors for services and consents or approvals directly required to implement the Migration Plan and the payment of salaries and fringe benefits only to the extent required by Law (“Minimum Benefits”) for Vitro employees who work on such Migration Plan, shall be set-out initially as a per hour rate and reimbursed by the Recipient, or any Purchaser or Acquired Company on behalf of the Recipient. Subject to the agreement by Vitro with such Migration Plan as set forth above, Vitro shall prior to the expiration of any Transition Service, take all commercially reasonable steps necessary to assist in the implementation of such Migration Plan related to each such Transition Service. The Parties agree that Vitro personnel are required for the Migration Plan only as a result of Vitro’s specific knowledge and experience as former provider of services to, and corporate affiliation with, the Acquired Companies. Therefore, Vitro’s (and its personnel’s) involvement in the Migration Plan shall be primarily limited to the migration activities that only Vitro personnel can perform as a result of past services provided by Vitro and Vitro’s prior affiliation with the Acquired Companies. For the avoidance of doubt, the Parties agree that Vitro shall not be obligated to provide Migration Services which are general in nature and for which there is a market of third party contractors who can provide such services without requiring the specific knowledge possessed by Vitro in any material respect.

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(b) With respect to any software that is subject to the Vitro Software License Agreement (the “SLA”), upon Recipient’s request at any time during the term of this Agreement, Vitro shall provide reasonable technical assistance to Recipients with respect to the technical functionality, operating environment, interfaces and data inputs and outputs of the Software so as to provide Recipients’ technical staff with sufficient knowledge of such Applications, without accessing the Source Code, to evaluate and understand such functionality in sufficient detail for Recipient to develop and execute a Migration Plan for such Software even if Vitro has not yet released to Recipients the Source Code for such Applications. In the event that Recipients terminate any Transition Services relating to Applications for which Vitro has not yet delivered Source Code pursuant to the terms of the SLA, the Recipients shall pay to Vitro vendors for direct services and pay the salaries and Minimum Benefits for Vitro employees, as expressed as an hourly rate pursuant to subparagraph (a) of this Section, for continued provision of technical support and maintenance of such Applications, including patches, bug fixes, and Permitted Modifications as required, until such time as the Source Code for such Application is delivered by Vitro to Recipient and, at the request of Recipient, for a period of up to six months thereafter. (For purposes of the foregoing, the terms Application, Permitted Modification, Software, and Source Code shall have the meanings set forth in the SLA.)

     8. Confidential Information.

(a)

“Confidential Information” means (i) any financial information provided to Vitro pursuant to Section 3(f), (ii) any information provided by Vitro pursuant to Sections 11 or 12, and (iii) any and all information of any kind and any format and medium that is not generally known to the public and that: (A) is marked confidential, restricted or proprietary; or (B) under all of the circumstances ought reasonably to be treated as confidential and/or proprietary. Notwithstanding the foregoing, Confidential Information does not include information that: (a) is, as of the time of its disclosure, or thereafter becomes, part of the public domain through a source other than the receiving Party; or (b) was known to the receiving Party as of the time of its disclosure except for Confidential Information of any Party known by the other Party as of the date of this Agreement, provided, however, that information related to the Business that would be considered Confidential Information but for the fact that Vitro and/or its Affiliates know such information as a result of their affiliation with the Business prior to the date of this agreement and such information is not otherwise used in connection with the Excluded Businesses shall be considered Confidential Information of Recipient and the Acquired Companies; or (c) the receiving Party is required, by Law or court order, to disclose.

(b)

Each Party shall maintain in confidence all Confidential Information of the other Parties. Further, no Party shall use the Confidential Information of the other Parties for any purpose not directly related to this Agreement.

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(c) The terms of this Section 8 will survive the expiration or earlier termination of this Agreement for a period of five years from the date of such expiration or termination.

     9. Indemnification.

(a)

Vitro, at its sole cost and expense, shall indemnify and hold harmless the Recipient, their Affiliates and their respective Representatives from any and all Losses arising out of or resulting from any Actions brought by or on behalf of any employees of Vitro or its Affiliates against the Recipient, their Affiliates and their respective Representatives, claiming any benefits or other rights available to such employees under Labor Laws related to this Agreement. For the avoidance of doubt, all Losses arising out of or resulting from the employment relationship of any Vitro Entity and its employees, including the General Manager, will be the sole responsibility of Vitro, which shall be considered the employer of such individuals. Notwithstanding the foregoing, the parties agree that nothing in this paragraph shall limit the Acquired Companies’ payment obligations set forth in Section 5(g) of this Agreement.

(b)

Recipient, at its sole cost and expense, shall indemnify and hold harmless Vitro, its Affiliates and Representatives from any and all Losses arising out of or resulting from any Actions brought by or on behalf of any employees of Recipient, the Acquired Companies, or their Affiliates against the Vitro, its Affiliates and their respective Representatives, claiming any benefits or other rights available to such employees under Labor Laws related to this Agreement. For the avoidance of doubt, all Losses arising out of or resulting from the employment relationship of any Recipient, the Acquired Companies and their employees, will be the sole responsibility of Recipient and the Acquired Companies, which shall be considered the employer of such individuals.

     10. Information and Materials.

          (a) Except as otherwise expressly provided in this Agreement, the SLA, or in the Purchase Agreement, as between Vitro and Recipient, the Recipient shall own and retain all right, title and interest in and to any and all Intellectual Property rights in and to data or Confidential Information of the Recipient and all data, software, source and object code, specifications, designs, processes, techniques, concepts, improvements, discoveries, and inventions, including without limitation any modifications, improvements, or derivative works thereof, created or provided by or for the Recipient in connection with the performance of this Agreement by Vitro except for Intellectual Property developed by Vitro for the primary benefit of the Excluded Businesses (“Recipient Content”).

          (b) Except as otherwise expressly provided in this Agreement, the SLA, or in the Purchase Agreement, to the extent that any Intellectual Property rights arise out of the performance of this Agreement as between the Parties, the Recipient will own all such Recipient Content and any deliverables created in connection with such Transition Services (and such Recipient Content shall be deemed to be a “work-made-for-hire”). Vitro hereby assigns, and shall cause its third party vendors, agents or contractors to assign, all of their respective right, title and

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interest in and to any such Recipient Content to the Recipient to effectuate the allocation of such rights as provided in this subsection and such assignment shall be deemed made upon the creation of such Intellectual Property rights without need for further action of any Party. Vitro shall, at the Recipient’s request and expense, assist the Recipient in obtaining, registering, and recording Recipient Content rights as allocated hereunder. Such assistance shall include execution of all documents reasonably required by the Recipient.

          (c) At any time during the Term, promptly at the Recipient’s written request, (but in no event more than 20 days after the date of the request) Vitro shall deliver to the Recipient a true and correct copy of any and all materials or data owned by the Recipient and in the possession of Vitro, in such form and format as are then being used by Vitro to perform the Transition Services.

          (d) Vitro represents and warrants that it has sufficient rights in any third party materials, properties or Contracts to provide the Transition Services as contemplated hereunder without payment of any fees or breach of any Contract or violation of the right of third parties other than as specifically stated in the Shared Contracts and agreed by the Parties to be the responsibility of the Recipient. Subject to Sections 5(b), 5(c) and other applicable provisions of this Agreement, Vitro shall maintain in effect during the Term any such rights as are required to provide the Transition Services at its own expense except as any such costs are incorporated into and are part of the fees payable by the Recipient pursuant to Section 3 or other applicable provisions of this Agreement.

     11. Audits and Inspections.

          (a) Performance Audit. Vitro will provide to Libbey Inc. (“Libbey”) or the Recipient (or Vitrocrisa on the Recipient’s behalf), their internal and external auditors (“Libbey’s auditors”), and such other Representatives as Libbey or the Recipient may from time to time designate, reasonable access to Vitro’s internal and external auditors (“Vitro’s auditors”) and other personnel and data, and to any third-party (such as E.D.S.) rendering services to Vitro for the benefit of the Acquired Companies (to the extent agreed by such third-parties), for the purpose of enabling Libbey’s auditors, at the sole cost and expense of Libbey or the Recipient, to perform audits, inspections and tests of the effectiveness of Vitro’s logical and physical security and data protection controls relating to the Transition Services, as more particularly described in attached Exhibit C. Vitro’s obligation to provide such access to Libbey or the Recipient (and Libbey’s auditors) is subject to the following:

       (i) Libbey, the Recipient and Libbey’s auditors shall be entitled only to such access as is reasonably necessary in order for Libbey to (A) obtain the unqualified opinion of Libbey’s external auditors in connection with the audit of Libbey’s consolidated financial statements and/or internal controls (whether such audit is required pursuant to applicable U.S. securities Laws or any agreement to which Libbey or Libbey Glass Inc. is a party which requires that such audit comply with such Laws) and (B) file such certifications of Libbey or its executives as Libbey is required by applicable Laws to file with the U.S. Securities and Exchange Commission with respect to Libbey’s financial statements and internal controls;

       (ii) Vitro shall not be required to provide any proprietary or other confidential information to Libbey’s auditors until such time as Vitro has received from Libbey’s auditors an executed confidentiality agreement in commercially reasonable form;

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       (iii) Prior to performing any independent audits, inspections or tests pursuant to this Section 11, Libbey’s auditors shall consult with Vitro’s auditors to determine whether Vitro’s auditors have performed such audits, inspections and/or tests and, if so, the scope of such audits, inspections and/or tests and results thereof. If (A) Vitro’s auditors have not performed such audits, inspections and/or tests or (B) Libbey’s auditors are not, in the exercise of their professional judgment, satisfied with the scope or results of such audits, inspections or tests, Libbey’s auditors shall advise Vitro’s auditors of any additional inspection or testing that Libbey’s auditors require, and such inspection or testing shall be performed by Vitro’s auditors, at the sole cost and expense of Libbey. If, after such additional inspection or testing, Libbey’s auditors require access to Vitro’s personnel or to data or records for purposes of the audits, inspections or testing contemplated by this Section 11(a), then Vitro will, within a reasonable period of time after receipt of written request from Libbey or Libbey’s auditors, furnish to Libbey’s auditors access to such personnel, data or records at reasonable times during normal working hours, without undue disruption to Vitro’s day-to-day operations, and Libbey’s auditors will perform such inspections, audits or testing as expeditiously as possible. Libbey agrees to provide Vitro copies of all reports or results of such audits, inspections or tests upon request, and Libbey agrees that all such reports or results are subject to the provisions of Section 8 above;

       (iv) Vitro shall not be obligated to provide to Libbey, the Recipient or Libbey’s auditors any information or access (A) with respect to which Vitro owes a contractual duty of confidentiality to an unrelated third party (provided, however, that Vitro shall use commercially reasonable efforts to obtain such third party’s consent to the disclosure of such information to Libbey’s auditors solely for purposes of enabling Libbey’s auditors to issue the unqualified audit opinion contemplated in this Section 11(a)) or (B) that relates to the business and operations of other Vitro Entities and does not relate to the business of the Acquired Companies; and

       (v) While on Vitro’s premises, Libbey’s auditors or other Representatives shall adhere to Vitro’s corporate security and safety policies.

          (b) Cooperation with Audit. Subject to the conditions in paragraph (a) above, Vitro shall assist the Libbey or the Recipient (or Vitrocrisa on the Recipient’s behalf) and/or their representatives during the Term as is reasonably required including, but not limited to, making available all books, records, and documents relevant to such audit in Vitro’s or any of its Affiliates’ possession. Vitro shall reasonably cooperate with Libbey or the Recipient and/or their designees in connection with audit functions and with regard to examinations by any Governmental Authority during the Term. Recipient will reimburse Vitro for the reasonable costs and expenses incurred by it in complying with this Section 11. Vitro agrees to use commercially reasonable efforts to remedy any significant deficiency identified during the course of any audit that the Libbey auditors identify as a significant deficiency with respect to Libbey’s audited financial statements or internal controls.

          (c) Follow-Up Audits. If any audit conducted by Libbey, the Recipient or Libbey’s auditors pursuant to this Section 11 reveals significant deficiencies in connection with any audited items, Libbey or the Recipient (or Vitrocrisa on the Recipient’s behalf) and Libbey’s auditors shall be entitled to conduct follow-up audits during the Term not more often than twice during the period ending December 31, 2006 and once every three months thereafter until such time as such significant deficiencies are determined to have been remediated and no additional significant deficiencies are identified.

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     12. Force Majeure.

(a)

An event of “Force Majeure” shall mean an event or circumstance that prevents, impacts or delays the affected Party from performing its obligations under this Agreement if such event or circumstance is beyond the reasonable control of and not due to the fault of the affected Party, including, without limitation, acts of God (e.g., earthquake, flood, hurricane, tornado, and other severe weather conditions); strikes or other labor disturbance; acts of third parties, including suppliers and vendors; acts of a public enemy; civil or military conflicts or commotions, unrest, or disturbance; and compliance with an order of a governmental authority. The mere inability to meet a payment obligation as a result of insufficient funds shall not constitute an event of Force Majeure, but an inability to meet a payment obligation as a result of an event or circumstance that results in the closure of financial institutions generally or the closure of the Party’s financial institutions specifically and that prevents or delays the transmission of funds to the other Party shall constitute an event of Force Majeure.

(b)

If either Party is rendered wholly or partly unable to perform its obligations under this Agreement because of a Force Majeure event, that Party will be excused from whatever performance is affected by the Force Majeure event to the extent so affected; provided, that: (i) the non-performing Party, as soon as reasonably possible after knowing of the occurrence of the Force Majeure event, gives the other Party written notice describing the particulars of the occurrence; (ii) the suspension of performance is of no greater scope and of no longer duration than is reasonably required by the Force Majeure event; (iii) the non-performing Party uses reasonable efforts to overcome or mitigate the effects of such occurrence; and (iv) when the non-performing Party is able to resume performance of its obligations hereunder, that Party shall give the other Party written notice to that effect and shall promptly resume such performance.

     13. Miscellaneous.

(a) Access. Upon reasonable notice, and only to the extent reasonably required for Vitro to perform the Transition Services, the Recipient shall provide the Vitro personnel with access to the equipment, office space, manufacturing facilities and telecommunications and computer equipment and systems used in the Business. Access, if any, to the Recipient’s premises and/or systems is granted solely to facilitate the provision of the Transition Services. Access, if any, to the foregoing is limited to those specific premises and/or systems, time periods and personnel as are agreed to by the Recipient, which agreement shall not be unreasonably withheld. Use of any other of the Recipient’s premises or systems is expressly prohibited. This prohibition applies even when the premises or systems which Vitro are authorized to access serve as a gateway to other premises or systems outside the scope of Vitro’s authorization. In the event that access to the Recipient’s premises or system is reasonably required to perform services and such access is denied, then Vitro shall have no obligation to provide services to the extent it cannot perform

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	such services due to the denial of such access. When accessing the Recipient’s premises or systems in connection herewith, the personnel accessing such premises or systems shall comply with all policies and procedures applicable to the use of such premises and systems including, but not limited to, health, safety and security policies and procedures.
(b)	Relationship of the Parties. It is expressly understood and agreed that in rendering the Transition Services hereunder, Vitro is acting as independent contractor and that this Agreement does not constitute any Party (or any Representative of a Party) as an employee, agent or other representative of any other Party for any purpose whatsoever. Notwithstanding Section 11.13 of the Purchase Agreement, no Party has the right or authority to enter into any Contract, warranty, guarantee or other undertaking in the name or for the account of any other Party, or to assume or create any obligation or liability of any kind, expressed or implied, on behalf of any other Party, or to bind any other Party in any manner whatsoever, or to hold itself out as having any right, power or authority to create any such obligation or liability on behalf of any other or to bind any other Party in any manner whatsoever.
(c)	Nonwaiver. Failure to insist in any instance upon strict performance of any provisions of this Agreement or to enforce any right hereunder will not be construed as a waiver of any such provision or any other provision of this Agreement or the relinquishment of any such right or any other right but the same will continue in full force and effect.
(d)	Headings. The headings used in this Agreement are intended for convenience only. They are not a part of the written understanding between the Parties, and they shall not affect the construction and interpretation of this Agreement
(e)	Survival. The provisions of Sections 5(g) (Return of Confidential Information upon Termination), 8 (Confidential Information), 9 (Indemnification), 10 (Information and Materials) and 13 (Miscellaneous) shall survive any expiration or termination of this Agreement.
(f)	Incorporation by Reference. The provisions of Sections 11.04 (Severability), 11.05 (Entire Agreement), 11.06 (Assignment), 11.07 (Amendment), 11.08 (Waiver), 11.11 (Governing Law; Agent for Service of Process), 11.12 (Waiver of Jury Trial), 11.14 (Specific Performance) and 11.15 (Counterparts) of the Purchase Agreement shall be incorporated into this Agreement, mutatis mutandis, as if references to “this Agreement” in the Purchase Agreement were references to “this Agreement” in this Agreement.

[remainder of page intentionally left blank; signatures appear on following page(s)]

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     IN WITNESS WHEREOF, Acquired Companies and Vitro have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

RECIPIENT:		VITRO:
Crisa Libbey S.A. de C.V.		Vitro Corporotivo, S.A. de C.V.
By:	/s/ Roberto Rubio	By:	/s/ Roberto Colomé
	Name: Roberto Rubio Title: Attorney-in-Fact		Name: Roberto Colomé Title: Attorney-in-Fact
Vitrocrisa Holding, S. de R.L. de C.V.
By:	/s/ Roberto Rubio
	Name: Roberto Rubio Title: Attorney-in-Fact
Vitrocrisa S. de R.L. de C.V.
By:	/s/ Roberto Rubio
	Name: Title: Attorney-in-Fact
By:	/s/ José Antonio Pérez
	Name: José Antonio Pérez Title: Attorney-in-Fact
Vitrocrisa Comercial, S. de R.L. de C.V.,
By:	/s/ Roberto Rubio
	Name: Roberto Rubio Title: Attorney-in-Fact
By:	/s/ José Antonio Pérez
	Name: José Antonio Pérez Title: Attorney-in-Fact
Crisa Industrial, L.L.C.
By:	/s/ Roberto Rubio
	Name: Roberto Rubio Title: Authorized Signatory
By:	/s/ José Antonio Pérez
	Name: José Antonio Pérez Title: Authorized Signatory

[Signature Page to the Transition Services Agreement]

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EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the filing in the Current Report on Form 8-K under the Securities Exchange Act of 1934 of Libbey Inc. dated June 21, 2006 of our report dated April 14, 2006 related to the combined financial statements of Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries, Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C. as of and for the year ended December 31, 2005.

Galaz, Yamazaki, Ruiz Urquiza, S.C.
Member of Deloitte Touche Tohmatsu

/s/ Ernesto Cruz Velázquez de León
C.P.C. Ernesto Cruz Velázquez de León
Monterrey, N.L. Mexico

June 21, 2006

EX-99.1

EXHIBIT 99.1

Libbey Inc.
300 Madison Ave
P.O. Box 10060
Toledo, OH 43699

NEWS RELEASE

AT THE COMPANY:	AT FINANCIAL RELATIONS BOARD:
Kenneth Boerger	Lisa Fortuna
VP/Treasurer	Analyst Inquiries
(419) 325-2279	(312) 640-6779

FOR IMMEDIATE RELEASE
FRIDAY, JUNE 16, 2006

LIBBEY INC. ANNOUNCES CLOSING OF
REFINANCING AND CRISA ACQUISITION

TOLEDO, OHIO, JUNE 16—Libbey Inc. (NYSE: LBY) announced that its wholly owned subsidiary Libbey Glass Inc. and its subsidiaries have closed a private offering of $306 million aggregate principal amount of floating rate senior secured notes due 2011 and a private offering of units consisting of $102 million aggregate principal amount 16% senior subordinated secured pay-in-kind notes due 2011 and detachable warrants to purchase a number of shares equal to an aggregate of three percent of Libbey’s currently outstanding common stock, on a fully diluted basis, at an exercise price of $11.248 per share. Concurrently, Libbey Glass entered into a new $150 million senior secured credit facility.

Libbey used proceeds from these financings to close the acquisition from Vitro, S.A. de C.V. of its 51% equity interest in Libbey’s Mexican joint venture (“Crisa”), bringing Libbey’s ownership of Crisa to 100%, and to repay substantially all of Libbey’s existing indebtedness, to repay existing indebtedness of Crisa and to pay related fees, expenses and redemption premiums.

Webcast Information

Libbey will hold a conference call for investors on Wednesday, June 21, 2006, at 11 a.m. Eastern Standard Time. The conference call will be simulcast live on the Internet on http://www.libbey.com. To listen to the call, please go to the website at least 10 minutes early to register, download and install any necessary software. A replay will be available for 7 days after the conclusion of the call.

Libbey Inc.:

• is a leading producer of glass tableware in North America

• is expanding its international presence with facilities in Mexico, the Netherlands and Portugal and a facility in China planned to begin production in 2007;

• is a leading producer of tabletop products for the foodservice industry;

• exports to more than 90 countries.

Based in Toledo, Ohio, the Company operates glass tableware manufacturing plants in the United States in Louisiana and Ohio, as well as in Mexico, Portugal and the Netherlands. Its Crisa subsidiary, located in Monterrey, Mexico, is the leading producer of glass tableware in Mexico and Latin America. Its Royal Leerdam subsidiary, located in Leerdam, Netherlands, is among the world leaders in producing and selling glass stemware to retail, foodservice and industrial clients. Its Crisal subsidiary, located in Portugal, provides an expanded presence in Europe. Its Syracuse China subsidiary designs, manufactures and distributes an extensive line of high- quality ceramic dinnerware, principally for foodservice establishments in the United States. Its World Tableware subsidiary imports and sells a full-line of metal flatware and holloware and an assortment of ceramic dinnerware and other tabletop items principally for foodservice establishments in the United States. Its Traex subsidiary, located in Wisconsin, designs, manufactures and distributes an extensive line of plastic items for the foodservice industry. In 2005, Libbey Inc.’s net sales totaled $568.1 million.

EX-99.2

EXHIBIT 99.2

Libbey Inc.
300 Madison Ave
P.O. Box 10060
Toledo, OH 43699

N E W S     R E L E A S E

AT THE COMPANY:	AT FINANCIAL RELATIONS BOARD:
Kenneth Boerger	Lisa Fortuna
VP/Treasurer	Analyst Inquiries
(419) 325-2279	(312) 640-6779

FOR IMMEDIATE RELEASE
WEDNESDAY, JUNE 21, 2006

LIBBEY INC. ANNOUNCES DETAILS ON CRISA ACQUISITION
Provides Outlook For Second Quarter 2006, Full Year 2007 and Refinancing Details

TOLEDO, OHIO, JUNE 21, 2006—Libbey Inc. (NYSE: LBY) announced today additional details with respect to its acquisition on June 16, 2006, of the 51 percent of Vitrocrisa, S. de R.L. de C.V. and related entities (Crisa) that it did not already own and the refinancing of the existing indebtedness of Libbey and Crisa. Libbey also announced today its outlook for the second quarter of 2006 and for 2007.

Details with respect to Crisa acquisition

As previously announced, on June 16, 2006, we acquired the remaining 51 percent of Crisa for $80 million in cash. In addition, we assumed Crisa’s approximately $70 million of indebtedness, of which we were responsible for 49 percent prior to the acquisition by virtue of our ownership of 49 percent of Crisa.

Rationale for the acquisition:

The acquisition of Crisa, which, with approximately $192 million in sales in 2005, is the largest glass tableware manufacturer in Latin America and has approximately 60 percent of the glass tableware market in Mexico, is consistent with our strategy to expand our sales base. We believe that we can increase the profitability of Crisa’s sales in the Mexican market by reducing Crisa’s costs through a rationalization, currently underway, of Crisa’s operations, as well as through implementation of Libbey’s proprietary technology in Crisa’s manufacturing facilities. The rationalization will include the integration, over a period of three years, of Crisa’s two manufacturing facilities into one. We anticipate that the attendant reduction in fixed costs will approximate $13 to $15 million on an annualized basis beginning in the second half of 2007. We expect to incur

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a total of approximately $20 million in capital expenditures during 2006 and 2007 in connection with this rationalization. In connection with the planned consolidation of Crisa’s two principal manufacturing facilities, we expect to incur charges of approximately $16 million, primarily in the second quarter of 2006, for a write-down of property, plant and equipment, a write-off of inventory and an increase in cost of sales due to the step up of inventory resulting from step acquisition accounting.

In addition, with average hourly labor rates that are approximately 16 percent of our average hourly labor rates in the United States, Crisa provides us with the ability to reduce our overall cost of manufacturing. We expect that these favorable labor rates, together with favorable duties that are eliminated altogether beginning in January 2008 on glass tableware imported from Mexico into the U.S., will permit us to recapture certain low margin business in the U.S. that we previously abdicated.

Finally, we expect to improve Libbey’s profitability through the elimination of a series of profit-sharing payments that we historically have made to Vitro under a distribution agreement that was terminated in connection with our acquisition of Vitro’s 51 percent interest in Crisa. These payments totaled $3.6 million in 2005. We also anticipate that Crisa’s profitability will improve as a result of the transfer by Crisa to Vitro of pension liabilities associated with Crisa employees who had retired as of the closing date. This would have resulted in savings of $3.8 million in 2005. The elimination of a corporate tax payable to Vitro, pursuant to an administrative services agreement that was terminated at closing, in an amount equal to approximately 1.5 percent of Crisa’s net sales or $2.6 million in 2005. Reduced rent and other expenses would have resulted in additional savings of $1.2 million in 2005.

Summary terms of the acquisition:

Salient terms of the acquisition include the following:

• We paid $80 million for the remaining 51 percent equity interest in Crisa, and Vitro deposited $8 million of the purchase price into a Mexican trust to secure Vitro’s indemnification obligations.

• We assumed $70 million of Crisa’s existing debt, although we previously were liable for 49 percent of that amount as a result of our 49 percent ownership of Crisa.

• In connection with the acquisition, Crisa transferred to Vitro the pension liability for Crisa employees who had retired as of the closing date. We estimate that, by doing so, Crisa transferred to Vitro a liability of approximately $17 million at March 31, 2006.

• In connection with the acquisition, Crisa transferred to Vitro real estate (land and buildings) on which one of Crisa’s two manufacturing facilities is located, but Crisa retained the right to occupy the facility transferred to Vitro for up to three years. Concurrently, Vitro transferred to Crisa ownership of the land on which a leased, state-of-the-art distribution center is located, along with racks and conveyors that Crisa leased from an affiliate of Vitro.

• Vitro agreed to forgive $400 thousand of net intercompany payables owed by Crisa to Vitro for corporate services provided to Crisa during the term of the joint venture. Vitro agreed to defer receipt of approximately $8 million of intercompany payables

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	until August 15, 2006 and approximately $19.9 million of intercompany payables until January 15, 2008.
•	Vitro agreed to provide transition services to Crisa for a period of three years and agreed to fix the charges for those services for the first two years at 2005 rates. In addition, Crisa is entitled to a credit against these charges in an amount equal to $625 thousand per year for the first two years.
•	Vitro waived its right to receive profit sharing payments of approximately $1.1 million from Libbey with sales of Crisa products made by Libbey in the U.S. and Canada from February 1, 2006 through June 15, 2006 under the now-terminated distribution agreement.
•	Vitro agreed not to compete with Crisa anywhere in the world (with limited exceptions) for five years.

Libbey estimates that the purchase price paid by it to Vitro represents a multiple of 5.9 times Crisa’s pro forma EBITDA for the twelve months ended March 31, 2006 (calculated as follows):

Purchase price			$	80,000
Total debt	70,000
Additional amount incurred	51	%		35,700
Purchase price including additional debt incurred				115,700
Crisa last twelve months (LTM) ended March 31, 2006 EBITDA	16,173
Equity interest purchased	51	%		8,248
Pro forma adjustments (see detail below)	11,423
Portion to accrue to Libbey	100	%		11,423
Pro forma purchased Crisa LTM March 31, 2006 EBITDA			$	19,671
Purchase price (including debt) multiple of EBITDA				5.9 x

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Summary pro forma results of operations are as follows:

				Three months ended						LTM
	2005			3/31/2005			3/31/2006			3/31/2006
Libbey
Net sales	$	568,133		$	129,784		$	134,866		$	573,215
Earnings / (loss) before interest and tax (EBIT)		(10,450	)		943			4,521			(6,872	)
Add: special charges		27,236			2,997			—			24,239
Less: minority interest (5% for Crisal)		(34	)		(15	)		(96	)		(115	)
Adjusted historical EBIT		16,752			3,925			4,425			17,252
Pro forma adjustments:
Equity (earnings) / loss		4,100			(554	)		(1,065	)		3,589
Libbey adjusted pro forma EBIT		20,852			3,371			3,360			20,841
Depreciation & amortization		32,481			8,385			8,335			32,431
Libbey adjusted pro forma earnings before interest tax depreciation and amortization (EBITDA)	$	53,333		$	11,756		$	11,695		$	53,272
Crisa
Net sales	$	190,178		$	45,156		$	47,566		$	192,588
Earnings / (loss) before interest and tax (EBIT)		2,511			2,663			4,543			4,391
Pro forma adjustments:
Pension expense		3,779			945			1,319			4,153
Profit sharing expense		3,556			934			780			3,402
Vitro corporate tax		2,593			615			643			2,621
Rent expense		939			235			235			939
Other		274			(52	)		(18	)		308
Total Crisa pro forma adjustments		11,141			2,677			2,959			11,423
Crisa pro forma EBIT		13,652			5,340			7,502			15,814
Depreciation & amortization		12,341			3,613			3,054			11,782
Crisa pro forma earnings before interest tax depreciation and amortization (EBITDA)	$	25,993		$	8,953		$	10,556		$	27,596
Net sales adjustments and eliminations		(31,186	)		(7,724	)		(6,787	)		(30,249	)
Libbey consolidated pro forma
Pro forma net sales	$	727,125		$	167,216		$	175,645		$	735,554
Pro forma adjusted EBIT	$	34,504		$	8,711		$	10,862		$	36,655
Pro forma adjusted EBITDA	$	79,326		$	20,709		$	22,251		$	80,868

It is important to note that the above pro forma results include only contractual related adjustments and do not include the following:

• Benefits related to planned manufacturing rationalization of Crisa’s operations;

• Benefits related to implementation of Libbey’s proprietary furnace, manufacturing and mold technologies;

• Other expected synergies;

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• Costs (expense and capital expenditures) related to the planned manufacturing rationalization of Crisa’s operations; and

• Anticipated tax benefits related to the acquisition and related refinancing.

Outlook for second quarter 2006

Due to the complexities related to the acquisition occurring mid-month in the last month of the quarter and in an effort to provide for a clean comparison with the prior year quarter, the Company is providing the following guidance for the second quarter of 2006 excluding the impact of the Crisa acquisition and related refinancing.

Libbey (including equity earnings from Crisa and excluding impact of acquisition and related refinancing):

We expect net sales to increase approximately 3.5 to 4.5 percent over the prior year to approximately $150 to $151 million. Net sales are expected to be up over the prior year across all channels of distribution with the exception of Syracuse China product sales, which are expected to be down as a result of the 38 day work stoppage at Syracuse China in the second quarter of 2006. EBIT is expected to be approximately $8.5 million, basically flat compared to prior year (excluding special charges of $6.4 million recorded in the prior year), but in line with budget. Depreciation and amortization will also be similar to last year, or approximately $8.1 million. EBIT was negatively impacted by manufacturing downtime in Shreveport related to a planned furnace rebuild, the Syracuse China work stoppage described above, increased pension and postretirement welfare expense, and increased natural gas costs.

With these projected second quarter results, first half 2006 net sales and EBIT will be up approximately 4.0 percent over the prior year.

The construction of our new glass tableware plant in China is progressing on time and on budget. As previously stated, we anticipate production to start in early 2007.

Crisa (total business, excluding impact of acquisition and related refinancing):

Although we will account for our investment in Crisa under the equity method from April 1 through June 15, 2006 we expect net sales for Crisa during the second quarter to be approximately $49 million, basically flat as compared to the prior year. We expect EBIT for the second quarter of 2006 to increase to approximately $3 million compared to $800 thousand in the second quarter of 2005. Factors contributing to the $2.2 million increase in EBIT over the prior year quarter are improved sales mix, increased production activity, and a translation gain vs. a translation loss in the prior year (driven by deprecation of the peso), partially offset by higher natural gas costs.

With these projected second quarter results, first half 2006 net sales will be up approximately 2.0 percent over the prior year and EBIT will be up approximately 98.0 percent over the prior year.

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We expect to provide additional information with respect to the outlook for the remainder of 2006 including the impact of the Crisa acquisition and our refinancing, when we release our financial results for the second quarter. However, during the second half of 2006 we expect to obtain the full year benefit of the City of Industry, California plant closure completed in the first quarter of 2005. As well as the full year benefit (estimated to be $4.5 million) of the 10 percent reduction in our North American salary workforce implemented in the first half of 2005. In addition, we do not expect 2006 to be impacted by the non-recurring $6.8 million increase in workers compensation expense in 2005 or the non-recurring $9.1 million expense related to our planned inventory reduction in the fourth quarter of 2005.

Outlook for 2007

As announced on April 3, 2006, we anticipate 2007 net sales in excess of $800 million and 2007 EBIT of $55 to $65 million. We expect that depreciation and amortization in 2007 will be approximately $40 million, resulting in estimated EBITDA of $95 to $105 million. Debt is projected to increase from the $474.9 million level at closing on June 16, 2006 to approximately $535 million at its peak during 2007. Contributing to the anticipated increase in debt during 2007 are capital expenditures required to complete the construction of our new glass tableware facility in China and capital expenditures to rationalize Crisa’s manufacturing operations, as well as an anticipated $35 million in pension and retiree welfare cash funding requirement primarily related to the expiration of the pension funding relief provisions at the end of 2005.

Details with respect to refinancing

The following table summarizes the Company’s new debt structure:

	Maturity					Balance at
	Date		Interest Rate			June 16, 2006
$150 million asset based loan (ABL) revolving credit facility		2010	Libor + 175 bps			$	44,100
Senior secured notes, issued at 98% of par		2011	Libor (six month) + 700 bps				306,000
Senior subordinated secured pay-in-kind (PIK) notes, issued at 98% of par		2011	16% (applied against the accumulated principal and accrued PIK interest)				102,000
China construction loan		2012 — 2014	Floating (approximately 6% at closing)				15,000
Laredo warehouse mortgage		2006 — 2016		6	%		2,100
Capital leases and other debt		2006 — 2009	Floating (approximately 6% at closing)				5,700
Weighted average interest rate / total debt at June 16, 2006				12.2	%	$	474,900

Note: in addition to interest on the debt balances disclosed above interest expense will include amortization of estimated finance fees of $14 million, amortization of original issue discount on senior secured notes of $6.1 million, amortization of original issue discount and discount attributable to estimated warrant value of $3.8 million, commitment fees of 25 bps on unused portion of ABL facility, and outstanding letter of credit fees.

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We believe that the new debt structure described above provides us with sufficient flexibility to accomplish our strategic initiates. Included in the second quarter 2006 results will be a write-off of unamortized finance fees for both Libbey and Crisa of approximately $3.5 million, which will be classified as interest expense.

Concluding comments

In conclusion John F. Meier, chairman and chief executive officer, provided the following comments, “We are pleased to complete the Crisa acquisition and are very excited about the long-term strategic value it will provide to our Company. Although costly, the new debt structure provides us the necessary capital to rationalize Crisa’s operations, while continuing to invest in our core U.S. and European operations. The debt agreements contain limited restrictions on our ability to operate our business, providing us with ample flexibility as we continue to improve our results though LEAN and other process improvement initiatives and complete the construction of our new glass tableware plant in China.”

Webcast information

Libbey will hold a conference call for investors on Wednesday, June 21, 2006, at 11 a.m. Eastern Daylight Time. The conference call will be simulcast live on the Internet on www.libbey.com and http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=64169&eventID=1338671. To listen to the call, please go to the website at least 10 minutes early to register, download and install any necessary software. A replay will be available for 30 days after the conclusion of the call.

This press release includes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements regarding (i) the sales and EBITDA projections for the Company and Crisa combined businesses in 2007; and (ii) the Company’s expectations regarding transition, integration and severance costs, as well as the amount and timing of anticipated synergies. Such statements only reflect the Company’s best assessment at this time and are indicated by words or phrases such as “goal,” “expects,” “ believes,” “will,” “estimates,” “anticipates,” or similar phrases. Investors are cautioned that forward-looking statements involve risks and uncertainty, that actual results may differ materially from such statements, and that investors should not place undue reliance on such statements. These forward-looking statements may be affected by the risks and uncertainties in the Company’s business. This information is qualified in its entirety by cautionary statements and risk factor disclosures contained in the Company’s Securities and Exchange Commission filings, including the Company’s report on Form 10-K filed with the Commission on March 16, 2006, and current report on Form 8-K filed with the Commission on May 15, 2006. Important factors potentially affecting performance include but are not limited to: results of the last two weeks of the second quarter of 2006, increased competition from foreign suppliers endeavoring to sell glass tableware in the United States and Mexico, including the impact of lower duties for imported products; major slowdowns in the retail, travel or entertainment industries in the United States, Canada, Mexico and Western Europe, caused by terrorist attacks or otherwise; significant increases in per unit costs for natural gas, electricity, corrugated packaging, and other purchased materials; higher interest rates that increase the Company’s borrowing costs; protracted work stoppages related to collective bargaining agreements; increases in expense associated with higher medical costs, increased pension expense associated with lower returns on

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pension investments and increased pension obligations; devaluations and other major currency fluctuations relative to the U.S. dollar and the Euro that could reduce the cost competitiveness of the Company’s products compared to foreign competition; the effect of high inflation in Mexico and exchange rate changes to the value of the Mexican peso and the earnings and cash flow of Crisa, expressed under U.S. GAAP; the inability to achieve savings and profit improvements at targeted levels in the Company’s operations or within the intended time periods; whether the Company completes any significant acquisition, and whether such acquisitions can operate profitably. With respect to its expectations regarding the Crisa acquisition, these factors also include, the ability to successfully integrate the operations of Crisa and recognize the expected synergies and the ability of Vitro to supply necessary services to Crisa, and our ability to capitalize on the expanded platform that the acquisition of Crisa will provide.

Libbey Inc.:

• is the largest manufacturer of glass tableware in North America and one of the largest glass tableware manufacturers in the world;

• has expanded its international presence with facilities in Mexico, the Netherlands, Portugal, and a facility in China planned to begin production in 2007;

• supplies products to foodservice, retail, industrial and business-to-business customers in over 90 countries.

• is the leading manufacturer of tabletop products for the U.S. foodservice industry.

Based in Toledo, Ohio, the Company operates glass tableware manufacturing plants in the United States in Louisiana and Ohio, as well as in Mexico, Portugal and the Netherlands. Its Crisa subsidiary, located in Monterrey, Mexico, is the leading producer of glass tableware in Mexico and Latin America. Its Royal Leerdam subsidiary, located in Leerdam, Netherlands, is among the world leaders in producing and selling glass stemware to retail, foodservice and industrial clients. Its Crisal subsidiary, located in Portugal, provides an expanded presence in Europe. Its Syracuse China subsidiary designs, manufactures and distributes an extensive line of high-quality ceramic dinnerware, principally for foodservice establishments in the United States. Its World Tableware subsidiary imports and sells a full-line of metal flatware and holloware and an assortment of ceramic dinnerware and other tabletop items principally for foodservice establishments in the United States. Its Traex subsidiary, located in Wisconsin, designs, manufactures and distributes an extensive line of plastic items for the foodservice industry. In 2005, Libbey Inc.’s net sales totaled $568.1 million.

EX-99.3

EXHIBIT 99.3

Vitrocrisa Holding, S. de R.L. de C.V.
and Subsidiaries, Crisa Libbey, S.A. de
C.V. and Crisa Industrial, L.L.C. (all
51% Owned Subsidiaries’ of Vitro, S.A.
de C.V.)

Combined Financial Statements as of
and for the Year Ended December 31,
2005 and Report of Independent
Registered Public Accounting Firm
Dated April 14, 2006

Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries,

Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C.

Table of contents

Report of Independent Registered Public Accounting Firm	F-69
Combined Balance Sheets at December 31, 2005 (audited)	F-70
Combined Statements of Operations for the year ended December 31, 2005 (audited)	F-71
Combined Statements of Changes in Stockholders’ Equity for the year ended December 31, 2005 (audited)	F-72
Combined Statements of Cash Flows for the year ended December 31, 2005 (audited)	F-73
Notes to Combined Financial Statements at December 31, 2005 (audited)	F-74
Condensed Combined Balance Sheets as of March 31, 2006 (unaudited)	F-88
Condensed Combined Statements of Operations March 31, 2006 and 2005 (unaudited)	F-89
Condensed Combined Statements of Cash Flows March 31, 2006 and 2005 (unaudited)	F-90
Notes to Condensed Combined Financial Statements For the Three Month Periods Ended March 31, 2006 and March 31, 2005 (unaudited)	F-91

Report of Independent Registered Public Accounting Firm

To the stockholders of Vitrocrisa Holding, S. de R.L. de C.V. and subsidiaries,

Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C.

Monterrey, N.L., México

We have audited the accompanying combined balance sheet of Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries, Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C. (the “Companies”) as of December 31, 2005 and the related combined statements of operations, changes in stockholders’ equity and cash flows for the year then ended (all expressed in thousands of U.S. dollars). These financial statements are the responsibility of the Companies’ management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companies’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, such combined financial statements present fairly, in all material respects, the combined financial position of the Companies as of December 31, 2005, and the combined results of their operations and their combined cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Galaz, Yamazaki, Ruiz Urquiza, S.C.

Member of Deloitte Touche Tohmatsu

C.P.C. Ernesto Cruz Velázquez de León

Monterrey, N.L. México

April 14, 2006

Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries,

Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C.

combined balance sheet

As of December 31, 2005 (Thousands of U.S. dollars)

Assets
	Cash and cash equivalents			$	3,453
	Trade receivables—net				20,964
	Recoverable taxes				9,975
	Receivables from affiliates				1,458
	Other receivables				3,758
	Inventories				40,494
			Total current assets		80,102
	Property, plant and equipment—net				82,593
	Intangible employee retirement obligation asset				2,545
	Restricted cash				2,231
	Other assets				2,393
	Deferred income taxes				5,790
			Total assets	$	175,654
Liabilities
	Trade payables			$	19,845
	Current portion of long-term debt				8,892
	Notes payable to affiliates (Note 10)				1,947
	Accounts payable to affiliates				17,447
	Accrued expenses				10,470
	Deferred income taxes				7,869
	Sundry creditors				6,079
			Total current liabilities		72,549
	Long-term debt				56,639
	Employee retirement obligations				35,636
			Total long-term liabilities		92,275
			Total liabilities		164,824
Stockholders’ equity
	Contributed capital:
		Crisa Industrial, L.L.C.			585
		Vitrocrisa Holding, S. de R.L. de C.V.			69,602
		Crisa Libbey, S.A. de C.V.			2,656
					72,843
		Accumulated other comprehensive loss			(9,924	)
		Accumulated deficit			(52,089	)
			Total stockholders’ equity		10,830
			Total liabilities and stockholders’ equity	$	175,654

See accompanying notes to the combined financial statements.

Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries,

Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C.

combined statement of operations

For the Year Ended December 31, 2005 (Thousands of U.S. dollars)

Net sales		$	190,178
Cost of sales			161,670
	Gross profit		28,508
Selling, general and administrative expenses			24,713
	Operating income		3,795
Remeasurement loss			1,284
	Earnings before interest and taxes		2,511
Interest expense—net			8,423
	Loss before income tax		(5,912	)
Income tax expense			1,896
	Net loss	$	(7,808	)

See accompanying notes to the combined financial statements.

Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries,

Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C.

combined statement of changes in stockholders’ equity

For the Year Ended December 31, 2005 (Thousands of U.S. dollars)

		Contributed capital
				Vitrocrisa		Crisa		Accumulated
		Crisa		Holding,		Libbey,		other						Total
		Industrial,		S. de R.L.		S.A. de		comprehensive			Accumulated			stockholders’
		L.L.C.		de C.V.		C.V.		income			deficit			equity
Balance at December 31, 2004		$	585	$	69,602	$	2,656	$	(9,610	)	$	(43,261	)	$	19,972
	Dividend payments											(1,020	)		(1,020	)
	Comprehensive loss								(314	)		(7,808	)		(8,122	)
Balance at December 31, 2005		$	585	$	69,602	$	2,656	$	(9,924	)	$	(52,089	)	$	10,830

See accompanying notes to the combined financial statements.

Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries,

Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C.

combined statement of cash flows

For the Year Ended December 31, 2005 (Thousands of U.S. dollars)

Operating activities:
	Net loss			$	(7,808	)
	Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
		Depreciation and amortization			12,341
		Provision for employee retirement obligations			2,616
		Remeasurement loss			1,284
		Loss on sale of fixed assets			259
		Deferred income taxes			(3,054	)
		Changes in operating assets and liabilities:
			Decrease in trade payables		(6,077	)
			Decrease in trade receivables		4,943
			Decrease in inventories		1,474
			Other receivables from affiliates		4,675
			Recoverable income tax and value added tax		(641	)
			Rebuild expenditures		(6,533	)
			Accounts payable to affiliates		6,167
			Accrued expenses		4,122
			Other		(2,071	)
			Net cash provided by operating activities		11,697
Investing activities:
	Proceeds from the sale of property, plant and equipment				151
	Acquisition of property, plant and equipment				(8,941	)
	Restricted cash				(47	)
	Other assets				(189	)
			Net cash used in investing activities		(9,026	)
Financing activities:
	Proceeds from notes payable				10,000
	Proceeds from long-term debt				27,001
	(Repayment to) proceeds from affiliates				(300	)
	Repayment of notes payable				(10,000	)
	Repayment of long-term debt				(28,381	)
	Dividend payments				(1,020	)
			Net cash used in financing activities		(2,700	)
Effect of exchange rate changes on cash					617
			Net increase in cash and cash equivalents		588
Cash and cash equivalents at beginning of year					2,865
Cash and cash equivalents at end of year				$	3,453
Supplemental disclosure of cash flow information:
	Cash paid during the year for:
			Interest	$	4,691
			Income taxes	$	2,720

See accompanying notes to the combined financial statements.

Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries,

Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C.

notes to combined financial statements

For the Year Ended December 31, 2005 (Thousands of U.S. dollars)

1. Nature of business, basis of presentation and foreign currency financial statements

Nature of business— Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries, Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C. (the “Companies”) are all 51% owned by Vitro, S.A. de C.V. (“Vitro”) and 49% by Libbey Inc. (“Libbey”). The Companies are under common ownership and common control and as described below their financial statements have been combined for reporting purposes.

The Companies are leading manufacturers and distributors of high quality glassware, primarily serving such markets as Mexico, the United States, Canada, Europe, the Middle East, and other regions of Latin America.

The Companies manufacture and distribute an extensive line of products including glass tableware, kitchen, industrial and ornamental products to discount retailers, department stores, retail and food service distributors and food, beverage and appliance companies.

Basis of presentation

a) Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries and Crisa Libbey, S.A. de C.V. maintain their books and records in Mexican pesos and prepare financial statements in accordance with accounting principles generally accepted in Mexico (“MEX GAAP”). The accompanying combined financial statements, prepared for purposes of inclusion in the financial statements of Libbey Inc. by the equity method, have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and have been remeasured into U.S. dollars as discussed below.

Crisa Industrial, L.L.C. (“Crisa Industrial”) is a Company whose principal headquarters are located in the United States of America. Crisa Industrial maintains its books and records in U.S. dollars and prepares financial statements in accordance with accounting principles generally accepted in the United States of America.

b) The combined financial statements of the Companies include those of Crisa Industrial, Crisa Libbey, S.A. de C.V. and the consolidated statements of Vitrocrisa Holding, S. de R.L. de C.V. and its subsidiaries, which are the following:

Company	Ownership percentage
Vitrocrisa, S. de R.L. de C.V.		99.99%
Vitrocrisa Comercial, S. de R.L. de C.V.		99.99%

Intercompany balances and transactions have been eliminated in these combined financial statements.

Foreign currency financial statements— The functional currency of the Companies is the U.S. dollar. As a result, the financial statements of Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries and Crisa Libbey, S.A. de C.V. have been remeasured from Mexican pesos into

U.S. dollars using (i) current exchange rates for monetary asset and liability accounts, (ii) historical exchange rates for nonmonetary asset and liability accounts and paid-in capital, (iii) historical exchange rates for revenues and expenses associated with nonmonetary assets and liabilities and (iv) the weighted average exchange rate of the reporting period for all other revenues and expenses. In addition, foreign currency transaction gains and losses resulting from U.S. dollar denominated transactions are eliminated. The resulting remeasurement gain/loss is recorded in the results of operations.

The combined financial statements should not be construed as representations that Mexican pesos have been, could have been or may in the future be converted into U.S. dollars at such rates or any other rates.

Relevant exchange rates used in the preparation of the financial statements were as follows (Mexican pesos per one U.S. dollar):

	2005
Current exchange rate at December 31	$	10.6344
Weighted average exchange rate for the year		10.8786

2. Significant accounting policies

A summary of the significant accounting policies used in the preparation of the accompanying combined financial statements follows:

Cash equivalents— The Companies consider all highly liquid short-term investments with original maturities of ninety days or less, consisting primarily of Mexican Government Treasury Bonds and money market instruments, to be cash equivalents.

Inventories— Inventories are stated at the lower of cost or market value. Cost is determined using the first-in, first-out method.

Concentration of credit risk— The Companies sell products to customers primarily in the retail industry. The Companies conduct periodic evaluations of their customers’ financial condition and generally do not require collateral. The Companies do not believe that significant risk of loss from a concentration of credit risk exists given the large number of customers that comprise their customer base and their geographical dispersion. The Companies also believe that their potential credit risk is adequately covered by the allowance for doubtful accounts of $1,220 in 2005.

Property, plant and equipment— Property, plant and equipment are recorded at acquisition cost, net of accumulated depreciation and amortization. Cost includes major expenditures for improvements and replacements, which extend useful lives or increase capacity and interest costs associated with significant capital additions. Routine maintenance costs are expensed as incurred.

Depreciation and amortization are calculated using the straight-line method, based on the estimated useful lives of the related assets, as follows:

	Estimated
	useful life
	(Years)
Buildings		10 to 40
Machinery and equipment		3 to 20

Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of an asset is not recoverable when the estimated future undiscounted cash flows expected to result from the use of the asset are less than the carrying value of the asset. The Company measures an impairment loss as the difference between the carrying value of the asset and its fair value.

Major maintenance activities—The Companies annually prepare a technical study, which is used to determine the estimated rebuild cost for each of their glass producing furnaces, the estimated date of construction and rebuild and the anticipated dates of future rebuilds. The Companies accrue a monthly amount proportional to the estimated amount of the rebuild. At that time, the actual cost of the rebuild is charged to the accrual, with any deficiency or excess charged or credited to expense. The cost of the next rebuild is then estimated based on the technical study, and accrued to that rebuild, at which time the process is repeated.

Restricted cash—The Companies hold restricted cash as collateral for certain of their debt instruments, which is presented as restricted cash in the combined balance sheets.

Derivative financial instruments—The Companies record all derivative financial instruments at fair value, regardless of the purpose or intent for holding them. The accounting for changes in fair value of the derivatives varies, depending if the derivative is considered to be a hedge for accounting purposes, and whether that hedged instrument is a fair value, cash flow, or a foreign currency hedge.

The Companies primarily use interest rate swaps to manage their exposure to fluctuations in interest rates. It is the Companies’ policy to not enter into derivative financial instruments for speculative purposes.

Derivative financial instruments, although considered to be an effective hedge from an economic perspective, have not been designated as a hedge for accounting purposes. Such contracts are recognized in the balance sheet at fair value with changes in the fair value recognized in earnings as a component of interest expense, concurrently with the change in fair value of the underlying assets and liabilities.

As of December 31, 2005 the Company did not have any derivative instruments outstanding.

Deferred income taxes and statutory employee profit sharing—The Companies apply the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes”. As required by this standard, the Companies recognize deferred income tax and statutory employee profit sharing balances for the future consequences of temporary differences between the financial statement carrying amounts of assets and liabilities and their respective income tax or employee statutory profit sharing bases, measured using enacted rates. The effects of changes in the statutory rates are accounted for in the period that

includes the enactment date. Deferred income tax assets are also recognized for the estimated future effects of tax loss carryforwards and asset tax credit carryforwards. Deferred income tax assets are reduced by any benefits that, in the opinion of management, more likely than not will not be realized.

Employee retirement obligations—In accordance with Mexican Labor Law, the Companies, other than Crisa Industrial, provide seniority premium benefits to its employees under certain circumstances. These benefits consist of a one-time payment equivalent to 12 days wages for each year of service (at the employee’s most recent salary, but not to exceed twice the legal minimum wage), payable to all employees with 15 or more years of service, as well as to certain employees terminated involuntarily prior to the vesting of their seniority premium benefit. The Companies also have a pension plan to provide defined benefits to certain qualifying employees.

Statutory seniority premiums and pension plans for all personnel are considered as costs in the periods in which services are rendered. Periodic costs associated with these benefits are calculated in accordance with SFAS No. 87, “Employer’s Accounting for Pensions,” based on actuarial computations using the projected unit credit method. The prior service cost is amortized over the average period required for workers to reach their retirement age. The seniority premium and pension plans are not funded.

Accumulated other comprehensive loss—Accumulated other comprehensive loss includes the minimum pension liability adjustment, net of the intangible pension asset.

Revenue recognition—Revenues and related costs are recognized upon transfer of ownership, which generally coincides with the billing and shipment of products to customers in satisfaction of orders. Specifically, revenues are recognized when all of the following criteria are met: persuasive evidence of an arrangement exists, the fee is fixed or determinable, product delivery has occurred, there are no further obligations to customers, and collectability is probable.

Revenues are recorded net of sales returns. Historically sales returns have been insignificant and therefore sales returns are recorded when goods are returned to the Companies as a reduction of sales and cost of goods sold at the time of the return.

Foreign currency transactions—Transactions denominated in foreign currencies are recorded at the rate of exchange in effect at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are converted into the Companies’ local currency at the rate of exchange in effect at the balance sheet date; the effect of changes in exchange rates is recorded in the results of operations.

Use of estimates—The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes the estimates and assumptions used in the preparation of these combined financial statements were appropriate in the circumstances, actual results could differ from those estimates and assumptions.

New accounting standards—SFAS No. 123(R), “Share-Based Payment”. This statement eliminates the option to apply the intrinsic value measurement provisions of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” to stock compensation awards issued to employees. Rather, SFAS No. 123(R) requires entities to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair

value of the award. That cost will be recognized over the period during which an employee is required to provide services in exchange for the award—the requisite service period (usually the vesting period). SFAS No. 123(R) applies to all awards granted after the required effective date and to awards modified, repurchased, or cancelled after that date. The Companies do not grant stock options to employees. The Companies will adopt this accounting standard on January 1, 2006; however, management does not believe it will have a significant impact on the combined financial position or results of operations.

SFAS No. 151, “Inventory Costs”. SFAS No. 151 is an amendment to Accounting Research Bulletin No. 43. This statement clarifies that the abnormal amounts of the idle capacity expense, freight, handling costs and wasted materials should be recognized as current period charges and requires the allocation of fixed production overhead cost to inventory based on the normal capacity of the production facilities. This guidance is effective for inventory costs incurred during fiscal years beginning after June 15, 2005, with earlier application allowed for inventory costs incurred during fiscal years beginning after November 23, 2004. The Companies will adopt this accounting standard on January 1, 2006; however, management does not believe it will have a significant impact on the combined financial position or results of operations.

SFAS No. 154, “Accounting Changes and Error Corrections—a replacement of APB Opinion No. 20 and FASB Statement No. 3”. In May 2005, the FASB issued SFAS No. 154. This statement replaces APB Opinion 20, “Accounting Changes,” and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements,” and changes the requirements for the accounting for and reporting a change in an accounting principle. This statement applies to all voluntary changes in accounting principle and also to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specify transition provisions. SFAS No. 154 requires retrospective application of changes in accounting principle to prior period financial statements instead of recognizing voluntary changes in accounting principle by including the cumulative effect in net income of the period of the change. The Companies will adopt this accounting standard on January 1, 2006; however, management does not believe it will have a significant impact on the combined financial position or results of operations.

3. Inventories

The breakdown of inventories at December 31 is summarized as follows:

	2005
Finished products	$	33,845
Raw materials		1,223
Packaging materials		1,164
		36,232
Spare parts		1,709
Refractory		2,227
Inventory in transit		326
	$	40,494

4. Property, plant and equipment

Property, plant and equipment at December 31 are summarized as follows:

	2005
Land	$	2,383
Buildings		23,800
Machinery and equipment		187,768
Accumulated depreciation		(137,008	)
		76,943
Construction in progress		5,650
	$	82,593

5. Financial instruments

The carrying amounts of the Companies’ cash equivalents, accounts receivable, accounts payable and current notes payable approximate fair value because they have relatively short-term maturities and bear interest at rates tied to market indicators, as appropriate. Substantially all of the Companies’ long-term debt consists of debt instruments that bear interest at variable rates tied to market indicators and the fair value of such debt approximates its carrying value.

6. Long-term debt

As of December 31 long-term debt consists of the following:

	2005
Senior secured term loan guaranteed by Vitro, denominated in U.S. dollars, interest based on LIBOR plus 2.875%, principal payable in quarterly installments through 2009	$	30,240
Senior unsecured term loan guaranteed by Libbey, denominated in U.S. dollars, interest based on LIBOR plus 2.125%, principal payable in quarterly installments through 2007		23,000
Secured loan guaranteed by Vitro, denominated in U.S. dollars, interest based on LIBOR plus 2.875%, principal payable in semi-annual installments through 2007		9,000
Affiliate loan from Servicios y Operaciones Financieras Vitro, S.A. denominated in Mexican pesos, interest based on TIIE plus 2.00%, principal payable in 2008		2,999
Unsecured loan guaranteed by Vitro, denominated in Investment Units, payable in Mexican pesos, interest rate of 8.75%, principal payable monthly through 2006		292
Total long-term debt		65,531
Less: current portion of long-term debt		(8,892	)
Non-current portion of long-term debt	$	56,639

As of December 31, 2005, the interest rates of LIBOR and TIIE were 4.06% and 8.60%, respectively.

As of December 31, 2005, maturities of long-term debt are as follows:

Year
2006	$	8,892
2007		38,940
2008		12,659
2009		5,040
	$	65,531

Certain of the Companies’ long-term debt agreements contain restrictions and covenants that require the maintenance of various financial ratios. The Companies were in compliance with these restrictions and covenants as of December 31, 2005.

Additionally, $62,240 of debt is collateralized by cash, of which $2,231 is presented as restricted cash in the combined balance sheet as of December 31, 2005, respectively.

7. Employee retirement obligations

At December 31:		2005
Accumulated benefit obligation		$	35,195
Projected benefit obligation		$	48,828
Unrecognized items			29,521
	Net projected liability		19,307
Additional liability classified as an intangible seniority premium and pension asset			2,545
Additional liability classified in accumulated other comprehensive loss			13,784
Liability recognized in the balance sheet		$	35,636
Weighted—average assumptions used to determine benefit obligations and net periodic benefit at December 31:
	Discount rate		5.75	%
	Rate of compensation increase		0.00	%
Periodic pension cost for the year ended December 31:
	Service cost	$	1,109
	Interest cost		2,604
	Net amortization and deferral		2,820
	Periodic pension cost	$	6,533
Change in projected benefit obligation:
	Obligation at the beginning of the year	$	42,881
	Service cost		1,109
	Interest cost		2,604
	Actuarial losses		6,199
	Benefits paid		(3,965	)
	Obligation at the end of the year	$	48,828

Expected benefit payments are as follows:

2006	$	3,778
2007		3,829
2008		3,937
2009		4,082
2010		4,026
2011—2015		21,075

Expected benefit payments are based on the same assumptions used to measure the benefit obligations and include estimated future employee service.

8. Stockholders’ equity:

a) Capital shares of Vitrocrisa Holding, S. de R.L. de C.V. at no par value, authorized, issued and outstanding are described as follows:

	Class I				Class II
	Fixed capital				Variable capital
	Number		Percentage		Number		Percentage
Series	of shares		of shares		of shares		of shares		Total
A		1		1.89%		1		49.11%		51%
B		1		1.81%		1		47.19%		49%
		2		3.70%		2		96.30%		100%

b) Common stock of Crisa Libbey, S.A. de C.V. consists of 50,000 ordinary shares authorized, issued and outstanding with nominal value of one Mexican peso per share as follows:

	Fixed capital		Variable capital		Total
Series	number of shares		number of shares		number of shares
A		25,500				25,500
B				24,500		24,500
		25,500		24,500		50,000

c) The contributed capital and percentage of ownership of Crisa Industrial, L.L.C. is described as follows:

			Percentage of
Partner	Contributed capital		ownership
Crisa Corporation	$	298		51%
LGA 4 Corp.		287		49%
	$	585		100%

d) At the partners’ meeting of Crisa Industrial, L.L.C. it was agreed to declare dividends, paid on July 26, 2005 in the amount of $1,020

e) Stockholders’ equity of the Mexican companies, except restated paid-in capital and tax retained earnings, will be subject to a dividend tax, payable by such companies, in the event of distribution. In 2005, the rate was 30%; it will decrease to 29% in 2006 and 28% in 2007. Any income tax paid on such distribution may be credited against future income tax payable by the Mexican companies in the year in which the dividend tax is paid and in the following two years. As of December 31, 2005 the stockholders’ equity tax account corresponding to the contributed capital account was $192,146 and the net tax income account was $22,629.

f) Stockholders’ equity for the minimum pension liability adjustment is presented net of the deferred tax effect of $3,859, for the year ended December 31, 2005.

9. Income and asset taxes and statutory employee profit sharing

a) Statutory income tax rate—In accordance with Mexican tax law, the Mexican companies are subject to income tax (ISR) and asset tax (“IMPAC”). ISR is computed taking into consideration the taxable and deductible effects of inflation, such as depreciation calculated on restated asset values. Taxable income is increased or reduced by the effects of inflation on certain monetary assets and liabilities through the inflationary component, which is similar to the gain or loss from monetary position.

On December 1, 2004, certain amendments to the ISR and IMPAC laws were enacted and were effective in 2005. The most significant amendments were as follows: a) the ISR rate was reduced to 30% in 2005 and will be further reduced to 29% in 2006 and 28% in 2007 and thereafter (the rate in 2004 was 33%); b) for income tax purposes, cost of sales is deducted instead of inventory purchases and related conversion costs; c) taxpayers had the ability to elect, in 2005, to ratably increase taxable income over a period from 4 to 12 years by the tax basis of inventories as of December 31, 2004 determined in conformity with the respective tax rules; when electing to amortize the tax basis of inventories into taxable income, any remaining tax balance of inventories that had not been deducted and any unamortized tax loss carryforwards were deducted from the tax basis of the December 31, 2004 inventory balance; as a consequence, cost of sales of such inventories were deducted; d) in 2006, employee statutory profit sharing paid will be fully deductible; and e) bank liabilities and liabilities with foreign entities are included to determine the IMPAC taxable base.

IMPAC is similar to an alternative minimum tax, under Mexican tax law. The asset tax is calculated by applying 1.8% to the Company’s asset position, as defined in the law, and is payable to the extent it exceeds income taxes payable for the same period. Asset taxes paid may be used to offset future income taxes payable in the following 10 years if certain conditions in the tax law are met.

Crisa Industrial is exempt from paying taxes for U.S. income tax purposes. As such, all income taxes are paid by Crisa Corporation (a wholly owned subsidiary of Vitro) and LGA (a wholly owned subsidiary of Libbey), and therefore no income taxes are either accrued for or paid by the Crisa Industrial.

b) Income tax expense for the year ended December 31, were comprised of the following:

	2005
Income tax:
Current	$	4,950
Deferred		(3,054	)
	$	1,896

c) At December 31, 2005, the components of deferred income tax assets (liabilities) consist of the following:

		2005
Reserves		$	250
Inventories			(9,490	)
Other			1,371
	Net current liability	$	(7,869	)
Employee retirement obligations		$	8,780
Fixed assets			(4,248	)
Tax loss carryforwards(1)			1,258
	Net noncurrent asset	$	5,790

(1)  Carryforwards—At December 31, 2005, the Companies have net operating loss (“NOL”) carryforwards, which are available to offset future taxable income, as follows:

	NOL		Year of
Year Generated	Carryforwards		Expiration
1998	$	2,065		2008
1999		147		2009
2001		199		2011
2002		1,632		2012
2003		374		2013
2004		74		2014
2005		3		2015
	$	4,494

d) To determine deferred ISR at December 31, 2005, the Companies applied the different tax rates that will be in effect beginning in 2006 to temporary differences according to their estimated dates of reversal. The result derived from applying the different tax rates is shown in the table above under effect of change in statutory income tax rate. In addition, in accordance with tax regulations in effect as of 2005, the Companies’ established a tax basis of inventory of $40,919 at December 31, 2005, based on inventory turnover, which they will ratably taken into taxable income over an 11-year period beginning in 2005. Accordingly, the initial effect of the new regulation of no longer deducting inventory purchases is deferred.

The effective income tax rate for the year ended December 31, 2005 differs from the Mexican statutory income tax rate as follows:

	2005
Mexican statutory income tax rate		30.00	%
Effect of change in statutory income tax rate and remeasurement		(55.88	)
Effect of Crisa Industrial		(2.69	)
Other		(3.50	)
Effective income tax rate		(32.07	)%

Statutory employee profit sharing—Statutory employee profit sharing is only calculated at Vitrocrisa, S. de R.L. de C.V. which as it is the only Mexican company with employees. Statutory employee profit sharing was determined by applying the statutory rate of 10% to the profit sharing base determined in accordance with the applicable law No obligation has been recorded for the year ended December 31, 2005.

10. Balances and transactions with affiliated companies:

The principal balances and transactions with affiliated companies not shown separately in the combined financial statements as of December 31, 2005 are as follows:

		2005
Balances as of December 31:
	Trade receivables	$	129
	Trade payables		3,412
	Net sales		29,067
	Cost of sales		5,194
	Operating expenses		3,459
	Interest expense (income)		1,496

Net sales disclosed above were primarily to Crisa Texas Limited a wholly owned subsidiary of Vitro, for purposes of facilitating export sales. Notes payable to Servicios y Operaciones Financieras Vitro, S.A. de C.V., and Crisa Corporation affiliates of the Companies, include interest-bearing loans with market interest rates. Trade receivables, other receivables, trade payables, purchases of inventory, operating expenses, interest (expense) income and accounts payable to affiliates, all consist of transactions with subsidiaries of Vitro and are of a normal and recurring nature.

11. Commitments and contingencies

Litigation—The Companies are party to various legal actions in the ordinary course of business. The Companies are not involved in or threatened by proceedings for which the Companies believe they are not adequately insured or indemnified or which, if determined adversely, would have a material adverse effect on their combined financial position, results of operations or cash flows.

Leases—The Companies have several operating lease agreements for the rent of warehouses, office space and equipment. Rent expense for the years ended December 31, 2005 was $4,910.

Various of the minimum rentals due under the leases are adjusted annually based on the Mexican inflation rate and are as follows for the year ending December 31, 2005:

2006		$	5,379
2007			4,148
2008			3,634
2009			2,839
2010			2,831
	Total minimum lease payments required	$	18,831

12. Subsequent events

On April 3, 2006, Vitro announced that it had sold its 51% interest in the Companies to Libbey for $80,000. In addition, Libbey will assume the entire balance of the Companies’ outstanding debt at the close of the transaction. The sale is subject to the final approval of Vitro’s shareholders and the Mexican authorities.

Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries, Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C. (all 51% Owned Subsidiaries’ of Vitro, S.A. de C.V.)

For the Three Month Periods Ended March 31, 2006 and March 31, 2005 (Unaudited)

Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries,

Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C.

Condensed Combined Financial Statements

Table of contents

	Page
Condensed Combined Balance Sheets as of March 31, 2006 (Unaudited)		F-88
Condensed Combined Statements of Operations March 31, 2006 and 2005 (Unaudited)		F-89
Condensed Combined Statements of Cash Flows March 31, 2006 and 2005 (Unaudited)		F-90
Notes to Condensed Combined Financial Statements For the Three Month Periods Ended March 31, 2006 and March 31, 2005 (Unaudited)		F-91

Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries,

Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C.

condensed combined balance sheets

As of March 31, 2006 (Thousands of U.S. dollars)

			March 31, 2006
			(Unaudited)
Assets
	Cash and cash equivalents		$	3,863
	Trade receivables—net			22,282
	Recoverable taxes			10,490
	Receivables from affiliates			781
	Other receivables			5,175
	Inventories			46,896
		Total current assets		89,487
	Property, plant and equipment — net			81,132
	Intangible employee retirement obligation asset			2,520
	Restricted cash			2,252
	Other assets			2,175
	Deferred income taxes			6,406
		Total assets	$	183,972
Liabilities
	Trade payables		$	22,099
	Current portion of long-term debt			17,810
	Notes payable to affiliates			13,779
	Accounts payable to affiliates			21,203
	Accrued expenses			9,056
	Deferred income taxes			7,542
	Sundry creditors			6,375
		Total current liabilities		97,864
	Long-term debt			38,358
	Employee retirement obligations			35,069
		Total long-term liabilities		73,427
		Total liabilities		171,291
Stockholders’ equity
	Contributed capital			72,843
	Accumulated other comprehensive loss			(9,770	)
	Accumulated deficit			(50,392	)
		Total stockholders’ equity		12,681
		Total liabilities and stockholders’ equity	$	183,972

See accompanying notes to the condensed combined financial statements.

Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries,

Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C.

condensed combined statements of operations

For the Three Month Periods Ended March 31, 2006 and 2005 (Thousands of U.S. dollars)

		March 31, 2006			March 31, 2005
		(unaudited)			(unaudited)
Net sales		$	47,566		$	45,156
Cost of sales			38,180			36,492
	Gross profit		9,386			8,664
Selling, general and administrative expenses			5,721			6,061
	Operating income		3,665			2,603
Remeasurement gain			(878	)		(60	)
	Earnings before interest and taxes		4,543			2,663
Interest expense — net			2,367			1,555
	Income before income tax		2,176			1,108
Income tax expense			479			306
	Net income	$	1,697		$	802

See accompanying notes to the condensed combined financial statements.

Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries,

Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C.

condensed combined statements of cash flows

For the Three Month Periods Ended March 31, 2006 and 2005 (Thousands of U.S. dollars)

					March 31, 2006			March 31, 2005
					(Unaudited)			(Unaudited)
Operating activities:
	Net income				$	1,697		$	802
	Adjustments to reconcile net income to net cash provided by (used in) operating activities:
	Depreciation and amortization					3,054			3,613
	Provision for employee retirement obligations					169			973
	Remeasurement gain					(878	)		(60	)
	Loss (income) on sale of fixed assets					(18	)		89
	Deferred income taxes					(907	)		(534	)
	Changes in operating assets and liabilities:
		Increase (decrease) in trade payables				2,802			(3,721	)
		Increase in trade receivables				(1,868	)		(4,954	)
		Increase in inventories				(6,402	)		(6,452	)
			Rebuild expenditures			(4	)		(2,448	)
			Accounts payable to affiliates			4,121			14,914
		Other operating assets and liabilities				(2,242	)		3,879
				Net cash (used in) provided by operating activities		(476	)		6,101
Investing activities:
	Proceeds from the sale of property, plant and equipment					17			31
	Acquisition of property, plant and equipment					(1,369	)		(1,621	)
	Restricted cash					(21	)		(3	)
	Other assets								556
				Net cash used in investing activities		(1,373	)		(1,037	)
Financing activities:
	Repayment of notes payable					(9,293	)		(4,076	)
	Proceeds from affiliates					12,210			1
				Net cash provided by (used) in financing activities		2,917			(4,075	)
Effect of exchange rate changes on cash						(658	)		(11	)
				Net increase in cash and cash equivalents		410			978
Cash and cash equivalents at beginning of year						3,453			2,865
Cash and cash equivalents at end of year					$	3,863		$	3,843
Supplemental disclosure of cash flow information:
Cash paid during the year for:
				Interest	$	308		$	751
				Income taxes	$	1,129		$	582

See accompanying notes to the condensed combined financial statements.

Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries,

Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C.

notes to condensed combined financial statements

For the Three Month Periods Ended March 31, 2006 and 2005 (Thousands of U.S. dollars)

1. Nature of business, basis of presentation and foreign currency financial statements

Nature of business—Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries, Crisa Libbey, S.A. de C.V. and Crisa Industrial, L.L.C. (the “Companies”) are all 51% owned by Vitro, S.A. de C.V. (“Vitro”) and 49% by Libbey Inc. (“Libbey”). The Companies are under common ownership and common control and as described below their condensed combined financial statements have been combined for reporting purposes.

The Companies are leading manufacturers and distributors of high quality glassware, primarily serving such markets as Mexico, the United States, Canada, Europe, the Middle East, and other regions of Latin America.

The Companies manufacture and distribute an extensive line of products including glass tableware, kitchen, industrial and ornamental products to discount retailers, department stores, retail and food service distributors and food, beverage and appliance companies.

Basis of presentation

a) Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries and Crisa Libbey, S.A. de C.V. maintain their books and records in Mexican pesos and prepare financial statements in accordance with accounting principles generally accepted in Mexico (“MEX GAAP”). The accompanying unaudited condensed combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and have been remeasured into U.S. dollars as discussed below. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included.

Crisa Industrial, L.L.C. (“Crisa Industrial”) is a Company whose principal headquarters are located in the United States of America. Crisa Industrial maintains its books and records in U.S. dollars and prepares financial statements in accordance with accounting principles generally accepted in the United States of America.

b) The condensed combined financial statements of the Companies include those of Crisa Industrial, Crisa Libbey, S.A. de C.V. and the condensed consolidated statements of Vitrocrisa Holding, S. de R.L. de C.V. and its subsidiaries, which are the following:

Company	Ownership percentage
Vitrocrisa, S. de R.L. de C.V.		99.99%
Vitrocrisa Comercial, S. de R.L. de C.V.		99.99%

Intercompany balances and transactions have been eliminated in these condensed combined financial statements.

Foreign currency financial statements—The functional currency of the Companies is the U.S. dollar. As a result, the financial statements of Vitrocrisa Holding, S. de R.L. de C.V. and Subsidiaries and Crisa Libbey, S.A. de C. have been remeasured from Mexican pesos into U.S. dollars using (i) current exchange rates for monetary asset and liability accounts, (ii) historical exchange rates for nonmonetary asset and liability accounts and paid-in capital, (iii) historical exchange rates for revenues and expenses associated with nonmonetary assets and liabilities and (iv) the weighted average exchange rate of the reporting period for all other revenues and expenses. In addition, foreign currency transaction gains and losses resulting from U.S. dollar denominated transactions are eliminated. The resulting remeasurement gain is recorded in the results of operations. The condensed combined financial statements should not be construed as representations that Mexican pesos have been, could have been or may in the future be converted into U.S. dollars at such rates or any other rates.

Relevant exchange rates used in the preparation of the condensed combined financial statements were as follows (Mexican pesos per one U.S. dollar):

	March 31,		March 31,
	2006		2005
Current exchange rate	$	10.8935	$	11.1783
Three months ended weighted average exchange rate		10.5976		11.1910

Use of estimates—The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although management believes the estimates and assumptions used in the preparation of these condensed combined financial statements were appropriate in the circumstances, actual results could differ from those estimates and assumptions.

2. Inventories

The breakdown of inventories at March 31 is summarized as follows:

	March 31,
	2006
	(unaudited)
Finished products	$	40,466
Raw materials		1,594
Packaging materials		1,013
		43,073
Spare parts		1,271
Refractory		2,207
Inventory in transit		345
	$	46,896

3. Property, plant and equipment

Property, plant and equipment at March 31 are summarized as follows:

	March 31, 2006
	(unaudited)
Land	$	2,383
Buildings		23,800
Machinery and equipment		187,145
Accumulated depreciation		(139,215	)
		74,113
Construction in progress		7,019
	$	81,132

4. Long-term debt

Certain of the Companies’ long-term debt agreements contain restrictions and covenants that require the maintenance of various financial ratios. The Companies were in compliance with these restrictions and covenants as of March 31, 2006.

5. Balances and transactions with affiliated companies

The principal balances and transactions with affiliated companies not shown separately in the condensed combined financial statements are as follows:

		March 31, 2006		March 31, 2005
		(unaudited)		(unaudited)
Balances as of March 31:
	Trade receivables	$	129
	Trade payables		4,563
	Net sales		6,277	$	7,082
	Cost of sales		1,883		1,404
	Operating expenses		910		820
	Interest expense		429		313

Net sales disclosed above were primarily to Crisa Texas Limited a wholly owned subsidiary of Vitro, for purposes of facilitating export sales.

Notes payable to Servicios y Operaciones Financieras Vitro, S.A. de C.V., and Crisa Corporation affiliates of the Companies, include interest-bearing loans with market interest rates. Trade receivables, other receivables, trade payables, purchases of inventory, operating expenses, interest (expense) income and accounts payable to affiliates, all consist of transactions with subsidiaries of Vitro and are of a normal and recurring nature.

6. Contingencies

Litigation—The Companies are party to various legal actions in the ordinary course of business. The Companies are not involved in or threatened by proceedings for which the Companies believe they are not adequately insured or indemnified or which, if determined adversely,

would have a material adverse effect on their condensed combined financial position, results of operations or cash flows.

7. Subsequent events

On April 3, 2006, Vitro announced that it had sold its 51% interest in the Companies to Libbey for $80,000. In addition, Libbey will assume the entire balance of the Companies’ outstanding debt at the close of the transaction. The sale is subject to the final approval of Vitro’s shareholders and the Mexican authorities.

EX-99.4 14 c06146exv99w4.htm UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED FINANCIAL INFORMATION

EXHIBIT 99.4

Unaudited pro forma consolidated and

combined financial data

The following unaudited pro forma consolidated and combined financial information is based on our audited and unaudited consolidated and combined financial statements adjusted to illustrate the pro forma effect of the following transactions by Libbey Inc. and its subsidiaries: (1) the acquisition of the 51% equity interest in Libbey Inc.’s Mexican joint venture (“Crisa”) with Vitro, S.A. de C.V. (“Vitro”) currently held by Vitro (the “acquisition”) and (2) certain refinancing transactions, including (a) the repayment of amounts outstanding under Libbey Inc.’s existing senior secured credit facility, (b) the redemption of Libbey Inc.’s outstanding senior notes, (c) the repayment of existing indebtedness of Crisa, (d) the refinancing of the euro-denominated working capital line of credit of Libbey Inc.’s wholly owned subsidiary Libbey Europe B.V. and (e) the payment of related fees, expenses and redemption premiums (the “refinancing” and, together with the acquisition, the “transactions”). The terms “Libbey,” the “Company,”, “we,” “us” and “our” refer to Libbey Inc. and its subsidiaries.

The unaudited pro forma consolidated and combined balance sheet gives effect to the transactions as if they had occurred on March 31, 2006. The unaudited pro forma consolidated and combined statements of operations for the year ended December 31, 2005, for the three months ended March 31, 2005 and 2006 and for the twelve months ended March 31, 2006 give effect to the transactions as if they had occurred on January 1, 2005.

The unaudited pro forma adjustments are based upon currently available information and certain assumptions that we believe to be reasonable under the circumstances. The pro forma adjustments reflect our preliminary estimates of the purchase price allocation under step acquisition accounting, which are expected to change upon finalization of appraisals and other valuation studies that we will arrange to obtain and the completion of our plan to restructure certain manufacturing operations and reduce headcount at Crisa. The final allocation will be based on our actual assets and liabilities that exist as of the date of the completion of the transactions. Any additional purchase price allocation to inventory for production profit would impact cost of goods sold subsequent to the acquisition. Any additional purchase price allocation to property, plant and equipment or other finite-lived intangible assets would result in additional depreciation and amortization expense, which may be significant. Additionally, the structure of the transactions and certain tax planning that we may undertake in connection with the transactions and subsequent tax filings may impact income tax costs.

The unaudited pro forma consolidated and combined financial information is for informational purposes only and is not intended to represent the consolidated and combined results of operations or financial position that we would have reported had the transactions been completed as of the date presented, and should not be taken as representative of our future consolidated results of operations or financial position.

Unaudited pro forma consolidated and combined balance sheet

As of March 31, 2006	Libbey		Crisa		Acquisition			Refinancing						Pro forma
(Dollars in thousands)	Historical(a)		Historical(b)		Adjustments(c)			Adjustments(d)			Reclasses(e)			as adjusted
Assets
Current assets:
Cash	$	6,502	$	3,863	$	—		$	(7,525	)	$	—		$	2,840
Accounts receivable— net		72,244		23,063		(115	)					(3,923	)		91,269
Inventories— net		121,388		46,896		(3,625	)		—			—			164,659
Deferred taxes		8,744		—		—			—			—			8,744
Prepaid and other current assets		5,494		15,665		—			(2,306	)		—			18,853
Total current assets		214,372		89,487		(3,740	)		(9,831	)		(3,923	)		286,365
Other assets:
Repair parts inventories		8,457		—		—			—			—			8,457
Investments		77,489		—		(77,489	)		—			—			—
Intangible pension asset		17,251		2,520		(2,520	)		—			—			17,251
Software— net		4,536		—		—			—			—			4,536
Deferred taxes		—		6,406		(6,406	)		—			—			—
Other assets		5,483		4,427		—			8,237			—			18,147
Purchased intangible assets— net		10,440		—		19,584			—			—			30,024
Goodwill— net		51,068		—		123,443			—			—			174,511
Total other assets		174,724		13,353		56,612			8,237			—			252,926
Property, plant and equipment— net		215,118		81,132		(11,313	)		—			—			284,937
Total assets	$	604,214	$	183,972	$	41,559		$	(1,594	)	$	(3,923	)	$	824,228
Liabilities and Shareholders’ Equity
Current liabilities:
Notes payable	$	11,167	$	13,779	$	—		$	(24,946	)	$	—		$	—
Accounts payable		40,070		28,474		(11	)		—			(3,142	)		65,391
Accounts payable to Vitro		—		21,203		(2,500	)		—			(781	)		17,922
Salaries and wages		14,344		—		—			—			1,694			16,038
Derivative liability		67		—		—			—			—			67
Accrued liabilities		40,679		9,056		—			(5,735	)		(1,694	)		42,306
Deferred taxes		—		7,542		1,535			—			—			9,077
Special charges reserve		1,138		—		2,708			—			—			3,846
Long-term debt due within one year		825		17,810		—			(18,635	)		—			—
Total current liabilities		108,290		97,864		1,732			(49,316	)		(3,923	)		154,647
Long-term debt		272,343		38,358		—			132,330			—			443,031
Pension liability		56,097		35,069		(19,463	)		—			—			71,703
Nonpension postretirement benefits		45,330		—		—			—			—			45,330
Other long-term liabilities		5,334		—		(421	)		—			—			4,913
Total liabilities		487,394		171,291		(18,152	)		83,014			(3,923	)		719,624
Total shareholders’ equity		116,820		12,681		59,711			(84,608	)		—			104,604
Total liabilities and shareholders’ equity	$	604,214	$	183,972	$	41,559		$	(1,594	)	$	(3,923	)	$	824,228

Notes to unaudited pro forma consolidated and combined balance sheet

(Dollars in thousands)

(a)	Reflects the unaudited consolidated balance sheet of Libbey as of March 31, 2006.
(b)	Reflects the unaudited combined balance sheet of Crisa as of March 31, 2006.
(c)	Represents the preliminary goodwill created by the excess of purchase price over the estimated fair value of assets acquired and liabilities assumed as a result of the following assumed purchase price allocation:

Inferred enterprise purchase price(1)	$	156,863
Less: assets received/liabilities forgiven(2)		(6,560	)
Add: estimated direct acquisition costs(3)		4,000
Aggregate enterprise purchase price		154,303
Add: fair value liabilities assumed(4)		154,526
Less: fair value assets acquired(5)		(216,716	)
Inferred goodwill of 51% purchase		92,113
Equity interest acquired		51%
Preliminary goodwill of 51% purchase		46,978
Adjustments to step acquisition accounting(6):
Less: adjustment to inventories— net(7)		967
Add: adjustments to property, plant and equipment(8)		1,470
Less: net adjustment to pension asset and liability(9)		(8,251	)
Add: adjustment to intercompany liability forgiven(2)		1,225
Add: adjustment to deferred taxes(10)		11,707
Total adjustments		7,118
Add: goodwill recorded on existing 49% ownership interest (11)		69,347
Enterprise goodwill	$	123,443

(1)	Reflects $80,000 for the acquisition.
(2)	Represents the fair value of assets that Crisa had not recorded on its historical balance sheet (racks and conveyors of $3,000) and to which Crisa will be granted title pursuant to the purchase agreement, less the fair value of liabilities forgiven as part of the purchase contract ($1,060 in Libbey profit sharing liability to Vitro and $2,500 in Crisa intercompany payable to Vitro).
(3)	Represents estimated direct acquisition costs, including financial, advisory, legal, accounting and other costs.
(4)	Represents the fair value of liabilities assumed to which step acquisition accounting is applied.

Crisa March 31, 2006 historical total liabilities	$	171,291
Less: Book value of Taller liabilities(i)		(114	)
Add: Adjustment to fair value of severance obligation(ii)		2,708
Less: Adjustment to fair value of pension liability(iii)		(19,359	)
Fair value of liabilities assumed	$	154,526

(i) The following amounts relate to the Taller business line, which specializes in the production of custom made crystal. This business is specifically excluded from the acquisition. Amounts are removed from the pro forma balance sheet as they are included in the Crisa Historical balance sheet. Amounts agree to the acquisition adjustment column unless otherwise noted. See the following reconciliation of the Taller net assets:

Accounts receivable— net	$	115
Inventories— net*		299
Property, plant and equipment— net**		209
Accounts payable		(11	)
Pension liability***		(103	)
Net assets	$	509

*	See footnote (c)(7).
**	See footnote (c)(8).
***	See footnote (c)(9).

(ii)	See footnote (c)(13).
(iii)	See footnote (c)(9).

 (5) Represents the fair value of assets acquired to which step acquisition accounting is applied.

Crisa March 31, 2006 historical total assets	$	183,972
Less: Taller total assets(i)		(623	)
Less: Adjustment to fair value of property, plant and equipment(ii)		(975	)
Add: Adjustment to fair value of identified intangibles (iii)		38,400
Less: Adjustment to fair value of intangible pension asset (iv)		(2,520	)
Less: Adjustment to fair value of deferred financing fees (v)		(1,538	)
	$	216,716

(i)	See footnote (c)(4)(i).
(ii)	Represents the net of assets granted to Crisa in the acquisition by Vitro, the removal of the Taller fixed assets and the step acquisition adjustment to fair value. See footnote (c)(8).
(iii)	Represents the inferred enterprise value of the identifiable intangible assets described in footnote (c)(12).
(iv)	See footnote (c)(9).
(v)	See footnote (d)(2).

(6)	Adjustments required to record assets and liabilities at acquired fair value subsequent to the application of step acquisition accounting. These items were recorded for assets acquired and liabilities assumed at 100% of fair value, as well as, assets and liabilities created in purchase accounting.
(7)	The following reflects fair value adjustments to inventories resulting from the transactions:

Amount of inventory adjustment recorded against equity(i)	$	(2,359	)
Amount of inventory adjustment recorded against goodwill (ii)		(967	)
Adjustment to record Crisa inventory at fair value	$	(3,326	)

(i)	Represents the writedown to fair value of inventory related to the restructuring of Plant C attributable to Libbey’s existing 49% interest as a result of Libbey’s plan to close the facility.
(ii)	Represents the difference between the appraised fair value of the 51% interest acquired and the historical carrying value.

The following reconciles the individual inventory adjustments to the total and combined adjustment as reflected in the Pro forma Acquisition Adjustments column of the unaudited pro forma consolidated balance sheet:

Adjustment to record Crisa inventory at fair value	$	(3,326	)
Adjustment to remove Taller inventory		(299	)
Total adjustment to inventories — net	$	(3,625	)

  (8) The following reflects adjustments to property, plant and equipment arising from the transactions:

Step acquisition adjustment to fair value(i)	$	(278	)
Adjustment to reflect assets granted in purchase at fair value(ii)		1,470
One time charge for write down of Plant C(iii)		(12,296	)
Remove Taller fixed assets(iv)		(209	)
Total property, plant and equipment adjustments	$	(11,313	)

(i)	Represents the difference between the appraised fair value of the 51% interest acquired and the historical carrying value.
(ii)	Represents the assets granted to Crisa through the purchase contract (assets not recorded in the historical Crisa records) at 100% of the fair value. The fair value of the racks and conveyors granted upon purchase were valued at $3,000. Due to the fact these assets were granted as part of the purchase contract, Crisa will record the entire fair value on its opening balance sheet, instead of 51% of the fair value applied in step acquisition accounting. Since 51% was previously recorded, this adjustment is required to record the remaining 49%.
(iii)	Represents the writedown to fair value of Plant C attributable to Libbey’s existing 49% interest as a result of Libbey’s plan to close the facility.
(iv)	See footnote (c)(4)(i).

  (9) The following reflects adjustments to pension liabilities arising from the transactions:

Elimination of intangible pension asset(i)	$	(2,520	)
Reduction of pension liability (including Taller of $103) (ii)		19,463
Total pension adjustments	$	16,943

             (i) Represents the elimination of the intangible pension asset principally as a result of Vitro retaining the pension obligation for Crisa retirees and step acquisition adjustments pertaining to the obligation for active Crisa employees.

             (ii) Principally represents the elimination of the pension liability associated with Crisa retirees.

     (10)  The following reflects adjustments to deferred income taxes arising from the transactions:

Reclassification of deferred tax asset to deferred tax liability(i)	$	(6,406	)
Effect of step acquisition adjustments impacting goodwill (ii)		11,707
Effect of one time charges(iii)		(3,766	)
Total deferred tax adjustments	$	1,535

(i)	Represents the reclassification of Crisa’s deferred tax asset to deferred tax liability in conformity with Libbey Policy.
(ii)	Represents the deferred tax effects of temporary differences resulting from the application of step acquisition adjustments to certain Crisa assets and liabilities.
(iii)	Principally reflects the tax benefit associated with one time charges related to the transactions including the writedown of Plant C fixed assets and the reversal of the increase in inventory to fair value and the writedown of certain inventories to fair value due to exiting certain product lines.

     (11)  The following reconciliation represents the original investment balance related to the 49% investment in Crisa. The investment was eliminated with the purchase price allocation and the following represents the adjustments to the pro-forma balance sheet:

Amount allocated to goodwill(i)	$	69,347
Reversal of the fair value of the guarantee of Crisa debt (ii)		421
Amount allocated to equity(iii)		7,721
	$	77,489

(i)	Represents the goodwill reflected in the Company’s existing 49% equity investment in Crisa.
(ii)	Represents the elimination of the fair value of Libbey’s loan guarantee which expires upon the consummation of the transactions.
(iii)	Represents the elimination of Libbey’s 49% interest in Crisa’s shareholders’ equity.

     (12)  The following summarizes the acquisition of 51% of the appraised fair value of Crisa’s identifiable intangible assets which have been recorded in connection with the transactions.

Trademarks and tradenames	$	8,160
Patented technology		1,122
Customer relationships		9,282
Covenants not-to-compete		1,020
Total	$	19,584

(13)	Represents the estimated $2,708 statutory severance obligation resulting from the Company’s plan to close Crisa’s Plant C, restructure certain manufacturing operations and reduce headcount shortly after the transactions are consummated. The obligation has been accounted for in accordance with EITF 95-3 “Recognition of liabilities in connection with a purchase business combination”.
(14)	The following reconciles the equity impact of the purchase price allocation:

Aggregate purchase price(i)	$	78,694
Less: Taller net assets(ii)		(509	)
Add: Impact of deferred tax liability from equity effect of purchase accounting(iii)		3,766
Less: Equity impact of reduction in property, plant and equipment related to restructuring of Plant C(iv)		(12,296	)
Less: Equity impact of the write-off of the historical equity investment(v)		(7,721	)
Less: Adjustment to Inventories — net(vi)		(2,359	)
Add: Other		136
Net equity impact	$	59,711

(i)	Represents 51% of $154,303 aggregate purchase price as calculated in the initial table in note (c).
(ii)	See footnote (c)(4)(i).
(iii)	See footnote (c)(10).
(iv)	See footnote (c)(8).
(v)	See footnote (c)(11).
(vi)	See footnote (c)(vi).

(d)   (1)  The adjustments for the transactions relate to financing of the acquisition, the refinancing, the write-off of the unamortized deferred financing fees relating to current Libbey and Crisa debt being refinanced and the recording of additional deferred financing fees.

The following reconciles the refinanced debt balance adjustment with the other account adjustments as detailed below:

Amounts to be refinanced:
Notes payable(i)	$	24,946
Accrued liabilities(ii)		4,544
Long-term debt due within one year(iii)		18,635
Total amounts to be refinanced	$	48,125
Purchase price of 51% of Vitrocrisa(iv)		84,000
Acquisition costs(v)		14,000
Total amounts to be paid or refinanced	$	146,125
Sources of cash used to repay existing debt:
Cash(vi)	$	7,525
Prepaid and other current assets(vii)		2,306
Other assets(viii)		2,252
Total sources of cash	$	12,083
Value assigned to warrants issued in connection with the senior subordinated secured pay-in-kind notes		(1,712	)
Total incremental long-term debt	$	132,330

(i)	Represents the sum of the notes payable accounts included in Libbey Historical and Crisa Historical columns that will be refinanced once the transactions are closed. $11,167 of this balance relates to Libbey and $13,779 relates to Crisa.
(ii)	Represents the sum of the accrued interest amounts included accrued liabilities account in the Libbey Historical and Crisa Historical columns that will be refinanced once the transactions are closed. $2,713 of this balance relates to Libbey and $1,831 relates to Crisa.
(iii)	Represents the sum of the long-term debt due within one-year accounts included in the Libbey Historical and Crisa Historical columns that will be refinanced once the transactions are closed. $825 of this balance relates to Libbey and $17,810 relates to Crisa.

(iv)  Represents the $80,000 purchase price of Crisa plus the anticipated $4,000 of acquisition fees. See the inclusion of this amount in shareholders’ equity below.

(v)	Represents the anticipated refinancing fees related to the transactions. This amount is recorded in Other assets. See the reconciliation of Other assets below.
(vi)	Represents the cash used to repay existing debt prior to the transactions. $4,662 of this balance relates to Libbey and $2,863 relates to Crisa.
(vii)	Represents a deposit Crisa has recorded which, per current contracts, will be refunded upon repayment of the existing debt.
(viii)	Represents a deposit Crisa has recorded which, per current contracts, will be refunded upon repayment of the existing debt. This amount is included in the Other assets adjustment of $8,237. See reconciliation below.

(2) The following reconciles the Other assets adjustment:

Write-off of unamortized Crisa deferred financing fees(i)	$	(1,538	)
Write-off of unamortized Libbey deferred financing fees (i)		(1,973	)
Refund of deposit upon repayment of debt(ii)		(2,252	)
Deferred financing fees recorded for the transactions (iii)		14,000
Total Other assets	$	8,237

(i)	Represents a write-off of deferred financing fees on the historical balance sheets for Crisa and Libbey, respectively, which are being removed and charged to equity (net of deferred tax) due to the refinancing.
(ii)	See footnote (d)(1)(viii).
(iii)	These are the anticipated financing fees expected to be incurred in the refinancing.

(3) The following reconciles the decrease in Shareholders’ Equity:

Purchase price of 51% of Vitrocrisa(i)	$	84,000
Write-off of unamortized Crisa deferred financing fees (ii)		1,077
Write-off of unamortized Libbey deferred financing fees (ii)		1,243
Value assigned to warrants issued in connection with the senior subordinated secured pay-in-kind notes		(1,712	)
Total adjustment to Shareholders’ equity	$	84,608

(i)	See footnote (d)(1)(iv).
(ii)	See footnote (d)(2)(i).

(e) The following adjustments are recorded to eliminate certain intercompany balances and to reclassify amounts to conform presentation:

(1)	Eliminates the intercompany receivable amount of $3,923 including in Accounts receivable— net with the intercompany payable amounts of $3,142 and $781 included in Accounts payable and Accounts payable to Vitro, respectively.
(2)	Reclassifies certain amounts related to the salary and wage accrual from accrued liabilities to salaries and wages. This is done to conform Crisa’s presentation with that of Libbey.

'

Unaudited pro forma consolidated and combined statements of operations

Year ended
December 31, 2005		Libbey			Crisa			Acquisition			Refinancing			Pro forma as
(Dollars in thousands)		Historical(a)			Historical(b)			Adjustments(c)			Adjustments(d)			adjusted
Net sales		$	568,133		$	190,178		$	(31,186	)	$	—		$	727,125
Freight billed to customers			1,932			—			—			—			1,932
	Total revenue		570,065			190,178			(31,186	)		—			729,057
Cost of sales			483,523			161,670			(43,391	)		—			601,802
	Gross profit		86,542			28,508			12,205			—			127,255
Selling, general and administrative expenses			71,535			24,713			(2,341	)		—			93,907
Special charges			23,924			—			—			—			23,924
	(Loss) income from operations		(8,917	)		3,795			14,546			—			9,424
Equity (loss) earnings— pretax			(4,100	)		—			4,100			—			—
Other income			2,567			(1,284	)		(1,148	)		—			135
	(Loss) earnings before interest, income taxes and minority interest		(10,450	)		2,511			17,498			—			9,559
Interest expense(e)			15,255			8,423			(676	)		37,078			60,080
	(Loss) income before income taxes and minority interest		(25,705	)		(5,912	)		18,174			(37,078	)		(50,521	)
	(Credit) provision for income taxes		(6,384	)		1,896			3,260			(13,185	)		(14,413	)
Minority interest			34			—			—			—			34
Net loss		$	(19,355	)	$	(7,808	)	$	14,914		$	(23,893	)	$	(36,142	)

Three months ended
March 31, 2005		Libbey			Crisa		Acquisition			Refinancing			Pro forma as
(Dollars in thousands)		Historical(a)			Historical(b)		Adjustments(c)			Adjustments(d)			adjusted
Net sales		$	129,784		$	45,156	$	(7,724	)	$	—		$	167,216
Freight billed to customers			497			—		—			—			497
	Total revenue		130,281			45,156		(7,724	)		—			167,713
Cost of sales			109,242			36,492		(11,461	)		—			134,273
	Gross profit		21,039			8,664		3,737						33,440
Selling, general and administrative expenses			17,954			6,061		(546	)		—			23,469
Special charges			2,997			—		—			—			2,997
	Income from operations		88			2,603		4,283						6,974
Equity earnings— pretax			554			—		(554	)		—			—
Other income			301			60		(441	)		—			(80	)
	Earnings before interest, income taxes and minority interest		943			2,663		3,288			—			6,894
Interest expense(e)			3,378			1,555		(169	)		10,348			15,112
	(Loss) income before income taxes and minority interest		(2,435	)		1,108		3,458			(10,348	)		(8,218	)
	(Credit) provision for income taxes		(803	)		306		1,088			(3,680	)		(3,089	)
Minority interest			15			—		—			—			15
Net (loss) income		$	(1,647	)	$	802	$	2,370		$	(6,668	)	$	(5,144	)

Three months ended
March 31, 2006		Libbey		Crisa		Acquisition			Refinancing			Pro forma as
(Dollars in thousands)		Historical(a)		Historical(b)		Adjustments(c)			Adjustments(d)			adjusted
Net sales		$	134,866	$	47,566	$	(6,787	)	$	—		$	175,645
Freight billed to Customers			457		—		—			—			457
	Total revenue		135,323		47,566		(6,787	)		—			176,102
Cost of sales			113,177		38,180		(10,174	)		—			141,183
	Gross profit		22,146		9,386		3,387			—			34,919
Selling, general and administrative expenses			19,086		5,721		(593	)		—			24,214
	Income from operations		3,060		3,665		3,980			—			10,705
Equity earnings— pretax			1,065		—		(1,065	)		—			—
Other income			396		878		(408	)		—			866
	Earnings before interest, income taxes and minority interest		4,521		4,543		2,507			—			11,571
Interest expense(e)			3,609		2,367		(169	)		9,044			14,851
	Income (loss) before income taxes and minority interest		912		2,176		2,676			(9,044	)		(3,280	)
	Provision (credit) for income taxes		301		479		880			(3,216	)		(1,556	)
Minority interest			96		—		—			—			96
Net income (loss)		$	515	$	1,697	$	1,796		$	(5,828	)	$	(1,820	)

Twelve months ended
March 31, 2006		Libbey			Crisa			Acquisition			Refinancing			Pro forma as
(Dollars in thousands)		Historical(a)			Historical(b)			Adjustments(c)			Adjustments(d)			adjusted
Net sales		$	573,215		$	192,588		$	(30,249	)	$	—		$	735,554
Freight billed to customers			1,892			—			—			—			1,892
	Total revenue		575,107			192,588			(30,249	)		—			737,446
Cost of sales			487,458			163,358			(42,104	)		—			608,712
	Gross profit		87,649			29,230			11,855			—			128,734
Selling, general and administrative expenses			72,667			24,373			(2,388	)		—			94,652
Special charges			20,927			—			—			—			20,927
	(Loss) income from operations		(5,945	)		4,857			14,243			—			13,155
Equity loss— pretax			(3,589	)		—			3,589			—			—
Other income			2,662			(466	)		(1,115	)		—			1,081
	(Loss) earnings before interest, income taxes and minority interest		(6,872	)		4,391			16,717			—			14,236
Interest expense(e)			15,486			9,235			(676	)		35,774			59,819
	Loss before income taxes and minority interest		(22,358	)		(4,844	)		17,393			(35,774	)		(45,583	)
	(Credit) provision for income taxes		(5,280	)		2,069			3,052			(12,721	)		(12,880	)
Minority interest			115			—			—			—			115
Net loss		$	(17,193	)	$	(6,913	)	$	14,341		$	(23,053	)	$	(32,818	)

Notes to unaudited pro forma consolidated and combined statements of operations

(Dollars in thousands)

(a)	Libbey Historical amounts are derived from: 1) the audited consolidated statement of operations for the year ended December 31, 2005; 2) the unaudited consolidated statement of operations for the three months ended March 31, 2005; and 3) the unaudited consolidated statement of operations for the three months ended March 31, 2006.
(b)	Crisa Historical amounts are derived from: 1) the audited combined statement of operations for the year ended December 31, 2005; 2) the unaudited condensed combined statement of operations for the three months ended March 31, 2005; and 3) the unaudited condensed combined statement of operations for the three months ended March 31, 2006.
(c)	Reflects the following pro forma acquisition and related step acquisition accounting adjustments:

											Last
					Three			Three			twelve
					months			months			months
		Year ended			ended			ended			ended
		December 31,			March 31,			March 31,			March 31,
(Dollars in thousands)		2005			2005			2006			2006
Sales from Crisa to Libbey(i)		$	(29,667	)	$	(7,377	)	$	(6,420	)	$	(28,710	)
Taller(ii)			(1,519	)		(347	)		(367	)		(1,539	)
	Net sales	$	(31,186	)	$	(7,724	)	$	(6,787	)	$	(30,249	)
Cost of sales:
Pension(iii)		$	(3,779	)	$	(945	)	$	(1,319	)	$	(4,153	)
Rent expense(iv)			(939	)		(235	)		(235	)		(939	)
Libbey technical assistance(v)			(1,110	)		(284	)		(296	)		(1,122	)
Taller(ii)			(1,063	)		(264	)		(261	)		(1,060	)
Depreciation(vi)			(3,277	)		(1,422	)		(863	)		(2,718	)
Sales from Crisa to Libbey(i)			(33,223	)		(8,311	)		(7,200	)		(32,112	)
	Cost of sales	$	(43,391	)	$	(11,461	)	$	(10,174	)	$	(42,104	)
Selling, general and administrative expenses:
General manager(vii)		$	(500	)	$	(125	)	$	(125	)	$	(500	)
Vitro management fee charges(viii)			(2,593	)		(615	)		(643	)		(2,621	)
Taller(ii)			(280	)		(64	)		(83	)		(299	)
Amortization of purchased intangibles(ix)			1,032			258			258			1,032
	Selling, general and administrative expenses	$	(2,341	)	$	(546	)	$	(593	)	$	(2,388	)
Elimination of Crisa loss (earnings) accounted for under equity method of accounting(x)		$	4,100		$	(554	)	$	(1,065	)	$	3,589
Other income:
Libbey technical assistance(v)		$	(1,110	)	$	(284	)	$	(296	)	$	(1,122	)
Other			(38	)		(157	)		(112	)		7
	Total other income	$	(1,148	)	$	(441	)	$	(408	)	$	(1,115	)
Interest expense:
Loan guarantee fees(xi)		$	(676	)	$	(169	)	$	(169	)	$	(676	)
Income tax on the pro forma adjustments(xii)		$	3,260		$	1,088		$	880		$	3,052

(i)	Elimination of Crisa sales to Libbey. These sales are covered under a distribution agreement whereby Libbey has the sole distribution rights on sales into the U.S. and Canada. The related profits on these sales are split between Libbey and Vitro. The difference between sales value and cost represents the profit sharing payment to Vitro that will be retained by Libbey as a result of the acquisition.
(ii)	The Taller business line is specifically excluded from the acquisition.
(iii)	As part of the acquisition, Vitro will retain all liabilities for retired employees included in the Crisa unfunded pension plans.
(iv)	As part of the acquisition, Vitro will transfer certain land and warehouse equipment to Crisa that is currently leased by Crisa. The additional depreciation expense related to the warehouse equipment is included in the depreciation adjustment (see (vi) below).
(v)	Elimination of technical assistance fees charged to Crisa by Libbey.
(vi)	The depreciation adjustment is for step acquisition accounting and the estimated fair value reduction of fixed assets. Due to the planned production capacity realignment, fixed assets will be written down.

(vii)	The General Manager of Crisa will be transferred to Vitro and Crisa will pay $500 per year for three years for General Manager services. The General Manager’s historical salary is approximately $1,000 per year. Once the transition services agreement ends, the scope of the General Manager position will be reduced and is not expected to carry an equivalent salary.
(viii)	The 1.5% management fee levied against Crisa revenue by Vitro will be eliminated as a result of the termination of certain contracts resulting from the acquisition. Vitro will no longer have an equity interest in Crisa as a result of the acquisition and will only provide certain transition services as previously described.
(ix)	Amortization of intangibles related to patents, customer relationships and non-compete agreements acquired as a result of the acquisition. Trademark and tradenames are indefinite lived intangible assets and not subject to amortization.
(x)	Elimination of Libbey’s 49% equity earnings in Crisa. As a result of the acquisition, Libbey will own 100% of Crisa and there will be no equity earnings in Crisa.
(xi)	Fees charged by Vitro to guarantee a portion of the Crisa debt will be eliminated as a result of the acquisition.
(xii)	Pro forma adjustments applicable to Libbey are tax effected using Libbey’s weighted average statutory tax rate of 35.6%. Crisa pro forma adjustments are tax effected using the Mexican statutory tax rates of 30% and 29% for 2005 and 2006, respectively. For the last twelve months ended March 31, 2006, a blended Mexican statutory tax rate of 29.75% was applied.

(d) Reflects the pro forma net change to interest expense (and related tax on the interest expense adjustment) as a result of the acquisition and refinancing:

				Three		Three		Twelve
				months		months		months
		Year ended		ended		ended		ended
		December 31,		March 31,		March 31,		March 31,
		2005		2005		2006		2006
New interest expense:
Senior secured notes(i)		$	37,883	$	9,471	$	9,471	$	37,883
Senior subordinated secured pay-in-kind notes(ii)			16,973		4,243		4,243		16,973
New senior secured credit facility(iii)			2,142		536		536		2,142
Commitment fee on unused amount(iv)			278		69		69		278
Fees on outstanding letters of credit(v)			147		37		37		147
Amortization of capitalized financing costs and original issuance discount on senior subordinated secured pay-in-kind notes(vi)			4,669		1,167		1,167		4,669
Total pro forma interest expense on new borrowings			62,092		15,523		15,523		62,092
Less: historical interest expense on borrowings repaid in conjunction with the transactions and related amortization of deferred financing fees:
	Libbey		16,465		3,610		4,069		16,924
	Crisa		8,549		1,565		2,410		9,394
Adjustment to interest expense		$	37,078	$	10,348	$	9,044	$	35,774

    (i) Represents interest on the senior secured notes, which is calculated as follows:

			Three		Three		Twelve
			months		months		months
	Year ended		ended		ended		ended
	December 31,		March 31,		March 31,		March 31,
	2005		2005		2006		2006
Estimated outstanding balance	$	306,000	$	306,000	$	306,000	$	306,000
Assumed interest rate — 6 month LIBOR plus 700 bps		12.38%		12.38%		1 2.38%		12.38%
Portion of year not outstanding		1.00		0.25		0.25		1.00
Calculated interest	$	37,883	$	9,471	$	9,471	$	37,883

 For each 0.25% change in the interest rate on the senior secured notes, our interest expense would change by $765 per annum.

(ii) Represents interest on the senior subordinated secured pay-in-kind notes, which is calculated as follows:

			Three		Three		Twelve
			months		months		months
	Year ended		ended		ended		ended
	December 31,		March 31,		March 31,		March 31,
	2005		2005		2006		2006
Estimated outstanding balance	$	102,000	$	102,000	$	102,000	$	102,000
Assumed interest rate		16.0%		16.0%		16.0%		16.0%
Portion of year not outstanding		1.0		0.25		0.25		1.00
Calculated interest	$	16,973	$	4,243	$	4,243	$	16,973

	Interest rate is paid-in-kind and compounded semi-annually, initially starting at 16.0%. For each 0.25% change in the interest rate on the senior subordinated secured pay-in-kind notes, our interest expense would change by $255 per annum.
(iii) Represents interest on our new senior secured credit facility, which is calculated as follows:

			Three		Three		Twelve
			months		months		months
	Year ended		ended		ended		ended
	December 31,		March 31,		March 31,		March 31,
	2005		2005		2006		2006
Estimated outstanding balance	$	30,600	$	30,600	$	30,600	$	30,600
Assumed interest rate— 3 month LIBOR plus 175 bps		7.0%		7.0%		7.0%		7.0%
Portion of year not outstanding		1.0		0.25		0.25		1.00
Calculated interest	$	2,142	$	536	$	536	$	2,142

(iv) Represents commitment fee charges on unused portion of our new senior secured credit facility, which is calculated as follows:

			Three		Three		Twelve
			months		months		months
	Year ended		ended		ended		ended
	December 31,		March 31,		March 31,		March 31,
	2005		2005		2006		2006
Estimated average unused portion of new senior secured credit facility	$	111,000	$	111,000	$	111,000	$	111,000
Commitment fees		0.25%		0.25%		0.25%		0.25%
Portion of year not outstanding		1.0		0.25		0.25		1.00
Calculated commitment fees	$	278	$	69	$	69	$	278

(v) Represents fees on outstanding letters of credit, which are calculated as follows:

			Three		Three		Twelve
			months		months		months
	Year ended		ended		ended		ended
	December 31,		March 31,		March 31,		March 31,
	2005		2005		2006		2006
Outstanding letters of credit	$	8,400	$	8,400	$	8,400	$	8,400
Fees on letters of credit (175 bps)		1.75%		1.75%		1.75%		1.75%
Portion of year not outstanding		1.0		0.25		0.25		1.00
Calculated letters of credit fees	$	147	$	37	$	37	$	147

(vi) Reflects amortization of capitalized financing costs over the term of the new financing arrangements and amortization of original issue discount on the senior secured notes and the senior subordinated secured pay-in-kind notes, which are calculated as follows:

	Capitalized		Period of
	costs		amortization
Senior secured notes	$	9,750		5 years
Senior subordinated secured pay-in-kind notes		3,250		5.5 years
New senior secured credit facility		1,000		4.5 years
Total capitalized financing costs	$	14,000
Original issue discount on the senior secured notes	$	6,120		5 years
Original issue discount (including discount attributable to warrant value) on the senior subordinated secured pay-in-kind notes	$	3,752		5.5 years

(e) Reflects interest income and the elimination of fees charged by Vitro to guarantee a portion of the Crisa debt.

			Three		Three		Twelve
			months		months		months
	Year ended		ended		ended		ended
	December 31,		March 31,		March 31,		March 31,
	2005		2005		2006		2006
Total pro forma interest expense on new borrowings	$	62,092	$	15,523	$	15,523	$	62,092
Libbey interest income		1,210		232		461		1,439
Crisa interest income		126		10		42		158
Total Interest Income		1,336		242		503		1,597
Less: guarantee fees(c)(xi)		676		169		169		676
Interest expense—net	$	60,080	$	15,112	$	14,851	$	59,819

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EX-99.4

exv99w4