exv4w1






Exhibit 4.1     




EXECUTION COPY







 







LIBBEY GLASS INC.




AND




MERRILL LYNCH PCG, INC.




16% Senior Subordinated Secured Notes due 2021




AMENDED AND RESTATED




INDENTURE




Dated as of October 28, 2009




 





 









 












Table of Contents




	 	 	 	 	 	 	 
	 	 	 	 	Page
	 

	 	ARTICLE I	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	DEFINITIONS AND INCORPORATION BY REFERENCE	 	 	 	 
	 
	 	 	 	 	 	 
	Section 1.1

	 	Definitions
	 	 	2	 
	Section 1.2

	 	Other Definitions
	 	 	39	 
	Section 1.3

	 	Incorporation by Reference of Trust Indenture Act
	 	 	40	 
	Section 1.4

	 	Rules of Construction
	 	 	41	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE II	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	THE SECURITIES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 2.1

	 	Form, Dating and Terms
	 	 	42	 
	Section 2.2

	 	Execution and Authentication
	 	 	45	 
	Section 2.3

	 	Registrar and Paying Agent
	 	 	46	 
	Section 2.4

	 	Paying Agent to Hold Money in Trust
	 	 	47	 
	Section 2.5

	 	Holder Lists
	 	 	47	 
	Section 2.6

	 	Transfer and Exchange
	 	 	47	 
	Section 2.7

	 	Form of Certificate to be Delivered in Connection with Transfers
	 	 	49	 
	Section 2.8

	 	Mutilated, Destroyed, Lost or Stolen Securities
	 	 	51	 
	Section 2.9

	 	Outstanding Securities
	 	 	52	 
	Section 2.10

	 	Temporary Securities
	 	 	53	 
	Section 2.11

	 	Cancellation
	 	 	53	 
	Section 2.12

	 	Payment of Interest; Defaulted Interest
	 	 	53	 
	Section 2.13

	 	Computation of Interest
	 	 	55	 
	Section 2.14

	 	CUSIP, Common Code and ISIN Numbers
	 	 	55	 
	Section 2.15

	 	Tax Reporting
	 	 	55	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE III	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	COVENANTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 3.1

	 	Payment of Securities
	 	 	56	 
	Section 3.2

	 	Limitation on Indebtedness
	 	 	56	 
	Section 3.3

	 	Limitation on Restricted Payments
	 	 	64	 
	Section 3.4

	 	Limitation on Restrictions on Distributions from Restricted Subsidiaries
	 	 	 71	 
	Section 3.5

	 	Limitation on Sales of Assets and Subsidiary Stock
	 	 	73	 
	Section 3.6

	 	Limitation on Liens
	 	 	76	 
	Section 3.7

	 	Limitation on Affiliate Transactions
	 	 	77	 
	Section 3.8

	 	Limitation on Sale of Capital Stock of Restricted Subsidiaries
	 	 	78	 






i









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 3.9

	 	Limitation on Lines of Business
	 	 	79	 
	Section 3.10

	 	Change of Control
	 	 	79	 
	Section 3.11

	 	SEC Reports
	 	 	81	 
	Section 3.12

	 	Future Subsidiary Guarantors
	 	 	81	 
	Section 3.13

	 	Maintenance of Office or Agency
	 	 	82	 
	Section 3.14

	 	Corporate Existence
	 	 	82	 
	Section 3.15

	 	Payment of Taxes and Other Claims
	 	 	83	 
	Section 3.16

	 	Payments for Consent
	 	 	83	 
	Section 3.17

	 	Compliance Certificate
	 	 	83	 
	Section 3.18

	 	Further Instruments and Acts
	 	 	83	 
	Section 3.19

	 	Statement by Officers as to Default
	 	 	83	 
	Section 3.20

	 	Limitation on Layering
	 	 	84	 
	Section 3.21

	 	Repurchase Offer Upon Equity Issuances
	 	 	84	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE IV	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	SUCCESSOR COMPANY	 	 	 	 
	 
	 	 	 	 	 	 
	Section 4.1

	 	Merger and Consolidation
	 	 	86	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE V	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	REDEMPTION OF SECURITIES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 5.1

	 	Redemption
	 	 	90	 
	Section 5.2

	 	Applicability of Article
	 	 	90	 
	Section 5.3

	 	Election to Redeem; Notice to Trustee
	 	 	90	 
	Section 5.4

	 	Selection by Trustee of Securities to Be Redeemed
	 	 	90	 
	Section 5.5

	 	Notice of Redemption
	 	 	91	 
	Section 5.6

	 	Deposit of Redemption Price
	 	 	92	 
	Section 5.7

	 	Securities Payable on Redemption Date
	 	 	92	 
	Section 5.8

	 	Securities Redeemed in Part
	 	 	92	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE VI	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	DEFAULTS AND REMEDIES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 6.1

	 	Events of Default
	 	 	93	 
	Section 6.2

	 	Acceleration
	 	 	96	 
	Section 6.3

	 	Other Remedies
	 	 	96	 
	Section 6.4

	 	Waiver of Past Defaults
	 	 	97	 
	Section 6.5

	 	Control by Majority
	 	 	97	 
	Section 6.6

	 	Limitation on Suits
	 	 	97	 
	Section 6.7

	 	Rights of Holders to Receive Payment
	 	 	98	 
	Section 6.8

	 	Collection Suit by Trustee
	 	 	98	 
	Section 6.9

	 	Trustee May File Proofs of Claim
	 	 	98	 
	Section 6.10

	 	Priorities
	 	 	99	 






ii









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 6.11

	 	Undertaking for Costs
	 	 	99	 
	 
	 

	 	ARTICLE VII	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	TRUSTEE	 	 	 	 
	 
	 	 	 	 	 	 
	Section 7.1

	 	Duties of Trustee
	 	 	100	 
	Section 7.2

	 	Rights of Trustee
	 	 	101	 
	Section 7.3

	 	Individual Rights of Trustee
	 	 	103	 
	Section 7.4

	 	Trustee’s Disclaimer
	 	 	103	 
	Section 7.5

	 	Notice of Defaults
	 	 	103	 
	Section 7.6

	 	Reports by Trustee to Holders
	 	 	103	 
	Section 7.7

	 	Compensation and Indemnity
	 	 	103	 
	Section 7.8

	 	Appointment and Replacement of Trustee
	 	 	105	 
	Section 7.9

	 	Successor Trustee by Merger
	 	 	106	 
	Section 7.10

	 	Eligibility; Disqualification
	 	 	106	 
	Section 7.11

	 	Preferential Collection of Claims Against the Company
	 	 	106	 
	Section 7.12

	 	Trustee’s Application for Instruction from the Company
	 	 	106	 
	Section 7.13

	 	Paying Agents
	 	 	107	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE VIII	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	DISCHARGE OF INDENTURE; DEFEASANCE	 	 	 	 
	 
	 	 	 	 	 	 
	Section 8.1

	 	Discharge of Liability on Securities; Defeasance
	 	 	108	 
	Section 8.2

	 	Conditions to Defeasance
	 	 	109	 
	Section 8.3

	 	Application of Trust Money
	 	 	111	 
	Section 8.4

	 	Repayment to the Company
	 	 	111	 
	Section 8.5

	 	Indemnity for U.S. Government Obligations
	 	 	111	 
	Section 8.6

	 	Reinstatement
	 	 	111	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE IX	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	AMENDMENTS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 9.1

	 	 Without Consent of Holders
	 	 	113	 
	Section 9.2

	 	 With Consent of Holders
	 	 	114	 
	Section 9.3

	 	 Compliance with Trust Indenture Act
	 	 	116	 
	Section 9.4

	 	 Revocation and Effect of Consents and Waivers
	 	 	116	 
	Section 9.5

	 	 Notation on or Exchange of Securities
	 	 	117	 
	Section 9.6

	 	 Trustee To Sign Amendments
	 	 	117	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE X	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	SUBORDINATION	 	 	 	 
	 
	 	 	 	 	 	 
	Section 10.1

	 	Agreement To Subordinate
	 	 	118	 
	Section 10.2

	 	Liquidation, Dissolution, Bankruptcy
	 	 	118	 






iii









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 10.3

	 	Default on Senior Indebtedness
	 	 	118	 
	Section 10.4

	 	Acceleration of Payment of Securities
	 	 	119	 
	Section 10.5

	 	When Distribution Must Be Paid Over
	 	 	119	 
	Section 10.6

	 	Subrogation
	 	 	120	 
	Section 10.7

	 	Relative Rights
	 	 	120	 
	Section 10.8

	 	Subordination May Not Be Impaired by Company
	 	 	120	 
	Section 10.9

	 	Rights of Trustee and Paying Agent
	 	 	120	 
	Section 10.10

	 	Distribution or Notice to Representative
	 	 	120	 
	Section 10.11

	 	Article X Not To Prevent Events of Default or Limit Right To Accelerate
	 	 	 121	 
	Section 10.12

	 	Trust Moneys Not Subordinated
	 	 	121	 
	Section 10.13

	 	Trustee Entitled To Rely
	 	 	121	 
	Section 10.14

	 	Trustee To Effectuate Subordination
	 	 	121	 
	Section 10.15

	 	Trustee Not Fiduciary for Holders of Senior Indebtedness
	 	 	121	 
	Section 10.16

	 	Reliance by Holders of Senior Indebtedness on Subordination Provisions
	 	 	121	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE XI	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	NOTE GUARANTEES	 	 	 	 
	 
	 	 	 	 	 	 
	Section 11.1

	 	Note Guarantees
	 	 	123	 
	Section 11.2

	 	Limitation on Liability; Termination, Release and Discharge
	 	 	124	 
	Section 11.3

	 	Right of Contribution
	 	 	125	 
	Section 11.4

	 	No Subrogation
	 	 	126	 
	Section 11.5

	 	Subordination of Note Guarantees
	 	 	126	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE XII	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	COLLATERAL	 	 	 	 
	 
	 	 	 	 	 	 
	Section 12.1

	 	The Collateral
	 	 	127	 
	Section 12.2

	 	Maintenance of Collateral
	 	 	127	 
	Section 12.3

	 	Further Assurances
	 	 	128	 
	Section 12.4

	 	After Acquired Property
	 	 	128	 
	Section 12.5

	 	Agreements Requiring Application of Proceeds of Collateral
	 	 	129	 
	Section 12.6

	 	Real Estate Mortgages and Filings and Leasehold Interests
	 	 	129	 
	Section 12.7

	 	Release of Liens on the Collateral
	 	 	130	 
	Section 12.8

	 	Authorization of Actions to be Taken by the Trustee
or the Collateral Agent Under the Collateral Documents
	 	 	131	 
	 
	 	 	 	 	 	 
	 

	 	ARTICLE XIII	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	MISCELLANEOUS	 	 	 	 
	 
	 	 	 	 	 	 
	Section 13.1

	 	Trust Indenture Act Controls
	 	 	134	 
	Section 13.2

	 	Notices
	 	 	134	 
	Section 13.3

	 	Communication by Holders with other Holders
	 	 	135	 
	Section 13.4

	 	Certificate and Opinion as to Conditions Precedent
	 	 	135	 






iv









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 13.5

	 	Statements Required in Certificate or Opinion
	 	 	136	 
	Section 13.6

	 	When Securities Disregarded
	 	 	136	 
	Section 13.7

	 	Rules by Trustee, Paying Agent and Registrar
	 	 	136	 
	Section 13.8

	 	Legal Holidays
	 	 	137	 
	Section 13.9

	 	Governing Law
	 	 	137	 
	Section 13.10

	 	No Recourse Against Others
	 	 	137	 
	Section 13.11

	 	Successors
	 	 	137	 
	Section 13.12

	 	Multiple Originals
	 	 	137	 
	Section 13.13

	 	Table of Contents; Headings
	 	 	137	 
	Section 13.14

	 	Force Majeure
	 	 	137	 






	 	 	 
	SCHEDULE 2.6

	 	FRN Investor Approval List
	SCHEDULE 12.6

	 	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











 





               AMENDED AND RESTATED INDENTURE dated as of October___, 2009 (the “Indenture”), 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. (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.



               The Company, the Parent, the Subsidiary Guarantors and the Initial Holder have entered into an
Indenture dated as of June 16, 2006 (as amended through the date hereof, the “Original
Indenture”) pursuant to which the Company issued and the Initial Holder purchased and holds the
Company’s 16% Senior Subordinated Pay-In-Kind Notes due 2011 (the “Original Notes”).



               For and in consideration of the premises and the exchange of the Original Notes held by the
Initial Holder for, and the purchase of, the Securities (as defined below) by the Initial Holder
thereof, each party hereto wishes to amend and restate the Original Indenture on terms and
conditions set forth in this Indenture and covenants and agrees as follows for the benefit of the
other parties and for the equal and ratable benefit of all Holders of (i) $80,431,000 aggregate
principal amount of 16% Senior Subordinated Secured Notes due 2021 issued on the date hereof (the
“Initial Securities”) and (ii) if and when issued, an unlimited principal amount of
additional 16% Senior Subordinated Secured Notes due 2021 in a non-registered offering that may be
issued from time to time 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.





2









 








          “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 3.7, 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 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);



3









 





               (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 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.



4









 





          “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 or the
Initial Holder, as applicable.




          “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).





5









 








          “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;



               (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









 





               (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 (5) 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.





7









 








          “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 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



8









 







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 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;



9









 





               (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”, 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



10









 





               (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) non-cash 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.





11









 








          “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 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



12









 




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.”




          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



13









 







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



        (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.



14









 





          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 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.





15









 








          “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 3.10 of this Indenture and
such repurchase or redemption complies with Section 3.3.




          “Equity Issuance” means a sale or issuance for cash by the Company or Parent, as the case may
be, of its Capital Stock, or options, warrants or rights with respect to its Capital Stock to the
public or to institutional investors, other than (x) public offerings with respect to the Company’s
or the Parent’s, as the case may be, Capital Stock, or options, warrants or rights to acquire
Capital Stock registered on Form S-4 or S-8, (y) an issuance to any Subsidiary or (z) any offering
of Capital Stock issued in connection with a transaction that constitutes a Change of Control. For
the avoidance of doubt, an “Equity Issuance” will not include the issuance of warrants in
accordance with the Exchange Agreements, the exercise of any outstanding option, right or warrant
for Capital Stock of the Company or Parent, as the case may be, in accordance with the terms
thereof in effect on the Issue Date, or the issuance of Capital Stock or options, warrants, rights
or other securities to acquire Capital Stock of the Company or Parent, as the case may be, pursuant
to any employee stock or stock option compensation plan.




          “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




16









 







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.




          “Excess Cash Proceeds” means (i) with respect to an Equity Issuance or Indebtedness Incurred
by the Company to repay, refinance, repurchase or redeem the Floating Rate Notes in their entirety,
the cash proceeds of such Equity Issuance or Incurrence of Indebtedness net of (a) principal,
interest and other amounts required to repay, refinance, repurchase or redeem the Floating Rate Notes in their entirety and (b) legal,
accounting, underwriting or private placement agent fees, discounts or commissions, title and
recording tax expenses and other fees and expenses, 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 Equity
Issuance or Incurrence of Indebtedness; and (ii) with respect to an Equity Issuance or Senior
Subordinated Indebtedness or Subordinated Obligations Incurred by the Company pursuant to the first
paragraph of Section 3.2 or clause (14) of the second paragraph of Section 3.2 after the
Floating Rate Notes are no longer outstanding, the cash proceeds of such Equity Issuance or Senior
Subordinated Indebtedness or Subordinated Obligations net of legal, accounting, underwriting or
private placement agent fees, discounts or commissions, title and recording tax expenses and other
fees and expenses, 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 Equity Issuance or Incurrence
of Senior Subordinated Indebtedness or Subordinated Obligations. For the avoidance of doubt, if
the Company receives Excess Cash Proceeds from a concurrent Equity Issuance and Incurrence of
Senior Subordinated Indebtedness or Subordinated Obligations, the Excess Cash Proceeds shall be
calculated by aggregating the cash proceeds of such Equity Issuance and Incurrence of Indebtedness
and subtracting the aggregate amounts described above.




          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.




          “Exchange Documents” means the Debt Exchange Agreement, dated as of October 28, 2009, by and
among the Company, Parent and the Initial Holder and the Amended and Restated Registration Rights
Agreement, dated the date hereof, between Parent and the Initial Holder.




          “Floating Rate Notes” shall mean (i) the Company’s Floating Rate Senior Secured Notes due 2011
issued under the indenture (the “Floating Rate Notes Indenture”), dated June 16, 2006,
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 June 16, 2006, among the Company,
the Note Guarantors and the initial purchasers named therein.





17









 








          “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” 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 Issue Date 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



18









 




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, so long as any
Floating Rate Notes remain outstanding, 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 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. The
Holders are designated as “Third Priority Creditors” for purposes of the Intercreditor Agreement.




          “Initial Holder” has the meaning ascribed to it in the introductory paragraph of the
Indenture. The Initial Holder is designated as a “Third Priority Creditor” for purposes of the
Intercreditor Agreement.





19









 








          “Initial Interest Payment Date” means the earlier to occur of (a) June 1, 2011 and (b) the
first regularly scheduled interest payment date following such date as the Floating Rate Notes are
repaid in full.




          “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;



               (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



20









 




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”);



               (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:




21












 






               (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 Related 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 June 16, 2006, by and
among J.P. Morgan Chase Bank, N.A., in its capacity as administrative agent (or its successor)
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 (or any agent or
representative on its behalf), the Bank of New York Trust Company, N.A. as the collateral agent for
the Floating Rate Notes (or its successor), 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
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;



22









 





               (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 October 28, 2009.




          “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 an equity 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 13.8.




23









 








          “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).




          “More Favorable Covenant” means a covenant that is (i) of the nature described in Article III
or VI of this Indenture or Article III or VI of the indenture governing the Floating Rate Notes and
(ii) in any respect more restrictive or burdensome to the Parent, the Company or any Restricted
Subsidiary or more favorable to the lenders or other counterparties thereunder than is contained in
this Indenture or any Collateral Document as of the date of this Indenture.




          “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) in the case of an Asset Disposition, 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.



24









 





          “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 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.




          “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.




25









 








          “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.




          “Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the
Initial Holder or the Trustee, as applicable. 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, as
applicable, 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 Holder” means the Initial Holder, its Affiliates and assigns.




          “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
or Person (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,



26









 




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;



               (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 June 16, 2006 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 June 16, 2006 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;



27









 





               (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 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 June 16, 2006 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 June 16, 2006, 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,



28









 




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 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;



29









 





               (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;



               (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 June 16, 2006 (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;



30









 




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 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 Original Notes to the date on
which interest on the Initial Securities begins to accrue at 16% under this Indenture.




          “Preferred Stock,” as applied to the Capital Stock of any entity, 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.




31









 








          “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);




               (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



32









 





               (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
Initial Holder or the Trustee, if any, by filing with the Initial Holder or Trustee, as applicable,
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 June 16, 2006 or Incurred in compliance with the Original Indenture prior
to the date of this Indenture or 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 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



33









 




duplication, any additional Indebtedness Incurred to pay interest or premiums required by the
instruments governing such existing Indebtedness and fees Incurred in connection therewith);




               (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; and



               (5) if (a) no Floating Rate Notes are outstanding at such time and (b) the Indebtedness being
refinanced is Senior Subordinated Indebtedness (or Guarantor Subordinated Indebtedness), such
Refinancing Indebtedness shall be Pari Passu Indebtedness (or pari passu in respect of Guarantor
Subordinated Indebtedness) or a Subordinated Obligation.



          “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 June 16,
2006.




          “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 as amended,
restated, or modified from time to time.




          “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.




          “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.




34









 








          “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 June 16, 2006 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, so long as any Floating Rate Notes remain outstanding, 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 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 Senior Indebtedness or Guarantor
Senior Indebtedness or Indebtedness of a Foreign Subsidiary.




35









 








          “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; for avoidance of doubt
the Stated Maturity with respect to the Securities shall be the earlier of (a) June 1, 2021, and
(b) 180 days after the earliest scheduled maturity date of any tranche of Refinancing Indebtedness
Incurred with respect to any portion of the Floating Rate Notes; provided, however, that in no
event shall the Stated Maturity of the Securities be a date prior to September 1, 2011.




          “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 such Guarantees.
Each such Subsidiary Guarantee will be in the form prescribed by this Indenture.



36









 





          “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.




          “Transaction Documents” means the Securities Documents and the Exchange Documents.




          “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;



37









 





               (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 or the Initial Holder, as applicable, by filing with the Trustee or the Initial Holder, as
applicable, 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



38









 






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
	“Affiliate Transaction”
	 	 	3.8	 
	“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”
	 	 	3.10	 
	“Change of Control Payment”
	 	 	3.10	 
	“Change of Control Payment Date”
	 	 	3.10	 
	“Company Order”
	 	 	2.2	 
	“covenant defeasance option”
	 	 	8.1	(b)
	“cross acceleration provision”
	 	 	6.1	(6)(b)
	“Debt Prepayment Offer”
	 	 	3.2	 
	“Debt Prepayment Offer Amount”
	 	 	3.2	 
	“Debt Prepayment Offer Period”
	 	 	3.2	 
	“Debt Prepayment Offer Price”
	 	 	3.2	 
	“Debt Prepayment Purchase Date”
	 	 	3.2	 
	“Defaulted Interest”
	 	 	2.12	 
	“Equity Issuance Offer”
	 	 	3.21	 
	“Equity Issuance Offer Amount”
	 	 	3.21	 






39









 






	 	 	 	 	 
	Term	 	Defined in Section
	“Equity Issuance Offer Period”
	 	 	3.21	 
	“Equity Issuance Offer Price”
	 	 	3.21	 
	“Equity Issuance Purchase Date”
	 	 	3.21	 
	“Event of Default”
	 	 	6.1	 
	“Excess Proceeds”
	 	 	3.5	 
	“Guarantor Obligations”
	 	 	11.1	 
	“legal defeasance option”
	 	 	8.1	(b)
	“OID Legend”
	 	 	2.1	(e)
	“Pari Passu Notes”
	 	 	3.5	 
	“Payment Blockage Period”
	 	 	10.3	 
	“payment default”
	 	 	6.1	(6)(a)
	“Paying Agent”
	 	 	2.3	 
	“Premises”
	 	 	12.6	 
	“Private Placement Legend”
	 	 	2.1	(d)
	“protected purchaser”
	 	 	2.8	 
	“Registrar”
	 	 	2.3	 
	“Resale Restriction Termination Date”
	 	 	2.6	(a)
	“Restricted Payment”
	 	 	3.3	 
	“Restricted Securities”
	 	 	2.1	(a)
	“Special Interest Payment Date”
	 	 	2.12	(a)
	“Special Record Date”
	 	 	2.12	(a)
	“Successor Company”
	 	 	4.1	 
	“Successor Parent”
	 	 	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.




40












 





               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.



41









 





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 $80,431,000. In addition,
the Company may issue, from time to time in accordance with these provisions 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 Debt Prepayment Offer pursuant to Section 3.2, a
Change of Control Offer pursuant to Section 3.10, or an Asset Disposition Offer pursuant to
Section 3.5 or an Equity Issuance Offer (as defined herein) pursuant to Section
3.21.



               The Initial Securities shall be known and designated as “Senior Subordinated Secured Notes due
2021” of the Company. Additional Securities shall be known and designated as “Senior Subordinated
Secured Note due 2021” 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 Initial Holder or
upon request by the Trustee, to the Trustee, at or prior to the delivery of the



42









 





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 Debt
Exchange Agreement, dated October 28, 2009, among the Company, Parent 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, if any, as hereinafter
provided; provided, that upon the request of any Holder of Securities, the Company shall take all
reasonable actions necessary to deposit such Securities in book-entry form with The Depository
Trust Company, or applicable successor depository entity. 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, if any, 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. At the option of the
Company, interest may be paid by issuing Additional Securities in principal amount equal to each
installment of interest which shall be delivered to the Initial Holder or the Trustee, as
applicable. 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, if any, 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).



43









 





The Company and the Initial Holder or Trustee, as applicable, 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 or the
Trustee, as applicable, 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 or (other than any Securities issued in lieu of cash interest during any PIK
Period), 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 ONE YEAR 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
AND/OR CERTIFICATION REASONABLY SATISFACTORY TO EACH



44









 





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 (the “OID
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, 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
$80,431,000 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, if any, 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



45









 





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, if any, upon Company Order of the successor Person, and if there is no
Trustee, the Company, 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. 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.



46









 





               The Company will initially 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 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 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 one year 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,



47









 





the receipt by the Trustee or its agent of an opinion of counsel, certification and/or other
information reasonably 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.




               (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 or the
Initial Holder’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



48









 





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.




               (f) Sales to Existing Investors. So long as any Floating Rate Notes remain
outstanding and there is no outstanding Default or an Event of Default under this Indenture,
the Initial Holder shall not knowingly sell, exchange, transfer, negotiate, gift, convey in
trust, assign, or otherwise dispose of all or any portion of its Securities to any Person
set forth on Schedule 2.6 hereto at a time when such Person beneficially owns 10% or more of
the outstanding Floating Rate Notes without the prior written consent of the Company, such
consent not to be unreasonably withheld, conditioned or delayed.



               Section 2.7 Form of Certificate to be Delivered in Connection with Transfers.



[Date]





49












 





Company/Trustee

[address]




Attention: General Counsel/Corporate Trust Administration




	 	 	 	 	 	 	 
	 

	 	Re:
	 	Libbey Glass Inc.

Senior Subordinated Secured Notes due 2021
	 	 






Ladies and Gentlemen:




               This certificate is delivered to request a transfer of $                     principal amount of the
Senior Subordinated Secured Notes due 2021 (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 one year 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



50









 





“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. 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 and/or certifications reasonably 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



51









 





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.



               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.



52









 





               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 2.10 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 2.11. 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



53









 





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 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 12.2 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.



54









 





               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 number. The Company shall promptly notify the Trustee in
writing of any change in any CUSIP, Common Code or ISIN number.



               Section 2.15 Tax Reporting. In accordance with Treasury Regulation Section 1.1272-1(c)(5),
the Company and Holders shall presume that the Company will repay the Securities on December 1,
2010 in order to determine the yield of the Securities for federal income tax purposes.




55












 





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 Note 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 Note
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 Note 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 Note 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 Note 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 Note 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 Note
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.



56









 





               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 held by a Person other than the Company
or a Restricted Subsidiary of the Company; and



57









 






               (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 June 16, 2006 and in accordance
with the provisions of the Original Indenture and the Subsidiary Guarantees, (b) any Indebtedness
(other than the Indebtedness described in clauses (1), (2), (3), (6), (8), (9), (10) and (11))
outstanding on June 16, 2006 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;



               (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



58









 




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 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)



59









 




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.



               The Company will be required to make an offer (the “Debt Prepayment Offer”) to all Holders of
Securities to purchase the maximum principal amount of Securities that may be purchased out of
Excess Cash Proceeds in respect of an Incurrence of Indebtedness if:




          (i) the Company Incurs Refinancing Indebtedness in respect of the Floating Rate Notes,
the proceeds of which are used to repay, refinance, repurchase or redeem the Floating Rate
Notes in their entirety; or




          (ii) after the Floating Rate Notes are no longer outstanding, the Company Incurs Senior
Subordinated Indebtedness or Subordinated Obligations pursuant to the first paragraph or
clause (14) of the second paragraph (excluding any Refinancing Indebtedness Incurred in
respect of Indebtedness described in clause (12)), of this Section 3.2;


provided, however, that in no event shall the Company be required to make a Debt Prepayment Offer
if and to the extent that such Debt Prepayment Offer is prohibited under a Credit Facility. For
the avoidance of doubt, “Credit Facility” shall not include any issuance of public debt securities
for purposes of this Section 3.2. If the Company Incurs any Refinancing Indebtedness in
respect of the Indebtedness described in clause (1) of the second paragraph of this Section
3.2 or in respect of the Floating Rate Notes, the Company will endeavor to obtain the approval
of the lenders or holders of such Refinancing Indebtedness to the Company’s making of a Debt
Prepayment Offer as described in this Section 3.2 under the terms of such Refinancing
Indebtedness with the Excess Cash Proceeds of any Indebtedness subsequently Incurred by the Company
pursuant to the first paragraph, or clause (14) of the second paragraph, of this Section
3.2 (including, for purposes of such approval, proceeds from the Incurrence of Indebtedness
ranking senior in right of payment to the Securities net of the fees and expenses described in the





60









 







definition of “Excess Cash Proceeds”). In no event, however, shall the preceding sentence obligate
the Company to obtain such approval if, in exchange for such approval, the lenders or holders of
the applicable Refinancing Indebtedness would impose upon the Company fees for such approval or
otherwise would require the Company to accept terms of the Refinancing Indebtedness that are less
favorable to the Company than would be offered to the Company if such approval were not provided.
If such approval is not obtained, the Company shall not be permitted to incur any Senior
Subordinated Indebtedness or Subordinated Obligations other than to repay, refinance, repurchase or
redeem the Floating Rate Notes.




               If the Company is required to make a Debt Prepayment Offer, the offer price shall be payable
in cash in an amount equal to 100% of the principal amount of the Securities that may be purchased
pursuant to this paragraph of Section 3.2, plus accrued and unpaid interest to the date of
purchase, in accordance with the procedures set forth in this Indenture (the “Debt Prepayment
Offer Price”). To the extent that the aggregate amount of Securities so validly tendered and
not properly withdrawn pursuant to a Debt Prepayment Offer is less than the Excess Cash Proceeds in
respect of an applicable Incurrence of Indebtedness, the Company may use any remaining Excess Cash
Proceeds for general corporate purposes, subject to other covenants contained in this Indenture.
If the aggregate principal amount of Securities surrendered by Holders thereof exceeds the amount
of Excess Cash Proceeds in respect of an applicable Incurrence of Indebtedness, the Initial Holder
or the Trustee, as applicable, shall select the Securities to be purchased on a pro rata basis on
the basis of the aggregate principal amount of Securities requested to be repurchased. The Company
may fulfill its obligation to offer to repurchase the Securities pursuant to this Section
3.2 by making one repurchase offer under this Section 3.2 and under Section
3.21 to the extent of any Excess Cash Proceeds received in connection with a concurrent Equity
Issuance and Incurrence of Indebtedness.



               The Debt Prepayment 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
“Debt Prepayment Offer Period”). The Company will mail a notice of a Debt Prepayment Offer
first class, postage prepaid, to the record holders shown on the register of Holders within seven
days of receipt of Excess Cash Proceeds, with a copy to the Trustee, if any, offering to purchase
the Securities as described above. Each notice of a Debt Prepayment 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 “Debt Prepayment Purchase Date”),
the maximum amount of Securities that may be purchased pursuant to the Debt Prepayment Offer, the
Debt Prepayment Offer Price, and a description of the transaction giving rise to the Debt
Prepayment Offer. No later than five Business Days after the termination of the Debt Prepayment
Offer Period, the Company will purchase the principal amount of Securities required to be purchased
pursuant to this Section 3.2 (the “Debt Prepayment Offer Amount”) or, if less than
the Debt Prepayment Offer Amount has been so validly tendered, all Securities validly tendered in
response to the Debt Prepayment Disposition Offer.



               If the Debt Prepayment 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



61









 




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 Debt
Prepayment Offer for periods prior to the interest payment date.




               On or before the Debt Prepayment Purchase Date, the Company will, to the extent lawful, accept
for payment, on a pro rata basis to the extent necessary, the Debt Prepayment Offer Amount of
Securities or portions of Securities so validly tendered and not properly withdrawn pursuant to the
Debt Prepayment Offer, or if less than the Debt Prepayment Offer Amount has been validly tendered
and not properly withdrawn, all Securities so validly tendered and not properly withdrawn. The
Company will deliver to the Trustee or the Initial Holder, as applicable, 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 3.2. 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 Debt
Prepayment Purchase Date) mail or deliver to each tendering Holder of Securities an amount equal to
the purchase price of the Securities 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, if any, upon delivery of an Officers’ Certificate
from the Company, or if there is no Trustee, 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. 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 Debt
Prepayment Offer on the Debt Prepayment Purchase Date.



               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 3.2, 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.



               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;



62









 





               (2) all Indebtedness outstanding on June 16, 2006 under the Senior Secured Credit Agreement
shall be deemed Incurred on June 16, 2006 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 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, and 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



63









 




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
was a party as of June 16, 2006 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



64









 






               (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




               (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 June 16, 2006 (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 (without regard to any effect of the exchange of Original
Notes for the Securities pursuant to the Debt Exchange Agreement) of:



65









 






               (i) 50% of Consolidated Net Income for the period (treated as one accounting
period) from the beginning of the first fiscal quarter commencing after June 16,
2006 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 June 16, 2006 (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
(a) 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 and (b) Excess Cash Proceeds
received by the Company or a Restricted Subsidiary from an Equity Issuance to the
extent applied to redeem Securities in compliance with the provisions of Section
3.21, to the extent applicable; 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 June 16, 2006 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 June 16, 2006 and redemptions and repurchases of such Restricted
Investments from the Company or its Restricted Subsidiaries and repayment of loans
or advances from the Company



66









 






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 June 16, 2006 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 June 16, 2006, 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 June 16, 2006 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; provided, further, however, that, if required, the Company or the Restricted
Subsidiary, as applicable, shall have prior to or simultaneously with such purchase, repurchase,
redemption, defeasance or other acquisition or retirement complied with the requirement to
consummate an Equity Issuance Offer pursuant to Section 3.21;



               (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



67









 




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; provided, however, that, if
required, the Company or the Restricted Subsidiary, as applicable, shall have prior to or
simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or
retirement complied with the requirement to consummate a Debt Prepayment Offer pursuant to
Section 3.2;




               (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; provided, however,
that, if required, the Company or the Restricted Subsidiary, as applicable, shall have prior to or
simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or
retirement complied with the requirement to consummate an Equity Issuance Offer pursuant to
Section 3.21;



               (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



68









 




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 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 100% of the principal
amount of such Subordinated Obligation in the event of a Change of Control in accordance with
provisions similar to Section 3.10, (ii) at a purchase price not greater than 100% of the
principal amount thereof in accordance with provisions similar to Section 3.5 and (iii) at
a




69












 




purchase price not greater than 100% of the principal amount thereof in accordance with
provisions similar to the Equity Issuance Offer in Section 3.21; 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, Asset Disposition Offer or Equity
Issuance 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, Asset Disposition Offer or Equity Issuance 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;



               (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 or the Initial Holder, as applicable, such determination to be based upon an opinion or
appraisal issued by an Independent Financial Advisor 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 or the Initial Holder, as
applicable, an Officers’ Certificate stating that such Restricted Payment is permitted and setting
forth the basis upon which the calculations required



70









 




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:




               (i) any encumbrance or restriction pursuant to an agreement in effect at or
entered into on June 16, 2006, 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



71









 







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
June 16, 2006 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);



72









 






               (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 June 16, 2006 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:



73









 






               (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; 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 366th 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



74









 




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, if any, offering to purchase the Securities and Pari Pssu 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. 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, if any, upon delivery of an



75









 




Officers’ Certificate from the Company, will authenticate and mail or deliver, or if there is
no Trustee, the Company will mail and 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



               (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, within 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.



76









 





               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 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 Financial Advisor
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);



77









 





               (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 was a party as of or on June 16, 2006, 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 June 16, 2006 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 June 16, 2006;



               (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;



               (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;
and



               (9) any transaction between the Company or a Restricted Subsidiary and a Permitted Holder.



               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



78









 




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 100% 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:



               (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



79









 





               (3) deliver or cause to be delivered to the Trustee or the Initial Holder, as applicable, 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.



               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 3.10 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 3.10. 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.



80









 





               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.



               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, as
applicable, 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



81









 




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 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



82









 







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.



               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 10 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



83









 




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.



               Section 3.21 Repurchase Offer Upon Equity Issuances.



               The Company will be required to make an offer (the “Equity Issuance Offer”) to all
Holders of Securities to purchase the maximum principal amount of Securities that may be purchased
out of Excess Cash Proceeds in respect of an Equity Issuance if:




          (i) the Company or Parent consummates an Equity Issuance the proceeds of which are used
to repay, refinance, repurchase or redeem the Floating Rate Notes in their entirety; or




          (ii) after the Floating Rate Notes are no longer outstanding, the Company or Parent
consummates an Equity Issuance;


provided, however, that in no event shall the Company be required to make an Equity Issuance Offer
if and to the extent that such Equity Issuance Offer is prohibited under a Credit Facility. For
the avoidance of doubt, “Credit Facility” shall not include any issuance of public debt securities
for purposes of this Section 3.21. If the Company Incurs any Refinancing Indebtedness in
respect of the Indebtedness described in clause (1) of the second paragraph of Section 3.2
or in respect of the Floating Rate Notes, the Company will endeavor to obtain the approval of the
lenders or holders of such Refinancing Indebtedness to the Company’s making of an Equity Issuance
Offer as described in this Section 3.21 under the terms of such Refinancing Indebtedness
with the Excess Cash Proceeds of any subsequent Equity Issuance. In no event, however, shall the
preceding sentence obligate the Company to obtain such approval if, in exchange for such approval,
the lenders or holders of the applicable Refinancing Indebtedness would impose upon the Company
fees for such approval or otherwise would require the Company to accept terms of the Refinancing
Indebtedness that are less favorable to the Company than would be offered to the Company if such
approval were not provided. If such approval is not obtained, neither the Company nor Parent shall
be permitted to make any Equity Issuance other than to repay, refinance, repurchase or redeem the
Floating Rate Notes.




84









 








               If the Company is required to make an Equity Issuance Offer, the offer price shall be payable
in cash in an amount equal to 100% of the principal amount of the Securities that may be purchased
pursuant to this Section 3.21, plus accrued and unpaid interest to the date of purchase, in
accordance with the procedures set forth in this Indenture (the “Equity Issuance Offer
Price”). To the extent that the aggregate amount of Securities so validly tendered and not
properly withdrawn pursuant to an Equity Issuance Offer is less than the Excess Cash Proceeds in
respect of an applicable Equity Issuance, the Company may use any remaining Excess Cash Proceeds
for general corporate purposes, subject to other covenants contained in this Indenture. If the
aggregate principal amount of Securities surrendered by Holders thereof exceeds the amount of
Excess Cash Proceeds in respect of an applicable Equity Issuance, the Initial Holder or the
Trustee, as applicable, shall select the Securities to be purchased on a pro rata basis on the
basis of the aggregate principal amount of Securities requested to be repurchased. The Company may
fulfill its obligation to offer to repurchase the Securities pursuant to this Section 3.21
by making one repurchase offer under this Section 3.21 and under Section 3.2 to the
extent of any Excess Cash Proceeds received in connection with a concurrent Equity Issuance and
Incurrence of Indebtedness.



               The Equity Issuance 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
“Equity Issuance Offer Period”). The Company will mail a notice of an Equity Issuance Offer
first class, postage prepaid, to the record holders shown on the register of Holders within seven
days of receipt of Excess Cash Proceeds, with a copy to the Trustee, if any, offering to purchase
the Securities as described above. Each notice of an Equity Issuance 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 “Equity Issuance Purchase Date”),
the maximum amount of Securities that may be purchased pursuant to the Equity Issuance Offer, the
Equity Issuance Offer Price, and a description of the transaction giving rise to the Equity
Issuance Offer. No later than five Business Days after the termination of the Equity Issuance
Offer Period, the Company will purchase the principal amount of Securities required to be purchased
pursuant to this Section 3.21 (the “Equity Issuance Offer Amount”) or, if less than
the Equity Issuance Offer Amount has been so validly tendered, all Securities validly tendered in
response to the Equity Issuance Offer.



               If the Equity Issuance 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 Equity Issuance Offer for
periods prior to the interest payment date.



               On or before the Equity Issuance Purchase Date, the Company will, to the extent lawful, accept
for payment, on a pro rata basis to the extent necessary, the Equity Issuance Offer Amount of
Securities or portions of Securities so validly tendered and not properly withdrawn pursuant to the
Equity Issuance Offer, or if less than the Equity Issuance Offer Amount has been validly tendered
and not properly withdrawn, all Securities so validly tendered and not properly



85









 




withdrawn. The Company will deliver to the Trustee or the Initial Holder, as applicable, 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 3.21. 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 Equity Issuance Purchase Date) mail or deliver to each tendering Holder of Securities an amount
equal to the purchase price of the Securities 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, if any, upon delivery of an Officers’
Certificate from the Company, or if there is no Trustee, 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. 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 Equity
Issuance Offer on the Equity Issuance Purchase Date.




               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 3.21, 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.



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 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 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;



86









 





               (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 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) 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)



87









 




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
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:



88









 





               (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



               (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 3.10 and this Section 4.1.



89









 





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 or the
Initial Holders, as applicable, 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.



               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.



90









 





               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,



91









 





               (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.



               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 3.13
(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.



92









 





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;



               (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




93












 






                    (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;




                         (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



94









 






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
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



95









 




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 the Trustee, if
any, may, and the Trustee or the Initial Holder, as applicable, 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, as applicable, may pursue any available remedy by proceeding



96









 




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 Initial Holder or the Trustee, as applicable, 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 no 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.



               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, if appointed, 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:



97









 





               (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.



               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



98









 




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. Subject to the Intercreditor Agreement, 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 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.




99












 





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.



100









 






               (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.




               (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.



101









 






               (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 13.2, 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



102









 






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 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, 2010, 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



103









 




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 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.



104









 





               Section 7.8 Appointment and Replacement of Trustee. 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 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.



105









 





               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 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.



106









 





               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.



107









 





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, as applicable,
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, as applicable, 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 applicable, 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, as applicable, 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 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, as
applicable, 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



108









 






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).




               (c) Upon satisfaction of the conditions set forth herein and upon request of the
Company, the Initial Holder or the Trustee, as applicable, shall acknowledge in writing the
discharge of those obligations that the Company terminates.



               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, 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, as
applicable, 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, as applicable, 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



109









 




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, as applicable, 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, as applicable, 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
Initial Holder or the Trustee, as applicable, 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, as applicable, 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



110









 




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, as applicable, 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, if any, 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 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, as applicable, 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.



111









 





               The Initial Holders and the Trustee’s rights under this Article VIII shall survive
termination of this Indenture.



112









 





ARTICLE IX




AMENDMENTS




               Section 9.1 Without Consent of Holders. The Company, the Note Guarantors and the Initial
Holder or the Trustee, as applicable, 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;



               (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 12.7 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) intentionally omitted; or



113









 





               (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.



               Notwithstanding anything to the contrary in this Article IX, and with no further action
necessary on the part of the Company, the Parent, the Note Guarantors, the Initial Holder, any
other Holder or the Trustee, as applicable, this Indenture shall be amended or modified
automatically to incorporate any More Favorable Covenant set forth in (a) the indenture governing
the Floating Rate Notes, but only if and to the extent such indenture is amended (whether by tender
offer, consent, exchange or otherwise) after the date of this Indenture or (b) to the extent no
Floating Rate Notes remain outstanding, any indenture, loan agreement, collateral document or other
written evidence of Indebtedness (other than Indebtedness Incurred under any Credit Facility)
Incurred as Refinancing Indebtedness with respect to all or any portion of the Floating Rate Notes.
For the avoidance of doubt, “Credit Facility” shall not include any issuance of public debt
securities for purposes of this paragraph. Upon request of the Initial Holder or any other holder
of the Securities, the Company will use its best efforts so that the amendments contemplated by
this paragraph shall be evidenced by a supplemental indenture to this Indenture. The Company will
notify the Initial Holder or the Trustee of any issuance of any new Indebtedness that would be
subject to the provision in this paragraph. Any disputes pursuant to this paragraph shall be
settled by an arbitrator at the expense of the Company.



               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 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



114









 




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, if any, 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 3.10, 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) modify the prepayment provisions contained in Sections 3.2 and 3.21 of
this Indenture;



               (7) 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;



               (8) make any change to the amendment provisions that require each Holder’s consent or to the
waiver provisions;



               (9) modify the Note Guarantees in any manner adverse to the Holders of the Securities;



               (10) 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 Collateral Documents or Intercreditor Agreement other than
in accordance with this Indenture, the Collateral Documents or the Intercreditor Agreement;



115









 





               (11) make any change to the subordination provisions of the Indenture that adversely affects
the rights of any Holder of Securities; or



               (12) release Collateral other than in accordance with this Indenture, the Collateral Documents
and the Intercreditor Agreement.



               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



116









 




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, 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).



117









 





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 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



118









 




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
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 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, if appointed, 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.



119









 





               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 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).



120









 





               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.



               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



121









 




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.





122












 





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 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;



123









 




 (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 3.12, 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 11.2.
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).



               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



124









 




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 3.12 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.




               (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, as applicable, 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



125









 





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.



126









 





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



127









 




 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 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.






128









 






               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 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 12.6 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 thereafter 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



129









 






least third-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 12.6 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



130









 








                    (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 12.07(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 Initial Holder or the Trustee, as applicable, 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, as applicable, 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



131









 




 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 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;



132









 







                    (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.



133









 





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.



               Section 13.2 Notices. Any notice or communication shall be in writing and delivered in
person, sent by facsimile or email, 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

Facsimile No.: 419-325-2585

Attention: Susan Kovach, Esq.




               with copies to:


Latham & Watkins LLP

233 South Wacker Drive, Suite 5800

Chicago, IL 60606

Facsimile No.: (312) 993-9767

Attention: Christopher Lueking, Esq.




               if to the Initial Holder:


Bank of America Merrill Lynch
Merrill Lynch PCG, Inc.



One Bryant Park

3rd Floor

New York, New York 10036

Attention: Robert Voreyer

Email: bob.voreyer@baml.com




               with copies to (which shall not constitute notice):


2 World Financial Center




134









 







25th Floor

New York, NY 10281

Attn: Gerard Haugh

Facsimile No: (212) 236-2568

Email: Gerard_Haugh@ml.com



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




               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).



               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 Initial Holder or the Trustee, as applicable, to take or refrain
from taking any action under this Indenture, the Company shall furnish to the Initial Holder or the
Trustee, as applicable:



               (1) an Officers’ Certificate in form and substance reasonably satisfactory to the Initial
Holder or the Trustee, as applicable, stating that, in the opinion of the signers, all




135












 




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 Initial Holder
or the Trustee, as applicable, 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 3.17) 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 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 (other than a
Permitted Holder) 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.



136









 





               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.



               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



137









 




efforts which are consistent with accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances.








138









 








               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/ Susan A. Kovach
 	 
	 	 	Name:  	Susan A. Kovach 	 
	 	 	Title:  	VP, General Counsel & Secretary 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	LIBBEY INC.

 	 
	 	By:  	/s/ Gregory T. Geswein
 	 
	 	 	Name:  	Gregory T. Geswein 	 
	 	 	Title:  	VP, 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/ Susan A. Kovach
 	 
	 	 	Name:  	Susan A. Kovach 	 
	 	 	Title:  	VP, General Counsel & Secretary 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	MERRILL LYNCH PCG, INC.

 	 
	 	By:  	/s/
Gerard M. Haugh	 
	 	 	Name:  	Gerard M. Haugh	 
	 	 	Authorized Signatory 	 



 









 






	 	 	 	 	 



SCHEDULE 2.6




FRN INVESTOR APPROVAL LIST




American Securities




Goldman Sachs




Anchorage Capital




Caspian




Avenue Capital




Q Investments




Wellspring Capital




Front Point Capital




Quadrangle







 









 








SCHEDULE 12.6




PREMISES AND LEASED PREMISES




1. Distribution center located at 5001 Greenwood Road, Shreveport, LA;




2. Distribution center located at 7401 Fremont Pike, Perrysburg, OH; and




3. Distribution center located at 1850 Blackhawk Drive, West Chicago, IL.





 












 





EXHIBIT A




[FORM OF FACE OF CERTIFICATED NOTE]




[Applicable Private Placement Legend]



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.




	 	 	 
	No. ___

	 	Principal Amount $






LIBBEY GLASS INC.




Senior Subordinated Secured Note due 2021




               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, 2021.



          Interest Payment Dates: June 1 and December 1 commencing on the earlier to occur of (a) June
1, 2011 or (b) the first Interest Payment Date (as defined herein) following such date as the
Floating Rate Notes (as defined in the Indenture) outstanding under the Floating Rate Notes
Indenture shall be paid in full (the “FRN Redemption Date”).




          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:
	 

	 	 	 	Title:






A-2









 





[TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

[NAME OF TRUSTEE]

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.




Senior Subordinated Secured Note due 2021




     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 on
the earlier to occur of (a) June 1, 2011 (such interest accruing from December 1, 2010) or (b) the
first interest payment date (as defined below) following the FRN Redemption Date (such interest
accruing from the FRN Redemption Date (either such date, as applicable, the Initial Interest
Payment Date”) until maturity. The Company shall make each interest payment in semi-annually
in arrears on June 1 and December 1 of each year commencing on the Initial Interest Payment Date,
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 the earlier to occur
of (a) December 1, 2010 or (b) the FRN Redemption Date, interest shall accrue at a rate of 0% per
annum. Beginning on the Initial Interest Payment Date, on each Interest Payment Date, the Company
shall, at Company’s option, pay interest in cash or by issuing Additional Securities substantially
in the form of this note in a principal amount equal to the interest owning on such date until such
Interest Payment Dte as the Company elects to pay interest in cash. Thereafter, the Company shall
pay interest in cash. The maturity date of the Securities shall be the earlier of (a) June 1,
2021, and (b) a date that is 180 days after the earliest maturity of any tranche of Refinancing
Indebtedness Incurred with respect to any portion of the Floating Rate Notes; provided however,
that in no event shall the Securities mature on a date prior to September 1, 2011. 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



A-4









 





               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 paid 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 paid 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 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 October 28, 2009 (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 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



A-5









 




applicable, and delivered under the Indenture is unlimited. This Security is one of the
Senior Subordinated Secured Notes due 2021 referred to in the Indenture. The Securities include
(i) $80,431,000 aggregate principal amount of Senior Subordinated Secured Notes due 2021 issued on
the date hereof (the “Initial Securities”) and (ii) if and when issued, an unlimited
principal amount of additional Senior Subordinated Secured Notes due 2021 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, Equity Issuances, 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 XI of the Indenture on a senior subordinated
basis.



     5. Redemption



               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 100% of their
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 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



A-6









 




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 (or certain Asset Dispositions, Equity Issuances or Incurrences of
Indebtedness in accordance with Sections 3.5, 3.21 or 3.2 of the Indenture)
occur, unless the Company has exercised its right to redeem all of the Securities as described
under paragraph 5 of the Securities, then any such Change of Control (or, subject to the provisions
of Sections 3.5, 3.21 or 3.2 of the Indenture, an applicable Asset
Disposition, Equity Issuance or Incurrence of Indebtedness) 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 100% 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



A-7









 




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.




     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 Initial Holder or the Trustee, as applicable, 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



A-8









 




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
Collateral Agent in the Collateral, as provided under Section 12.7 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 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.




               Notwithstanding anything to the contrary in the foregoing, and with no further action
necessary on the part of the Company, the Parent, the Note Guarantors, the Initial Holder, any
other Holder or the Trustee, as applicable, the Indenture shall be amended or modified
automatically to incorporate any More Favorable Covenant set forth in (a) the indenture governing
the Floating Rate Notes, but only if and to the extent such indenture is amended (whether by tender
offer, consent, exchange or otherwise) after the date of the Indenture or (b) to the extent no
Floating Rate Notes remain outstanding, any indenture, loan agreement, collateral document or other
written evidence of Indebtedness (other than Indebtedness Incurred under any Credit Facility
excluding any note, bond or other form of public indebtedness) Incurred as Refinancing Indebtedness
with respect to all or any portion of the Floating Rate Notes. Upon request of the Initial Holder
or any other holder of the Securities, the Company will use its best efforts so that the amendments
contemplated by this paragraph shall be evidenced by a supplemental indenture to the Indenture.
The Company will notify the Initial Holder or the Trustee of any issuance of any new Indebtedness
that would be subject to the provision in this paragraph. Any disputes pursuant to this paragraph
shall be settled by an arbitrator at the expense of the Company.



     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



A-9









 




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 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




A-10









 







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 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.



A-11









 





     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.



               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



A-12









 





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:




A-13









 









	 	1o	 	acquired for the undersigned’s own account, without transfer; or
	 
	 	2o	 	transferred to the Company; or
	 
	 	3o	 	transferred pursuant to an effective registration statement under the Securities
Act; or
	 
	 	4o	 	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
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.





A-14












 





OPTION OF HOLDER TO ELECT PURCHASE




               If you elect to have this Security purchased by the Company pursuant to Sections 3.2,
3.5, 3.10 or 3.21 of the Indenture, check either box:



	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 ̈

3.2
	 	 ̈

3.5
	 	 ̈

3.10
	 	 ̈

3.21
	 	 






               If you want to elect to have only part of this Security purchased by the Company pursuant to
Section 3.2, Section 3.5, Section 3.10 or Section 3.21 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.





A-15









 








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
Merrill 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 Amended and Restated Indenture, dated as of October 28, 2009 (as amended,
supplemented, waived or otherwise modified, the “Indenture”), providing for the issuance of
Senior Subordinate Secured Notes due 2021 of the Company (the “Securities”);



               WHEREAS, Section 3.12 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 11.1 of the Indenture, the Initial Holder or the Trustee,
as applicable, 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, as applicable, mutually covenant and
agree for the equal and ratable benefit of the Holders of the Securities as follows:



B-1









 





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 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.



B-2









 





               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.



               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.]



B-3









 





               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:  	 	 




B-4