Exhibit 10.3



 






EXHIBIT 10.3




WAIVER AGREEMENT




     THIS WAIVER AGREEMENT (this “Agreement”), dated as of September 30,
2005,
makes reference to (i) the Credit Agreement dated as of April 2, 2004 (as amended, the
“Credit Agreement”) among VITROCRISA COMERCIAL, S. de R.L. de C.V., a
corporation (sociedad
de responsabilidad limitada de capital variable) organized and existing under the laws of
the United Mexican States, VITROCRISA, S. de R.L. de C.V., a corporation
(sociedad de responsabilidad limitada de capital variable) organized and
existing under the laws of the
United Mexican States, various financial institutions and BANK OF MONTREAL, as
administrative agent; and (ii) the Libbey and Libbey Glass Guaranty dated as of April 2, 2004
(the “Libbey Guaranty”) executed by each of LIBBEY INC., a Delaware
corporation (“Libbey”), and LIBBEY GLASS INC., a Delaware corporation (“Libbey
Glass”) (each, a “Guarantor” and together, the “Guarantors”). Unless otherwise
defined herein, terms used in this Agreement that are defined in the Credit Agreement or the Libbey
Guaranty shall have the same meanings herein
as in the Credit Agreement or the Libbey Guaranty, as applicable.



     WHEREAS, pursuant to the Libbey Guaranty, the Guarantors have guaranteed certain of
the Obligations of Vitrocrisa and/or Comercial to each of the Tranche B Lenders and the
Administrative Agent; and



     WHEREAS, the Guarantors have requested a waiver by the Tranche B Lenders and the
Administrative Agent of the requirements of Section 4.4(b) of the Libbey Guaranty; and



     WHEREAS, the parties hereto are willing to provide such waiver as specifically set forth
herein.



     NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto
hereby agree as follows:



     1. Waiver. Upon satisfaction of the conditions precedent set forth in Section 3
below,
each of the parties hereto waives any Event of Default and any rights to take
action, in each case,
arising from the failure of the Guarantors to maintain a Consolidated Leverage Ratio (as
defined
in Note Purchase Guaranty Agreement) of less than or equal to 3.75 to 1.0 at any
time from
September 30, 2005 through (but not including) December 31, 2005; provided that
the
Consolidated Leverage Ratio (as defined in Note Purchase Guaranty Agreement) of the
Guarantors shall not exceed 4.25 to 1.0 as of September 30, 2005.



     2. Limited Waiver. Except as set forth in Section 1 above, the execution of
this
Agreement and acceptance of any other documents related hereto shall not be deemed to be a
waiver of any Event of Default under the Credit Agreement, any Guarantor Event of
Default
under the Libbey Guaranty or any breach, default or event of default under any other
Transaction
Document, whether or not known to the Administrative Agent, any Collateral Agent or any
Lender and whether or not existing on the date of this Agreement.



 









 





     3. Conditions Precedent. This Agreement shall be effective upon satisfaction of the
following conditions precedent:




     (a) the Administrative Agent shall have received this Agreement, duly executed
by the Administrative Agent and the Required Lenders; and




     (b) the Guarantors shall have paid to the Administrative Agent for the account of
each Tranche B Lender that has delivered (by facsimile or otherwise) an executed
counterpart of this Agreement to the Administrative Agent on or prior to noon (Eastern
time) on September 29, 2005, a non-refundable fee in an amount equal to 5 basis
points
(0.05%) of the Tranche B Loans of such Tranche B Lender
as of the date hereof.



     4. Governing Law. This Agreement shall be construed in accordance with and be
governed by the law of the State of New York without giving effect to the principles thereof
relating to conflicts of law (except Section 5-1401 of the New York
General Obligations Law).



     5. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in a manner as to be effective and valid under applicable law, but if any
provision of
this Agreement shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity without invalidating the remainder
of
such provision or the remaining provisions of this Agreement.



     6. Captions and Headings. The captions or section headings at various
places in this
Agreement are intended for convenience only and do not constitute and shall not be interpreted
as part of this Agreement.



     7. Counterparts; Telecopied Signatures. This Agreement may be executed in any
number of separate counterparts, each of which shall collectively and separately constitute one
and the same agreement. This Agreement may be authenticated by manual signature, facsimile
or, if approved in writing by the Administrative Agent, electronic means, all of which shall be
equally valid. A facsimile copy of any such executed counterpart shall be deemed valid as an
original.



     8. No Other Changes. Except as explicitly set forth herein, all of the
terms and
conditions of the Credit Agreement and the Libbey Guaranty shall remain in full force and effect.



[Signatures Follow]




2









 








     IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly
executed and delivered as of the date first above
written.



	 	 	 	 	 
	 	 	BANK OF MONTREAL,


as Administrative Agent
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Aaron Lanski
	 

	 	 	 	 
	 

	 	Name:
	 	Aaron Lanski
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	THE BANK OF NOVA SCOTIA,

as a Tranche B Lender
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 	 	STANDARD FEDERAL BANK, N.A.,

as a Tranche B Lender
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 








 









 








     IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly
executed and delivered as of the date first above
written.



	 	 	 	 	 
	 	 	BANK OF MONTREAL, 

as Administrative Agent
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 	 	THE BANK OF NOVA SCOTIA,

as a Tranche B Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ K. C. Clark
	 

	 	 	 	 
	 

	 	Name:
	 	K. C. Clark
	 

	 	Title:
	 	Managing Director
	 
	 	 	 	 
	 	 	LASALLE BANK MIDWEST NATIONAL

ASSOCIATION (formerly known as Standard

Federal Bank, N.A.), as a Tranche B Lender
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 









 









 








     IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly
executed and delivered as of the date first above
written.



	 	 	 	 	 
	 	 	BANK OF MONTREAL, 

as Administrative Agent
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 	 	THE BANK OF NOVA SCOTIA,

as a Tranche B Lender
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 	 	LASALLE BANK MIDWEST NATIONAL

ASSOCIATION (formerly known as Standard

Federal Bank, N.A.), as a Tranche B Lender
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ronald R. Valentine
	 

	 	 	 	 
	 

	 	Name:
	 	Ronald R. Valentine
	 

	 	Title:
	 	FVP