Document:

exv4w7

 

EXHIBIT
4.7

EXECUTION
VERSION

WARRANT

THE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR INSTRUMENT) HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR PURSUANT TO AN EXEMPTION UNDER SAID ACT.

Libbey Inc.

Warrant for the Purchase of Common Stock

	 	 	 
	 

	 	Warrant to Purchase
	No. 1

	 	485,309 Shares of Common Stock

          FOR VALUE RECEIVED, Libbey Inc. (the “Company”), a Delaware corporation, hereby
certifies that MERRILL LYNCH PCG, INC., or each of its registered assigns or transferees (any such
Person, a “Holder”) is entitled, subject to the provisions of this Warrant, to purchase
from the Company, at any time or from time to time during the Exercise Period (as hereinafter
defined) an aggregate of 485,309 fully paid and nonassessable Warrant Shares (as hereinafter
defined), representing three percent (3%) of the Fully Diluted Common Stock of the Company as of
the date hereof, at an aggregate purchase price equal to the Exercise Price (as hereinafter
defined). The aggregate number of Warrant Shares (as hereinafter defined) to be received upon the
exercise of this Warrant is subject to adjustment from time to time as hereinafter set forth.

          Section 1. Definitions. Terms defined in the Unit Purchase Agreement dated as of June
16, 2006 between the Company and the Holder, unless otherwise defined herein are used herein as
therein defined. The following additional terms, as used herein, have the following respective
meanings:

 

 

          “Additional Shares” means Common Stock other than Warrant Shares

          “Appraiser” has the meaning set forth in Section 7(d)(iii).

          “Business Day” means any day, except a Saturday, Sunday or legal holiday on which banking
institutions in The City of New York are authorized or obligated by law or executive order to
close.

          “Common Stock” means the common stock of the Company, par value $0.01 per share and any shares
into which such Common Stock may thereafter be converted or changed.

          “Convertible Securities” means rights to subscribe for, or any rights or options to purchase,
Common Stock, or any shares or other securities convertible into or exchangeable for Common Stock.

          “Current Market Price” means for Common Stock the current market price of such Common Stock as
determined in accordance with Section 7(d).

          “Excluded Stock” means Common Stock issued upon exercise of any options to purchase shares of
Common Stock awarded to employees or directors of the Company pursuant to an employee stock option
plan or stock incentive plan approved by the Board of Directors and the shareholders of the
Company.

          “Exercise Period” means the period from and including the date hereof to and including 5:00
p.m. (New York City time) on December 1, 2011 (or if such day is not a Business Day, the next
succeeding Business Day).

          “Exercise Price” means, with respect to any Warrant Share, an amount equal to $11.2480 per
share for such Warrant Share.

          “Fully Diluted Common Stock” means, at any time, the then outstanding Common Stock plus
(without duplication) all Common Stock issuable, whether at such time or upon the passage of time
or the occurrence of future events, upon the exercise, conversion or exchange of all
then-outstanding rights, warrants, options, convertible securities or exchangeable securities or
indebtedness, or other rights exercisable for or convertible or exchangeable into, directly or
indirectly, Common Stock, and securities convertible or exchangeable into Common Stock, whether at
the time of issuance or upon the passage of time or the occurrence of some future event.

          “Volume Weighted Average Price” with respect to any share Common Stock on any Business Day
shall mean the volume weighted average price on the New York Stock Exchange, from 9:30 a.m. to 4:00
p.m. (New York City time) on that Business Day as displayed by Bloomberg.

          “Warrant Shares” means the Common Stock of the Company deliverable upon exercise of this
Warrant, as adjusted from time to time.

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          Section 2. Exercise of Warrant. This Warrant may be exercised in whole or in part, at
any time or from time to time, during the Exercise Period, by presentation and surrender hereof to
the Company at its principal office at the address set forth on the signature page hereof (or at
such other address as the Company may hereafter notify the Holders in writing), with the Purchase
Form annexed hereto duly executed and accompanied by proper payment of that portion of the Exercise
Price represented by the number of Warrant Shares specified in such form being exercised. Such
payment may be made, at the option of the Holders, either (a) by cash, certified or bank cashier’s
check payable to the order of the Company or wire transfer in an amount equal to the product of (i)
the Exercise Price times (ii) the number of Warrant Shares as to which this Warrant is being
exercised or (b) by receiving from the Company the number of Warrant Shares equal to (i) the number
of Warrant Shares as to which this Warrant is being exercised minus (ii) the number of Warrant
Shares having a value, based on the Current Market Price on the trading day immediately prior to
the date of such exercise, equal to the product of (x) the Exercise Price times (y) the number of
Warrant Shares as to which this Warrant is being exercised. If this Warrant should be exercised in
part only, the Company shall, upon surrender of this Warrant, execute and deliver a new Warrant
evidencing the rights of the Holder to purchase the balance of the Warrant Shares purchasable
hereunder. Upon receipt by the Company of this Warrant and such Purchase Form, together with the
applicable portion of the Exercise Price, at such office, in proper form for exercise, the Holder
shall be deemed to be the holder of record of the Warrant Shares, notwithstanding that the share
register of the Company shall then be closed or that certificates representing such Warrant Shares
shall not then be actually delivered to the Holder. The Company shall pay any and all documentary,
stamp or similar issue taxes payable in respect of the issue of the Warrant Shares provided that
the Company shall not be required to pay any taxes payable in respect of the issue or delivery of
any Warrant Shares in a name other than that of the registered Holder of the Warrant at the time of
exercise.

          Section 3. Due Authorization; Reservation of Shares. (a) The Company represents and
warrants that this Warrant has been duly authorized, executed and delivered by the Company and is a
valid and binding agreement of the Company and entitles the Holder hereof or its assignees to
purchase Warrant Shares upon payment to the Company of the Exercise Price applicable to such
shares. The Company hereby agrees that at all times there shall be reserved for issuance and
delivery by the Company, upon exercise of this Warrant, shares of Common Stock of the Company from
time to time issuable or deliverable upon exercise of this Warrant. All such shares shall be duly
authorized (and, if newly-issued, when issued upon such exercise), shall be validly issued, fully
paid and nonassessable, free and clear of all liens, security interests, charges and other
encumbrances or restrictions on sale and free and clear of all preemptive rights.

               (b) The Company represents and warrants that the execution and delivery by it of this Warrant
does not require any action by or in respect of, or filing with, any New York or Delaware
governmental body, agency or official and does not contravene or constitute a default under or
violation of (i) any provision of New York or Delaware law or regulation, (ii) the by-laws of the
Company, (iii) any material agreement to which the Company or any of its subsidiaries is a party or
(iv) any judgment,

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injunction, order, decree or other instrument binding upon the Company, except in the case of
clauses (i), (iii) and (iv) any defaults or violations that individually or in the aggregate would
not have a material adverse effect on the business of the Company and its subsidiaries taken as a
whole.

          Section 4. Fractional Shares. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. With respect to any fraction of a share
called for upon any exercise hereof, the Company shall pay to the Holder an amount in cash equal to
such fraction multiplied by the Current Market Price of one share of Common Stock.

          Section 5. Exchange, Transfer and Assignment. This Warrant is exchangeable, without
expense, at the option of the Holder, upon presentation and surrender hereof to the Company for
other Warrants of different denominations, entitling the Holder or Holders thereof to purchase in
the aggregate the same number of Warrant Shares. Subject to Section 10 hereof, the Holder of this
Warrant shall be entitled to assign or transfer its interest in this Warrant (including the
associated registration rights) in whole or in part to any person or persons. Upon surrender of
this Warrant to the Company, with the Assignment Form annexed hereto duly executed and funds
sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new
Warrant or Warrants in the name in such instrument of assignment or transfer and, if the Holder’s
entire interest is not being assigned or transferred, in the name of the Holder, and this Warrant
shall promptly be cancelled. In the event of any assignment in part, the Exercise Price shall be
apportioned between the Warrant to be issued to the Holder with respect to that portion not
assigned or transferred and the Warrant to be issued to the transferee based on their respective
interests. This Warrant may be divided or combined with other Warrants that carry the same rights
upon presentation hereof at the office of the Company, together with a written notice specifying
the names and denominations in which new Warrants are to be issued and signed by the Holder hereof.
The term “Warrant” as used herein includes any Warrants into which this Warrant may be divided or
for which it may be exchanged.

          Section 6. Rights of the Holder. The Holder shall not, by virtue hereof, be entitled
to any rights of a shareholder of the Company, either at law or equity, and the rights of the
Holder are limited to those expressed in this Warrant.

          Section 7. Anti-dilution Provisions and Other Adjustments; Purchase Right. The
Exercise Price and the number of Warrant Shares which may be purchased upon the exercise hereof
shall be subject to change or adjustment as follows:

               (a) Stock Dividends, Splits, Combinations, Subdivision, Consolidation Reclassifications,
etc. If the Company at any time (i) shall declare a dividend or make a distribution on its
Common Stock payable in shares in its share capital (whether shares of Common Stock or of shares of
any other class), (ii) shall subdivide shares of its Common Stock into a greater number of shares,
(iii) shall combine or have combined or effect a consolidation of its outstanding Common Stock into
a smaller number of shares or (iv) shall issue by reclassification of its Common Stock

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(including any such reclassification in connection with a consolidation or merger in which the
Company is the continuing company), other securities of the Company, the Holder shall be entitled
to purchase the aggregate number and kind of shares of capital stock of the Company which, if the
Warrant had been exercised immediately prior to such event, such Holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, distribution, subdivision,
combination, consolidation or reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur.

               (b) Additional Issuances. If the Company at any time shall issue any shares of Common
Stock (other than an issuance of Common Stock as a dividend or in a split or subdivision in respect
of which the adjustment provided for in Section 7(a) hereof applies), Convertible Securities, or
options to purchase or rights to subscribe for such Convertible Securities, other than Excluded
Stock, without consideration or for consideration per share (or, in the case of Convertible
Securities, with a conversion price) less than the lower of (i) the Exercise Price in effect
immediately prior to the issuance of such Common Stock, Convertible Securities or options and / or
(ii) the Current Market Price of the Common Stock immediately prior to the issuance of such Common
Stock Convertible Securities or options, then the Exercise Price shall be lowered to a price equal
to the lower of:

          (x) the consideration per share for which such Common Stock was or other securities were
issued and

          (y) the price obtained by multiplying (a) the Exercise Price in effect immediately prior to
the issuance of such Common Stock, Convertible Securities or options by (b) a fraction of which the
denominator shall be the number of shares of Fully-Diluted Common Stock outstanding immediately
after such issuance and the numerator shall be the sum of (i) the number of shares of
Fully-Diluted Common Stock outstanding immediately prior to the date of such issuance and (ii) the
number of Additional Shares of Common Stock which the aggregate consideration for the number of
shares of Common Stock so offered would purchase at the Current Market Price per share of Common
Stock.

          In the case of the issuance of Common Stock for cash in a public offering or private
placement, the consideration shall be deemed to be the amount of cash paid therefor before
deducting therefrom any discounts, commissions or placement fees payable by the Company to any
underwriter or placement agent in connection with the issuance and sale thereof. In the case of
the issuance of Common Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the Current Market Price. In the case of the
issuance of options to purchase or rights to subscribe for Common Stock (except for options to
acquire Excluded Stock) or Convertible Securities (i) the aggregate maximum number of shares of
Common Stock deliverable upon exercise of such options to purchase or rights to subscribe for
Common Stock shall be deemed to have been issued at the time such options or rights were issued and
for a consideration equal to the consideration (determined as above), if any, received by the
Company upon the issuance of such options or rights plus the minimum purchase price provided in
such options or rights for

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the Common Stock covered thereby, (ii) the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange of any Convertible Securities or upon the exercise of
options to purchase or rights to subscribe for such Convertible Securities and subsequent
conversion or exchange thereof shall be deemed to have been issued at the time such securities,
options, or rights were issued and for a consideration equal to the consideration received by the
Company for any such securities and related options or rights (excluding any cash received on
account of accrued interest or accrued dividends), plus the additional consideration, if any, to be
received by the Company upon the conversion or exchange of such securities or the exercise of any
related options or rights (the consideration in each case to be determined as above), (iii) on any
change in the number of shares or exercise price of Common Stock deliverable upon exercise of any
such options or rights or conversions of or exchanges for such securities, other than a change
resulting from the antidilution provisions thereof, the applicable Exercise Price shall be
readjusted to such Exercise Price as would have been obtained had the adjustment made upon the
issuance of such options, rights or securities not converted prior to such change or options or
rights related to such securities not converted prior to such change been made upon the basis of
such change; and (iv) no further adjustment of the Exercise Price adjusted upon the issuance of any
such options, rights, or Convertible Securities shall be made as a result of the actual issuance of
Common Stock on the exercise of any such rights or options or any conversion or exchange of any
such Convertible Securities.

               (c) Distribution of Evidences of Indebtedness or Assets. If the Company at any time
shall fix a record date for the making of a distribution or dividend to all holders of its Common
Stock (including any such distribution to be made in connection with a consolidation or merger in
which the Company is to be the continuing company) of evidences of its indebtedness or assets
(excluding dividends paid in or distributions of Company share capital for which the number of
Warrant Shares purchasable hereunder shall have been adjusted pursuant to subsection (a) of this
Section 7 or regular cash dividends or distributions payable out of earnings or surplus and made in
the ordinary course of business) the number of Warrant Shares purchasable hereunder after such
record date shall be determined by multiplying the number of Warrant Shares purchasable hereunder
immediately prior to such record date by a fraction, of which the denominator shall be the Current
Market Price per share of Common Stock on such record date, less the fair market value (as
determined in the good faith, reasonable judgment of the Board of Directors of the Company of the
portion of the assets or evidences of indebtedness to be distributed in respect of one share of
Common Stock, and the numerator shall be such Current Market Price per share of Common Stock. Such
adjustment shall become effective immediately after such record date. Such adjustment shall be
made whenever such a record date is fixed; and in the event that such distribution is not so made,
the number of Warrant Shares purchasable hereunder shall again be adjusted to be the number that
was in effect immediately prior to such record date.

               (d) Determination of Market Price. For the purpose of any computation under Section 4
or subsection (b) or (c) of this Section 7, the Current Market Price per share of Common Stock on
any record date shall be the average of the current

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market value, determined as set forth below, of Common Stock for the 20 consecutive Business
Days prior to the date in question.

          (i) If the Common Stock is listed on a U.S. national securities exchange or
admitted to unlisted trading privileges on such an exchange, the current market
value shall be the Volume Weighted Average Price of Common Stock (appropriately
adjusted to take into account the occurrence during such period of stock splits
and similar events); or

          (ii) If the Common Stock is not so listed or admitted to unlisted trading
privileges, the current market value shall be the mean of the last bid and asked
prices reported on such Business Day (A) by the National Association of Securities
Dealers, Inc. Automatic Quotation System or (B) if reports are unavailable under
clause (A) above by the National Quotation Bureau Incorporated; or

          (iii) If the Common Stock is not so listed or admitted to unlisted trading
privileges and bid and asked prices are not so reported, the current market value
shall be such value as agreed upon by the Company and the Holder or, if the
Company and the Holder cannot otherwise agree, the current market value shall be
determined by an independent nationally recognized investment banking firm
experienced in valuing businesses (an “Appraiser”) jointly chosen by the
Holder and the Company or, if the Holder and the Company cannot agree on the
selection of an Appraiser within 10 Business Days, then each of the Company and
the Holder shall choose an Appraiser within 10 Business Days of the end of such
first 10-day period, and the current market value shall be the value agreed upon
by such Appraisers or, if the two Appraisers cannot so agree, the value of a third
Appraiser, which third Appraiser shall be chosen by the two Appraisers. All
expenses of the Appraiser(s) shall be paid by the Company.

               (e) Shares Other Than Common Stock. In the event that at any time, as a result of an
adjustment made pursuant to subsection (a) of this Section 7, the Holder shall become entitled to
receive any shares in the share capital of the Company other than Common Stock, thereafter the
number of such other shares so receivable upon exercise of this Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in this Section 7, and the provisions of this
Warrant with respect to the Common Stock shall apply on like terms to any such other shares.

               (f) Notice of Certain Actions. In the event that at any time:

 (A) the Company shall authorize the distribution to all holders of its Common
Stock of evidences of its indebtedness or assets (other than dividends paid in or
distributions of the Company, share capital for which

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the number of Warrant Shares purchasable hereunder shall have been adjusted
pursuant to subsection (a) of this Section 7 or regular cash dividends or
distributions payable out of earnings or surplus and made in the ordinary course of
business); or

     (B) the Company shall authorize any capital reorganization or reclassification
of the Common Stock (other than a subdivision, consolidation or combination of the
outstanding Common Stock and other than a change in par value of the Common Stock)
or of any consolidation, amalgamation or merger to which the Company is a party, or
of the conveyance or transfer of the properties and assets of the Company
substantially as an entirety; or

     (C) there shall be a voluntary or involuntary dissolution, liquidation or
winding-up of the Company; or

     (D) the Company shall propose to take any other action that would require an
adjustment of the number of Warrant Shares purchasable hereunder pursuant to this
Section 7;

then the Company shall or shall cause to be mailed by certified mail to the Holder, at least 15
days prior to the applicable record or effective date hereinafter specified, a notice describing
such issuance, distribution, reorganization, reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation, winding-up or other action and stating (x) the date as of which
it is expected that the holders of Common Stock of record entitled to receive any such issuances or
distributions are to be determined or (y) the date on which any such consolidation, amalgamation,
merger, conveyance, transfer, dissolution, liquidation or winding-up is expected to become
effective and the date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange or convert their shares of Common Stock for securities or other property, if
any, deliverable upon such reorganization, reclassification, consolidation, merger, amalgamation,
conveyance, transfer, dissolution, liquidation or winding-up.

               (g) Deferral in Certain Circumstances. In any case in which the provisions of this
Section 7 shall require that an adjustment shall become effective immediately after a record date
of an event, the Company may defer until the occurrence of such event (i) issuing to the holder of
any Warrant exercised after such record date and before the occurrence of such event the Warrant
Shares and other shares of capital stock issuable upon such exercise by reason of the adjustment
required by such event and issuing to such holder only the shares of capital stock issuable upon
such exercise before giving effect to such adjustments, and (b) paying to such holder any amount of
cash in lieu of fractional shares of capital stock pursuant to Section 4 above; provided, however,
that the Company shall deliver to such holder an appropriate instrument or due bills evidencing
such holder’s right to receive such Additional Shares and such cash.

               (h) Other Anti-Dilution Provisions. If the Company has issued or issues any
securities containing provisions protecting the holder or holders thereof

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against dilution in any manner more favorable to such holder or holders thereof than those set
forth in this Section 7, such provisions (or any more favorable portion thereof) shall be deemed to
be incorporated herein as if fully set forth in this Warrant and, to the extent inconsistent with
any provision of this Warrant, shall be deemed to be substituted therefor.

               (i) Common Stock Defined. Whenever reference is made in this Section 7 to the issue
of shares of Common Stock, the term “Common Stock” shall include any equity securities of
any class of the Company hereinafter authorized which shall not be limited to a fixed or
determinable amount in respect of the right of the holders thereof to participate in dividends or
distributions of assets upon the voluntary or involuntary liquidation, dissolution or winding up of
the Company. However, subject to the provisions of Section 9 hereof, shares issuable upon exercise
hereof shall include only Warrant Shares as of the date hereof or shares of any class or classes
resulting from any reclassification or reclassifications thereof or as a result of any corporate
reorganization as provided for in Section 9 hereof.

          Section 8. Officers’ Certificate. Whenever the number of Warrant Shares purchasable
hereunder shall be adjusted as required by the provisions of Section 7, the Company shall forthwith
file in the custody of its Secretary or an Assistant Secretary at its principal office an officers’
certificate showing the adjusted number of Warrant Shares purchasable hereunder determined as
herein provided, setting forth in reasonable detail the facts requiring such adjustment and the
manner of computing such adjustment. Each such officers’ certificate shall be signed by the
chairman, president or chief financial officer of the Company and by the secretary or any assistant
secretary of the Company. Each such officers’ certificate shall be made available at all
reasonable times for inspection by the Holder or any holder of a Warrant executed and delivered
pursuant to Section 4 hereof and the Company shall, forthwith after each such adjustment, mail a
copy, by certified mail, of such certificate to the Holder or any such holder.

          Section 9. Reclassification, Reorganization, Consolidation or Merger. In case of any
Reorganization Transaction (as hereinafter defined), this Warrant shall become immediately
exercisable for the kind and amount of shares and other securities and property receivable upon
such Reorganization Transaction which the Holder of this Warrant would have owned immediately after
the Reorganization Transaction if such Holder had exercised this Warrant immediately prior to such
Reorganization Transaction. The foregoing provisions of this Section 9 shall similarly apply to
successive Reorganization Transactions. For purposes of this Section 9, “Reorganization
Transaction” shall mean (excluding any transaction covered by Section 7) any reclassification,
capital reorganization or other change of outstanding Common Stock of the Company (other than a
subdivision or combination of the outstanding Common Stock and other than a change in the par value
of the Common Stock) or any consolidation, amalgamation or merger of the Company with or into
another corporation (other than a merger with a subsidiary in which merger the Company is the
continuing company and that does not result in any reclassification, capital reorganization or
other change of outstanding shares of Common Stock of the class issuable upon exercise of this
Warrant)

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or any sale, lease, transfer or conveyance to another corporation of all or substantially all
of the assets of the Company.

          Section 10. Transfer Restrictions. The Holder by its acceptance hereof, represents
and warrants that it is acquiring the Warrants and any Warrant Shares for its own account and not
with a present intent to sell or distribute the Warrants or any Warrant Shares. Neither this
Warrant nor any of the Warrant Shares, nor any interest in either, may be sold, assigned, pledged,
hypothecated, encumbered or in any other manner transferred or disposed of, in whole or in part,
except in compliance with applicable United States federal and state securities laws.

          Section 11. Listing on Securities Exchanges. The Company shall use all reasonable
efforts to list on each national securities exchange or other trading venue on which any Common
Stock may at any time be listed or traded, subject to official notice of issuance upon the exercise
of this Warrant, and shall use its best efforts to maintain such listing, so long as any other
shares of its Common Stock shall be so listed or traded, all shares of Common Stock from time to
time issuable upon the exercise of this Warrant; and the Company shall use its best efforts to so
list on each national securities exchange or other trading venue, and shall use best efforts to
maintain such listing of, any other shares of capital stock of the Company issuable upon the
exercise of this Warrant if and so long as any shares of capital stock of the same class shall be
listed on such national securities exchange or other trading venue by the Company. Any such
listing shall be at the Company’s expense.

               (a) Exclusive Jurisdiction. Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this Agreement or the
transactions contemplated hereby may only be brought in any federal or state court located in the
County and State of New York, and each of the parties hereby consents to the exclusive jurisdiction
of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it
may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any
such court or that any such suit, action or proceeding which is brought in any such court has been
brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on
any party anywhere in the world, whether within or without the jurisdiction of any such court.
Without limiting the foregoing, each party agrees that service of process on such party at its
principal office shall be deemed effective service of process on such party.

          Section 12. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

          Section 13. Loss or Mutilation. Upon receipt by the Company from any Holder of
evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and an indemnity reasonably satisfactory to it (it

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being understood that the written indemnification agreement of or affidavit of loss of Merrill
Lynch PCG, Inc. or any of its affiliates shall be a sufficient indemnity) and, in case of
mutilation, upon surrender and cancellation hereof, the Company will execute and deliver in lieu
hereof a new Warrant of like tenor to such Holder; provided, however, that, in the case of
mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to
the Company for cancellation.

          Section 14. Designated Office. As long as any of the Warrants remain outstanding, the
Company shall maintain an office or agency, which shall initially be the principal executive
offices of the Company at 300 Madison Avenue, Toledo, Ohio 43604 (the “Designated Office”), where
the Warrants may be presented for exercise, registration of transfer, division or combination as
provided in this Warrant. The Company may from time to time change the Designated Office to another
office of the Company or its agent within the United States by notice given to all registered
Holders at least 10 Business Days prior to the effective date of such change.

          Section 15. Availability of Information. (a) The Company shall comply with the
reporting requirements of Sections 13 and 15(d) of the Exchange Act to the extent it is required to
do so under the Exchange Act. The Company shall also cooperate with each Holder of any Warrants
and holder of any Warrant Shares in supplying such information as may be reasonably necessary for
such holder to complete and file any information reporting forms currently or hereafter required by
the Securities and Exchange Commission as a condition to the availability of an exemption from the
Securities Act for the sale of any Warrants or Warrant Shares. The provisions of this Section 15
shall survive termination of this Warrant, whether upon exercise of this Warrant in full or
otherwise.

               (b) If at any time the Company is not subject to the requirements of Section 13 or 15(d) of
the Exchange Act, Company will promptly furnish at its expense, upon request, for the benefit of
Holders from time to time of Warrants and holders from time to time of Warrant Shares, to Holders
of Warrants, holders of Warrant Shares and prospective purchasers of Warrants and Warrant Shares
information satisfying the requirements of subsection (d)(4)(i) of Rule 144A under the Securities
Act.

          Section 16. Successors and Assigns. This Warrant and the rights evidenced hereby
shall inure to the benefit of and be binding upon the successors of the Company and the permitted
successors and assigns of the Holder hereof. The provisions of this Warrant are intended to be for
the benefit of any Holder from time to time of this Warrant and to the extent applicable, any
Holder of shares of Warrant Stock issued upon the exercise hereof (including transferees), and
shall be enforceable by any such Holder. The term “Holder” as used in this Warrant shall, where
appropriate to assign such rights to such permitted successors and assigns, be deemed to refer to
the transferee holder of such Warrant.

          Section 17. Amendment. This Warrant and all other Warrants may be modified or amended
or the provisions hereof waived with the written consent of the Company and the Holder, provided
that no such Warrant may be modified or amended to

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reduce the number of shares of Common Stock for which such Warrant is exercisable or to
increase the price at which such shares may be purchased upon exercise of such Warrant (before
giving effect to any adjustment as provided therein) without the written consent of each Holder
affected thereby.

          Section 18. Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Warrant.

          Section 19. Headings. The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.

          Section 20. Construction. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and
no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.

          Section 21. Governing Law. This Warrant and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the laws of the State of New York
without regard to principles of conflicts of laws.

12

 

          IN WITNESS WHEREOF, the Company has duly caused this Warrant to be executed by and attested by
their duly authorized officers and to be dated as of June 16,
2006.

	 	 	 	 	 	 	 
	 	 	Libbey Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Susan A. Kovach
 

	 	 
	 	 	Name: Susan A. Kovach	 	 
	 	 	Title: Vice President
and General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	Address: 300 Madison
Avenue
                  Toledo, Ohio 43604	 	 
	 

	 	 	 	        	 	 
	 	 	Attention: Susan Kovach, General Counsel
	 	 
	 	 	Facsimile No.:
419-325-2585	 	 

13

 

PURCHASE FORM

Dated ____________, ____

     The undersigned hereby irrevocably elects to exercise the within Warrant to the extent of
purchasing                      shares of Common Stock and hereby makes payment of                      in payment of the
exercise price thereof.

INSTRUCTIONS FOR REGISTRATION OF STOCK

	 	 	 	 	 	 	 
	Name
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	(please typewrite or print in block letters)	 	 
	 
	 	 	 	 	 	 
	Address
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Signature
	 	 
	 	 
	 

	 	 	 	 

	 	 

14

 

ASSIGNMENT FORM

          FOR VALUE RECEIVED,                                          hereby sells, assigns and transfers unto

	 	 	 	 	 	 	 
	Name
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	(please typewrite or print in block letters)	 	 
	 
	 	 	 	 	 	 
	Address
	 	 	 	 	 	 
	 	 	 	 	 

its right to purchase                      shares of Common Stock represented by this Warrant and does
hereby irrevocably constitute and appoint                      Attorney, to transfer the same on the books
of the Company, with full power of substitution in the premises.

Date________________, _____

Signature                                        

15exv4w8

 

EXHIBIT
4.8

EXECUTION VERSION

 

REGISTRATION RIGHTS AGREEMENT

by and between

MERRILL LYNCH PCG, INC.

and

LIBBEY INC.

 

Dated as of June 16, 2006

 

 

 

Table of Contents

	 	 	 	 	 
	1. Certain Definitions
	 	 	1	 
	 
	 	 	 	 
	2. Shelf Registration Statements
	 	 	3	 
	 
	 	 	 	 
	3. Piggyback Registrations
	 	 	3	 
	 
	 	 	 	 
	4. Other Registrations
	 	 	5	 
	 
	 	 	 	 
	5. Holdback Agreements
	 	 	5	 
	 
	 	 	 	 
	6. Procedures
	 	 	5	 
	 
	 	 	 	 
	7. Registration Expenses
	 	 	10	 
	 
	 	 	 	 
	8. Indemnification
	 	 	10	 
	 
	 	 	 	 
	9. Rule 144
	 	 	12	 
	 
	 	 	 	 
	10. Transfer of Registration Rights
	 	 	12	 
	 
	 	 	 	 
	11. Conversion or Exchange of Other Securities
	 	 	13	 
	 
	 	 	 	 
	12. Miscellaneous
	 	 	13	 

 

 

     REGISTRATION RIGHTS AGREEMENT dated as of June 16, 2006, by and between LIBBEY INC., a
Delaware corporation (the “Company”), and MERRILL LYNCH PCG, INC., a Delaware corporation (the
“Stockholder”).

     In consideration of the mutual covenants and agreements herein contained and other good and
valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to
this Agreement hereby agree as follows:

     1. Certain Definitions.

     In addition to the terms defined elsewhere in this Agreement, the following terms shall have
the following meanings:

     “Affiliate” of any Person means any other Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common control with, such
Person. The term “control” (including the terms “controlling,” “controlled by” and “under common
control with”) as used with respect to any Person means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.

     “Agreement” means this Registration Rights Agreement, including all amendments,
modifications and supplements and any exhibits or schedules to any of the foregoing, and shall
refer to this Registration Rights Agreement as the same may be in effect at the time such reference
becomes operative.

     “Blackout Period” has the meaning set forth in Section 6(e) hereof.

     “Business Day” means any day, except a Saturday, Sunday or legal holiday on which
banking institutions in The City of New York are authorized or obligated by law or executive order
to close.

     “Closing Date” has the meaning set forth in the Unit Purchase Agreement.

     “Common Stock” means common stock, par value $0.10 per share, of the Company.

     “Company” has the meaning set forth in the introductory paragraph and includes any
other person referred to in the second sentence of Section 14(c) hereof.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Governmental Entity” means any national, federal, state, municipal, local,
territorial, foreign or other government or any department, commission, board, bureau, agency,
regulatory authority or instrumentality thereof, or any court, judicial, administrative or arbitral
body or public or private tribunal.

 

 

     “NYSE” means the New York Stock Exchange, Inc.

     “Person” means any individual, sole proprietorship, partnership, limited liability
company, joint venture, trust, unincorporated organization, association, corporation, institution,
public benefit corporation, Governmental Entity or any other entity.

     “Piggyback Registration” has the meaning set forth in Section 3(a) hereof.

     “Piggyback Registration Statement” has the meaning set forth in Section 3(a) hereof.

     “Prospectus” means the prospectus or prospectuses forming a part of, or deemed to form
a part of, or included in, or deemed included in, any Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Common Stock covered by such Registration Statement and by all other amendments
and supplements to the prospectus, including post-effective amendments and all material
incorporated by reference in such prospectus or prospectuses.

     “Registrable Common Stock” means (i) all shares of Common Stock issued or issuable
upon exercise of the Warrant, (ii) any shares of Common Stock issued pursuant to the Warrant, upon
any split, distribution, recapitalization, substitution or similar event, and (iii) any other
security into or for which the Common Stock referred to in clause (i) or (ii) has been converted,
substituted or exchanged, and any security issued or issuable with respect thereto upon any stock
dividend or stock split or in connection with a combination of shares, reclassification,
recapitalization, merger, consolidation or other reorganization or otherwise.

     “Registration Expenses” has the meaning set forth in Section 7(a) hereof.

     “Registration Statement” means any registration statement of the Company that covers
any of the Registrable Common Stock pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such Registration Statement, including post-effective
amendments, all exhibits and all materials incorporated by reference in such Registration
Statement.

     “Rule 144” means Rule 144 promulgated by the SEC pursuant to the Securities Act, as
such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the SEC as a replacement thereto having substantially the same effect as such rule.

     “Rule 415” means Rule 415 promulgated by the SEC pursuant to the Securities Act, as
such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the SEC as a replacement thereto having substantially the same effect as such rule.

2

 

     “SEC” means the Securities and Exchange Commission.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Shelf Registration Statement” has the meaning set forth in Section 2(a) hereof.

     “Stockholder” has the meaning set forth in the introductory paragraph.

     “Suspension Notice” has the meaning set forth in Section 6(e) hereof.

     “underwritten registration or underwritten offering” means an offering in which
securities of the Company are sold to one or more underwriters (as defined in Section 2(a)(11) of
the Securities Act) for resale to the public.

     “Unit Purchase Agreement” means the Unit Purchase Agreement, dated June 9, 2006,
between the Company and the Stockholder.

     “Warrant” has the meaning set forth in the Unit Purchase Agreement.

     2. Shelf Registration Statements.

     (a) Right to Request Registration. At any time beginning one year after the date
hereof, at the request of the Stockholder, the Company shall use its best efforts to promptly file
a registration statement on Form S-3 or such other form under the Securities Act then available to
the Company providing for the resale pursuant to Rule 415 from time to time by the Stockholder of
such number of shares of Registrable Common Stock requested by the Stockholder to be registered
thereby (including the Prospectus, amendments and supplements to the shelf registration statement
or Prospectus, including pre- and post-effective amendments, all exhibits thereto and all material
incorporated by reference or deemed to be incorporated by reference, if any, in such shelf
registration statement, the “Shelf Registration Statement”). The Company shall use its best
efforts to cause the Shelf Registration Statement to be declared effective by the SEC as promptly
as practicable following such filing. The Company shall maintain the effectiveness of the Shelf
Registration Statement for the earlier of (a) a period of at least 18 months in the aggregate plus
the duration of any Blackout Period or (b) the first date as of which all the shares of Registrable
Common Stock included in the Shelf Registration Statement have been sold.

     3. Piggyback Registrations.

     (a) Right to Piggyback. Whenever the Company proposes to publicly sell or register
for sale any of its common equity securities pursuant to a registration statement (a “Piggyback
Registration Statement”) under the Securities Act (other than a registration statement on Form S-8
or on Form S-4 or any similar successor forms thereto), whether for its own account or for the
account of one or more securityholders of the Company (a “Piggyback Registration”), the Company
shall give prompt written notice to the Stockholder

3

 

of its intention to effect such sale or
registration and, subject to Sections 3(b) and 3(c), shall include in such transaction all
Registrable Common Stock with respect to which the Company has received a written request from the
Stockholder for inclusion therein within 15 days after the receipt of the Company’s notice. The
Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration at any
time in its sole discretion, without prejudice to the Stockholder’s right to immediately request a
Shelf Registration Statement hereunder. A Piggyback Registration shall not be considered a Shelf
Registration Statement for purposes of Section 2 of this Agreement.

     (b) Priority on Primary Registrations. If a Piggyback Registration is initiated as an
underwritten primary registration on behalf of the Company where the primary use of proceeds does
not include the repurchase, redemption, acquisition or retirement of capital stock of the Company
(a “Stock Repurchase”), and the managing underwriter advises the Company in writing that in its
opinion the number of securities requested to be included in such registration exceeds the number
that can be sold in such offering without having an adverse effect on such offering, including the
price at which such securities can be sold, then the Company shall include in such registration the
maximum number of shares that such underwriter advises can be so sold without having such effect,
allocated (i) first, to the securities the Company proposes to sell, (ii) second, to the
Registrable Common Stock requested to be included therein by the Stockholder, and (iii) third,
among other securities requested to be included in such registration by other security holders of
the Company on such basis as such holders may agree among themselves and the Company.

     (c) Priority on Secondary Registrations. If a Piggyback Registration is initiated as
an underwritten registration on behalf of a holder of the Company’s securities other than
Registrable Common Stock or on behalf of the Company where the use of proceeds includes a Stock
Repurchase, and the managing underwriter advises the Company in writing that in its opinion the
number of securities requested to be included in such registration exceeds the number that can be
sold in such offering without having an adverse effect on such offering, including the price at
which such securities can be sold, then the Company shall include in such registration the maximum
number of shares that such underwriter advises can be so sold without having such effect, allocated
(i) first, to the Registrable Common Stock requested to be included in such registration, pro rata
among the holders of such securities on the basis of the number of shares requested to be
registered by such holders and (ii) second, to other securities requested to be included in such
registration by other security holders, the Company and the Stockholder, pro rata among such
holder(s), the Company and the Stockholder on the basis of the number of shares requested to be
registered by them.

     4. Other Registrations

     The Company shall not grant to any Person the right, other than as set forth herein and except
to employees of the Company with respect to registrations on Form S-8 (or any successor forms
thereto), to request the Company to register any securities of the

4

 

Company except such rights as
are not more favorable than or inconsistent with the rights granted to the Stockholder and that do
not adversely affect the priorities set forth herein of the Stockholder.

     5. Holdback Agreements.

     Each holder of Registrable Common Stock whose Registrable Common Stock is include in a
Piggyback Registration Statement pursuant to Section 3 hereof and the Company agree not to, and the
Company shall exercise its best efforts to obtain agreements (in the underwriters’ customary form)
from its directors, executive officers and beneficial owners of 5% or more of the Company’s
outstanding voting stock not to, directly or indirectly offer, sell, pledge, contract to sell,
(including any short sale), grant any option to purchase or otherwise dispose of any equity
securities of the Company or enter into any hedging transaction relating to any equity securities
of the Company during the shorter of 180 days or such period of time advised by the underwriters,
provided that such period may not be less than 30 days, beginning on the effective date of any
underwritten Piggyback Registration Statement or the pricing date of any underwritten offering
pursuant to any Registration Statement (except as part of such underwritten offering or pursuant to
registrations on Form S-8 or S-4 or any successor forms thereto) or during the 30 day period prior
to the closing of any underwritten offering pursuant to any Registration Statement.

     6. Procedures.

     (a) In connection with the registration and sale of Registrable Common Stock pursuant to this
Agreement, the Company shall use its best efforts to effect the registration and the sale of such
Registrable Common Stock in accordance with the Stockholder’s intended methods of disposition
thereof, and pursuant thereto the Company shall as expeditiously as possible:

     (i) prepare and file with the SEC a Registration Statement with respect to
such Registrable Common Stock and use its best efforts to cause such Registration
Statement to become effective as soon as practicable thereafter; and before filing
a Registration Statement or Prospectus or any amendments or supplements thereto
(including any prospectus supplement for a shelf takedown), furnish to the
Stockholder and the underwriter or underwriters, if any, copies of all such
documents proposed to be filed, including documents incorporated by reference in
the Prospectus and, if requested by the Stockholder, the exhibits incorporated by
reference, and the Stockholder (and the underwriter(s), if any) shall have the
opportunity to review and comment thereon, and the Company will make such changes and
additions thereto as reasonably requested by the Stockholder (and the
underwriter(s), if any) prior to filing any Registration Statement or amendment
thereto or any Prospectus or any supplement thereto;

5

 

     (ii) prepare and file with the SEC such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith as may be
necessary to keep such Registration Statement effective for an aggregate of 18
months, in the case of a Shelf Registration Statement (plus, the duration of any
Blackout Period), or such shorter period as is necessary to complete the
distribution of the securities covered by such Registration Statement and comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during such period in accordance
with the intended methods of disposition by the Stockholder thereof set forth in
such Registration Statement and, in the case of the Shelf Registration Statement,
prepare such prospectus supplements containing such disclosures as may be
reasonably requested by the Stockholder or any underwriter(s) in connection with
each shelf takedown;

     (iii) furnish to the Stockholder such number of copies of such Registration
Statement, each amendment and supplement thereto, each Prospectus (including each
preliminary Prospectus and Prospectus supplement) and such other documents as the
Stockholder and any underwriter(s) may reasonably request in order to facilitate
the disposition of the Registrable Common Stock, provided, however,
that the Company shall have no such obligation to furnish copies of a final
prospectus if the conditions of Rule 172(c) under the Securities Act are satisfied
by the Company;

     (iv) use its best efforts to register or qualify such Registrable Common Stock
under such other securities or blue sky laws of such jurisdictions (domestic or
foreign) as the Stockholder and any underwriter(s) reasonably requests and do any
and all other acts and things that may be reasonably necessary or advisable to
enable the Stockholder and any underwriter(s) to consummate the disposition in such
jurisdictions of the Registrable Common Stock (provided, that the Company will not
be required to (1) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this subparagraph (iv), (2)
subject itself to taxation in any such jurisdiction or (3) consent to general
service of process in any such jurisdiction);

     (v) notify the Stockholder and any underwriter(s), at any time when a
Prospectus relating thereto is required to be delivered under the Securities Act,
of the occurrence of any event as a result of which any
Prospectus contains an untrue statement of a material fact or omits any
material fact necessary to make the statements therein not misleading, and, at the
request of the Stockholder or any underwriter(s), the Company shall prepare a
supplement or amendment to such Prospectus so that, as thereafter supplemented
and/or amended, such Prospectus shall not contain an

6

 

untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein
not misleading;

     (vi) in the case of an underwritten offering, (i) enter into such agreements
(including underwriting agreements in customary form), (ii) take all such other
actions as the Stockholder or the underwriter(s) reasonably request in order to
expedite or facilitate the disposition of such Registrable Common Stock (including,
without limitation, causing senior management and other Company personnel to
cooperate with the Stockholder and the underwriter(s) in connection with performing
due diligence) and (iii) cause its counsel to issue opinions of counsel in form,
substance and scope as are customary in primary underwritten offerings, addressed
and delivered to the underwriter(s) and the Stockholder;

     (vii) make available for inspection by the Stockholder, any underwriter
participating in any disposition pursuant to a Registration Statement, and any
attorney, accountant or other agent retained by the Stockholder or underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, and cause the Company’s officers, directors, employees and independent
accountants to supply all information reasonably requested by the Stockholder,
underwriter, attorney, accountant or agent in connection with such Registration
Statement;

     (viii) use its best efforts to cause all such Registrable Common Stock to be
listed on each securities exchange on which securities of the same class issued by
the Company are then listed or, if no such similar securities are then listed, on
the NYSE;

     (ix) provide a transfer agent and registrar for all such Registrable Common
Stock not later than the effective date of such Registration Statement;

     (x) if requested, cause to be delivered, immediately prior to the pricing of
any underwritten offering, immediately prior to effectiveness of each Registration
Statement (and, in the case of an underwritten offering, at the time of closing of
the sale of Registrable Common Stock pursuant thereto), letters from the Company’s
independent registered public accountants addressed to the Stockholder and each
underwriter, if any, stating that such accountants are independent public
accountants within the meaning of the Securities Act and the applicable rules and
regulations adopted by the SEC thereunder, and otherwise in customary form and covering
such financial and accounting matters as are customarily covered by letters of the
independent registered public accountants delivered in connection with primary
underwritten public offerings;

7

 

     (xi) make generally available to its stockholders a consolidated earnings
statement (which need not be audited) for the 12 months beginning after the
effective date of a Registration Statement as soon as reasonably practicable after
the end of such period, which earnings statement shall satisfy the requirements of
an earning statement under Section 11(a) of the Securities Act; and

     (xii) promptly notify the Stockholder and the underwriter or underwriters, if
any:

(1) when the Registration Statement, any pre-effective amendment,
the Prospectus or any Prospectus supplement or post-effective
amendment to the Registration Statement has been filed and, with
respect to the Registration Statement or any post-effective
amendment, when the same has become effective;

(2) of any written request by the SEC for amendments or
supplements to the Registration Statement or any Prospectus or of
any inquiry by the SEC relating to the Registration Statement or
the Company’s status as a well-known seasoned issuer;

(3) of the notification to the Company by the SEC of its
initiation of any proceeding with respect to the issuance by the
SEC of any stop order suspending the effectiveness of the
Registration Statement; and

(4) of the receipt by the Company of any notification with respect
to the suspension of the qualification of any Registrable Common
Stock for sale under the applicable securities or blue sky laws of
any jurisdiction.

     (b) The Company represents and warrants that no Registration Statement (including any
amendments or supplements thereto and Prospectuses contained therein) shall contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein not misleading (except that the Company makes no
representation or warranty with respect to information relating to the Stockholder furnished to the
Company by or on behalf of the Stockholder specifically for use therein).

     (c) The Company shall make available to the Stockholder (i) promptly after the same is
prepared and publicly distributed, filed with the SEC, or received by the Company, one copy of each
Registration Statement and any amendment thereto, each preliminary Prospectus and Prospectus and
each amendment or supplement thereto, each

8

 

letter written by or on behalf of the Company to the SEC
or the staff of the SEC (or other governmental agency or self-regulatory body or other body having
jurisdiction, including any domestic or foreign securities exchange), and each item of
correspondence from the SEC or the staff of the SEC (or other governmental agency or
self-regulatory body or other body having jurisdiction, including any domestic or foreign
securities exchange), in each case relating to such Registration Statement or to any of the
documents incorporated by reference therein, and (ii) such number of copies of each Prospectus,
including a preliminary Prospectus, and all amendments and supplements thereto and such other
documents as the Stockholder or any underwriter may reasonably request in order to facilitate the
disposition of the Registrable Common Stock. The Company will promptly notify the Stockholder of
the effectiveness of each Registration Statement or any post-effective amendment or the filing of
any supplement or amendment to such Shelf Registration Statement or of any Prospectus supplement.
The Company will promptly respond to any and all comments received from the SEC, with a view
towards causing each Registration Statement or any amendment thereto to be declared effective by
the SEC as soon as practicable and shall file an acceleration request, if necessary, as soon as
practicable following the resolution or clearance of all SEC comments or, if applicable, following
notification by the SEC that any such Registration Statement or any amendment thereto will not be
subject to review.

     (d) The Company may require the Stockholder to furnish to the Company any other information
regarding the Stockholder and the distribution of such securities as the Company reasonably
determines, based on the advice of counsel, is required to be included in any Registration
Statement.

     (e) The Stockholder agrees that, upon notice from the Company of the happening of any event as
a result of which the Prospectus included (or deemed included) in such Registration Statement
contains an untrue statement of a material fact or omits any material fact necessary to make the
statements therein not misleading (a “Suspension Notice”), the Stockholder will forthwith
discontinue disposition of Registrable Common Stock pursuant to such Registration Statement for a
reasonable length of time not to exceed twenty (20) days until the Stockholder is advised in
writing by the Company that the use of the Prospectus may be resumed and is furnished with a
supplemented or amended Prospectus as contemplated by Section 8(a) hereof; provided,
however, that such postponement of sales of Registrable Common Stock by the Stockholder
shall not exceed sixty (60) days in the aggregate in any 12 month period. If the Company shall
give the Stockholder any Suspension Notice, the Company shall extend the period of time during
which the Company is required to maintain the applicable Registration Statements effective pursuant
to this Agreement by the number of days during the period from and including the date of the giving
of such Suspension Notice to and including the date the Stockholder either is advised by the
Company that the use of the Prospectus may be resumed or
receives the copies of the supplemented or amended Prospectus contemplated by Section 6(a) (a
“Blackout Period”). In any event, the Company shall not be entitled to deliver more than a total
of three (3) Suspension Notices in any 12 month period.

9

 

     (f) The Company shall not permit any officer, director, underwriter, broker or any other
person acting on behalf of the Company to use any free writing prospectus (as defined in Rule 405
under the Securities Act) in connection with any registration statement covering Registrable Common
Stock, without the prior written consent of the Stockholder and any underwriter.

     7. Registration Expenses.

     (a) All expenses incident to the Company’s performance of or compliance with this Agreement,
including, without limitation, all registration and filing fees (including SEC registration fees
and NASD filing fees), fees and expenses of compliance with securities or blue sky laws, listing
application fees, printing expenses, transfer agent’s and registrar’s fees, cost of distributing
Prospectuses in preliminary and final form as well as any supplements thereto, and fees and
disbursements of counsel for the Company and all accountants and other Persons retained by the
Company (all such expenses being herein called “Registration Expenses”) (but not including any
underwriting discounts or commissions or transfer taxes, if any, attributable to the sale of
Registrable Common Stock), shall be borne by the Company. In addition, the Company shall pay its
internal expenses (including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual audit or quarterly
review, the expense of any liability insurance and the expenses and fees for listing the securities
to be registered on each securities exchange on which they are to be listed.

     (b) In connection with each registration initiated hereunder (whether a Shelf Registration
Statement or a Piggyback Registration), the Company shall pay, or shall reimburse the Stockholder
for, the reasonable fees and disbursements of one law firm chosen by the Stockholder as its counsel
in connection with each Registration Statement and sale of Registrable Securities pursuant thereto;
provided, however, that such reimbursement shall not exceed $100,000.

     (c) The obligation of the Company to bear the expenses described in Section 7(a) and to pay or
reimburse the Stockholder for the expenses described in Section 7(b) shall apply irrespective of
whether a registration, once properly requested becomes effective, is withdrawn or suspended, is
converted to another form of registration and irrespective of when any of the foregoing shall occur
or whether any sales of Registrable Securities ultimately take place.

     8. Indemnification.

     (a) The Company shall indemnify, to the fullest extent permitted by law, the Stockholder and
its officers, directors, employees and Affiliates and each Person who
controls the Stockholder (within the meaning of the Securities Act) against all losses,
claims, damages, liabilities and expenses arising out of or based upon any untrue or alleged untrue
statement of material fact contained in any Registration Statement, Prospectus, preliminary
Prospectus or any “issuer free writing prospectus” (as defined in Securities

10

 

Act Rule 433) or any
amendment thereof or supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not misleading or any
violation or alleged violation by the Company of the Securities Act, the Exchange Act or applicable
“blue sky” laws, except insofar as the same are made in reliance and in conformity with
information relating to the Stockholder furnished in writing to the Company by the Stockholder
expressly for use therein. In connection with an underwritten offering, the Company shall
indemnify such underwriter(s), their officers, employees and directors and each Person who controls
such underwriter(s) (within the meaning of the Securities Act) at least to the same extent as
provided above with respect to the indemnification of the Stockholder.

     (b) In connection with any Registration Statement in which the Stockholder is participating,
the Stockholder shall furnish to the Company in writing such information as the Company reasonably
determines, based on the advice of counsel, is required to be included in any such Registration
Statement or Prospectus and, shall indemnify, to the fullest extent permitted by law, the Company,
its officers, employees, directors, Affiliates, and each Person who controls the Company (within
the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses
arising out of or based upon any untrue or alleged untrue statement of material fact contained in
the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, but only to the extent that the
same are made in reliance and in conformity with information relating to the Stockholder furnished
in writing to the Company by the Stockholder expressly for use therein.

     (c) Any Person entitled to indemnification hereunder shall (i) give prompt written notice to
the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless
in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such
defense is assumed, the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will not be unreasonably
withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a
claim shall not be obligated to pay the fees and expenses of more than one counsel (in addition to
any local counsel) for all parties indemnified by such indemnifying party with respect to such
claim, unless in the reasonable judgment of any indemnified party there may be one or more legal or
equitable defenses available to such indemnified party that are in addition to or may conflict with
those available to another indemnified party
with respect to such claim. Failure to give prompt written notice shall not release the
indemnifying party from its obligations hereunder.

     (d) The indemnification provided for under this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of the indemnified

11

 

party or any officer, director or controlling Person of such indemnified party and shall survive the transfer of
securities.

     (e) If the indemnification provided for in or pursuant to this Section 10 is due in accordance
with the terms hereof, but is held by a court to be unavailable or unenforceable in respect of any
losses, claims, damages, liabilities or expenses referred to herein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified Person as a result of such losses, claims, damages, liabilities
or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection with the statements
or omissions that result in such losses, claims, damages, liabilities or expenses as well as any
other relevant equitable considerations. The relative fault of the indemnifying party on the one
hand and of the indemnified Person on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the indemnifying party
or by the indemnified party, and by such party’s relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. In no event shall the liability
of the Stockholder be greater in amount than the amount of net proceeds received by the Stockholder
upon such sale.

     9. Rule 144.

     The Company covenants that it will file the reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder,
and it will take such further action as the Stockholder may reasonably request to make available
adequate current public information with respect to the Company meeting the current public
information requirements of Rule 144(c) under the Securities Act, to the extent required to enable
the Stockholder to sell Registrable Common Stock without registration under the Securities Act
within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by
the SEC. Upon the request of the Stockholder, the Company will deliver to the Stockholder a
written statement as to whether it has complied with such information and requirements.

     10. Transfer of Registration Rights.

          (a) The Stockholder may transfer all or any portion of its then-remaining rights under this
Agreement to any Person (each, a “transferee”). Any transfer of registration rights pursuant to
this Section 10 shall be effective upon receipt by the Company
of (x) written notice from the Stockholder stating the name and address of any transferee and
identifying the amount of Registrable Common Stock with respect to which the rights under this
Agreement are being transferred and the nature of the rights so transferred and (y) a written
agreement from the transferee to be bound by all of the terms of this Agreement. In connection
with any such transfer, the term “Stockholder” as used in

12

 

this Agreement shall, where appropriate
to assign such rights to such transferee, be deemed to refer to the transferee holder of such
Registrable Common Stock. The Stockholder and such transferees may exercise the registration
rights hereunder in such proportion (not to exceed the then-remaining rights hereunder) as they
shall agree among themselves.

          (b) After such transfer, the Stockholder shall retain its rights under this Agreement with
respect to all other Registrable Common Stock owned by the Stockholder. Upon the request of the
Stockholder, the Company shall execute a Registration Rights Agreement with such transferee or a
proposed transferee substantially similar to the applicable sections of this Agreement.

     11. Conversion or Exchange of Other Securities.

     If the Stockholder offers Registrable Common Stock by forward sale, or any options, rights,
warrants or other securities issued by it or any other person that are offered with, convertible
into or exercisable or exchangeable for any Registrable Common Stock, the Registrable Common Stock
subject to such forward sale or underlying such options, rights, warrants or other securities shall
be eligible for registration pursuant to Sections 2 and 3 of this Agreement.

     12. Miscellaneous.

     (a) Notices. All notices, requests, consents and other communications required or
permitted hereunder shall be in writing and shall be hand delivered or mailed postage prepaid by
registered or certified mail or by facsimile transmission (with immediate telephone confirmation
thereafter) and, in the case of the Stockholder, shall also be sent via e-mail,

If to the Company:

Libbey Inc.

Attn: Susan Kovach, General Counsel

300 Madison Avenue

Toledo, Ohio 43604

Facsimile No.: 419-325-2585

Email: susan.kovach@libbey.com

with a copy to (which shall not constitute notice):

Latham & Watkins LLP

Sears Tower, Suite 5800

233 South Wacker Drive

Chicago, IL 60606

13

 

Attention: Christopher Lueking

Facsimile No.: 312-993-9767

Email: Christopher.Lueking@lw.com

If to the Stockholder:

Merrill Lynch PCG, Inc.

4 World Financial Center

18th Floor

New York, NY 10080

Attn: Lawrence First

Facsimile No.: 212-449-4296

Email: Lawrence_first@ml.com

With a copy to (which shall not constitute notice):

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036-6522

Attention: Robert Copen, Esq.

Facsimile No.: (212) 735-2000

Email: rcopen@skadden.com

     If to a transferee Stockholder, to the address of such transferee Stockholder set forth in the
transfer documentation provided to the Company;

in each case with copies to (which shall not constitute notice):

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036-6522

Attention: Robert Copen, Esq.

Facsimile No.: (212) 735-2000

or at such other address as such party each may specify by written notice to the others, and each
such notice, request, consent and other communication shall for all purposes of the Agreement be
treated as being effective or having been given when delivered personally, upon one Business Day
after being deposited with a courier if delivered by courier, upon receipt of confirmation if
transmitted by facsimile or email, or, if sent by mail, at the earlier of its receipt or 72 hours
after the same has been deposited in a regularly maintained receptacle for the
deposit of United States mail, addressed and postage prepaid as
aforesaid.

     (b) No Waivers. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or partial

14

 

exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.

     (c) Successors and Assigns. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns. If the
outstanding Common Stock is converted into or exchanged or substituted for other securities issued
by any other Person, as a condition to the effectiveness of the merger, consolidation,
reclassification, share exchange or other transaction pursuant to which such conversion, exchange,
substitution or other transaction takes place, such other Person shall automatically become bound
hereby with respect to such other securities constituting Registrable Securities and, if requested
by the Stockholder or a permitted transferee, shall further evidence such obligation by executing
and delivering to the Stockholder and such transferee a written agreement to such effect in form
and substance satisfactory to the Stockholder.

     (d) Governing Law. The internal laws, and not the laws of conflicts (other than
Section 5-1401 of the General Obligations Law of the State of New York), of New York shall govern
the enforceability and validity of this Agreement, the construction of its terms and the
interpretation of the rights and duties of the parties.

     (e) Exclusive Jurisdiction. Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this Agreement or the
transactions contemplated hereby may only be brought in any federal or state court located in the
County and State of New York, and each of the parties hereby consents to the exclusive jurisdiction
of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it
may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any
such court or that any such suit, action or proceeding which is brought in any such court has been
brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on
any party anywhere in the world, whether within or without the jurisdiction of any such court.
Without limiting the foregoing, each party agrees that service of process on such party as provided
in Section 12(a) shall be deemed effective service of process on such party.

     (f) Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     (g) Counterparts; Effectiveness. This Agreement may be executed in any number of
counterparts (including by facsimile) and by different parties hereto in separate counterparts,
with the same effect as if all parties had signed the same document. All such counterparts shall
be deemed an original, shall be construed together and shall constitute one and the same
instrument. This Agreement shall become effective when each

15

 

party hereto shall have received counterparts hereof signed by all of the other parties hereto.

     (h) Entire Agreement. This Agreement contains the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes and replaces all other
prior agreements, written or oral, among the parties hereto with respect to the subject matter
hereof.

     (i) Captions. The headings and other captions in this Agreement are for convenience
and reference only and shall not be used in interpreting, construing or enforcing any provision of
this Agreement.

     (j) Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated so
long as the economic or legal substance of the transactions contemplated hereby is not affected in
any manner materially adverse to any party. Upon such a determination, the parties shall negotiate
in good faith to modify this Agreement so as to affect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.

     (k) Amendments. The provisions of this Agreement, including the provisions of this
sentence, may not be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given, without the written consent of the Company and
the Stockholder.

     (l) Aggregation of Stock. All Registrable Common Stock held by or acquired by any
Affiliated Persons will be aggregated together for the purpose of determining the availability of
any rights under this Agreement.

     (m) Equitable Relief. The parties hereto agree that legal remedies may be inadequate
to enforce the provisions of this Agreement and that equitable relief, including specific
performance and injunctive relief, may be used to enforce the provisions of this Agreement.

[Execution Page Follows]

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     IN WITNESS WHEREOF, this Registration rights Agreement has been duly executed by each of the
parties hereto as of the date first written above.

LIBBEY INC.

	 	 	 	 	 
	By:

	 	     /s/ Susan A. Kovach	 	 
	 

	 	 

Name: Susan A. Kovach
	 	 
	 

	 	Title: Vice President and General Counsel	 	 
	 
	 	 	 	 
	MERRILL LYNCH PCG, INC.	 	 
	 
	 	 	 	 
	By:

	 	     /s/ Neven Viducis	 	 
	 

	 	 	 	 
	 

	 	Name: Neven Viducis	 	 
	 

	 	Authorized Signatory	 	 

17

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