Document:

<PAGE>

                                                                    Exhibit 10.2
================================================================================

                                LIBBEY GLASS INC.

       $25,000,000 3.69% Senior Notes, Series 2003A-1, due March 31, 2008
       $55,000,000 5.08% Senior Notes, Series 2003A-2, due March 31, 2013
                                       and
    $20,000,000 Floating Rate Senior Notes, Series 2003B, due March 31, 2010

                             ----------------------

                             NOTE PURCHASE AGREEMENT

                             -----------------------

                           Dated as of March 31, 2003

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
SECTION                                                               HEADING                                           PAGE
<S>                        <C>                                                                                          <C>
SECTION 1.                 AUTHORIZATION OF NOTES................................................................         1

       Section 1.1.        Description of Notes..................................................................         1
       Section 1.2         Series B Interest Rate................................................................         1

SECTION 2.                 NOTES; GUARANTY AGREEMENTS............................................................         2

       Section 2.1.        Sale and Purchase of Notes............................................................         2
       Section 2.2.        Guaranty Agreements...................................................................         2

SECTION 3.                 CLOSING...............................................................................         2

SECTION 4.                 CONDITIONS TO CLOSING.................................................................         3

       Section 4.1.        Representations and Warranties of the Company.........................................         3
       Section 4.2.        Representations and Warranties of the Guarantors......................................         3
       Section 4.3.        Performance; No Default...............................................................         3
       Section 4.4.        Compliance Certificates...............................................................         3
       Section 4.5.        Opinions of Counsel...................................................................         4
       Section 4.6.        Purchase Permitted by Applicable Law, etc.............................................         4
       Section 4.7.        Parent Guaranty Agreement.............................................................         4
       Section 4.8.        Subsidiary Guaranty Agreement.........................................................         5
       Section 4.9.        Related Transactions..................................................................         5
       Section 4.10.       Payment of Special Counsel Fees.......................................................         5
       Section 4.11.       Private Placement Number..............................................................         5
       Section 4.12.       Changes in Corporate Structure........................................................         5
       Section 4.13.       Proceedings and Documents.............................................................         5

SECTION 5.                 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................         6

       Section 5.1.        Organization; Power and Authority.....................................................         6
       Section 5.2.        Authorization, etc....................................................................         6
       Section 5.3.        Compliance with Laws, Other Instruments, etc..........................................         6
       Section 5.4.        Governmental Authorizations, etc......................................................         6
       Section 5.5.        Litigation; Observance of Statutes and Orders.........................................         6
       Section 5.6         Compliance with ERISA.................................................................         7
       Section 5.7.        Private Offering by the Company.......................................................         7

SECTION 6.                 REPRESENTATIONS OF THE PURCHASER......................................................         8

       Section 6.1.        Purchase for Investment...............................................................         8
       Section 6.2.        Source of Funds.......................................................................         8

SECTION 7.                 INFORMATION AS TO COMPANY.............................................................         9
</TABLE>

                                       -i-

<PAGE>

<TABLE>
<S>                        <C>                                                                                           <C>
       Section 7.1.        Financial and Business Information....................................................         9

SECTION 8.                 PREPAYMENT OF THE NOTES...............................................................        10

       Section 8.1.        Required Prepayments..................................................................        10
       Section 8.2.        Optional Prepayments..................................................................        10
       Section 8.2.1.      Optional Prepayment of the Series 2003A Notes with Make-Whole Amount..................        10
       Section 8.2.2       Optional Prepayment of the Series 2003B Notes with LIBOR Breakage Amount..............        12
       Section 8.3.        Maturity; Surrender, etc..............................................................        12
       Section 8.4.        Purchase of Notes.....................................................................        13

SECTION 9.                 AFFIRMATIVE COVENANTS.................................................................        13

       Section 9.1.        Corporate Existence, etc..............................................................        13

SECTION 10.                NEGATIVE COVENANTS....................................................................        13

       Section 10.1.       Merger, Consolidation.................................................................        13

SECTION 11.                EVENTS OF DEFAULT.....................................................................        14

SECTION 12.                REMEDIES ON DEFAULT, ETC..............................................................        17

       Section 12.1.       Acceleration..........................................................................        17
       Section 12.2.       Other Remedies........................................................................        17
       Section 12.3.       Rescission............................................................................        18
       Section 12.4.       No Waivers or Election of Remedies, Expenses, etc.....................................        18

SECTION 13.                REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.........................................        18

       Section 13.1.       Registration of Notes.................................................................        18
       Section 13.2.       Transfer and Exchange of Notes........................................................        19
       Section 13.3.       Replacement of Notes..................................................................        19

SECTION 14.                PAYMENTS ON NOTES.....................................................................        20

       Section 14.1.       Place of Payment......................................................................        20
       Section 14.2.       Home Office Payment...................................................................        20

SECTION 15.                EXPENSES, ETC.........................................................................        20

       Section 15.2.       Survival..............................................................................        21

SECTION 16.                SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT..........................        21

SECTION 17.                AMENDMENT AND WAIVER..................................................................        21
</TABLE>

                                      -ii-

<PAGE>

<TABLE>
<S>                        <C>                                                                                           <C>
       Section 17.1.       Requirements..........................................................................        21
       Section 17.2.       Solicitation of Holders of Notes......................................................        21
       Section 17.3.       Binding Effect, etc...................................................................        22
       Section 17.4.       Notes Held by Company, etc............................................................        22

SECTION 18.                NOTICES...............................................................................        22

SECTION 19.                REPRODUCTION OF DOCUMENTS.............................................................        23

SECTION 20.                CONFIDENTIAL INFORMATION..............................................................        23

SECTION 21.                SUBSTITUTION OF PURCHASER.............................................................        24

SECTION 23.                MISCELLANEOUS.........................................................................        25

       Section 22.1.       Successors and Assigns................................................................        25
       Section 22.2.       Payments Due on Non-Business Days.....................................................        25
       Section 22.3.       Severability..........................................................................        25
       Section 22.4.       Construction..........................................................................        25
       Section 22.5.       Counterparts..........................................................................        25
       Section 22.6.       Governing Law.........................................................................        25

Signature........................................................................................................        26
</TABLE>

                                      -iii-

<PAGE>

SCHEDULE A      --INFORMATION RELATING TO PURCHASERS

SCHEDULE B      --DEFINED TERMS

EXHIBIT 1(a)    --Form of 3.69% Senior Notes, Series 2003A-1, due March 31,
                  2008

EXHIBIT 1(b)    --Form of 5.08% Senior Notes, Series 2003A-2, due March 31,
                  2013

EXHIBIT 1(c)    --Form of Floating Rate Senior Notes, Series 2003B, due March
                  31, 2010

EXHIBIT 2       --Form of Parent Guaranty Agreement

EXHIBIT 3       --Form of Subsidiary Guaranty Agreement

EXHIBIT 4.5(a)  --Form of Opinion of Counsel to the Company and the Parent
                  Guarantor

EXHIBIT 4.5(b)  --Form of Opinion of General Counsel of the Parent Guarantor

EXHIBIT 4.5(c)  --Form of Opinion of Special Counsel to the Purchasers

                                      -iv-

<PAGE>

                                LIBBEY GLASS INC.

       $25,000,000 3.69% Senior Notes, Series 2003A-1, due March 31, 2008
       $55,000,000 5.08% Senior Notes, Series 2003A-2, due March 31, 2013
                                       and
    $20,000,000 Floating Rate Senior Notes, Series 2003B, due March 31, 2010

                                                                     Dated as of
                                                                  March 31, 2003

TO THE PURCHASERS LISTED IN
       THE ATTACHED SCHEDULE A:

Ladies and Gentlemen:

         LIBBEY GLASS INC. (the "Company"), a wholly owned subsidiary of LIBBEY,
INC., a Delaware corporation (the "Parent Guarantor"), agrees with the
Purchasers listed in the attached Schedule A as follows:

SECTION 1.           AUTHORIZATION OF NOTES.

         Section 1.1.   Description of Notes. The Company will authorize the
issue and sale of (a) $25,000,000 3.69% Senior Notes, Series 2003A-1, due March
31, 2008 (the "Series 2003A-1 Notes"), (b) $55,000,000 5.08% Senior Notes,
Series 2003A-2, due March 31, 2013 (the "Series 2003A-2 Notes" and collectively
with the Series 2003A-1 Notes, the "Series 2003A Notes") and (c) $20,000,000
Floating Rate Senior Notes, Series 2003B, due March 31, 2010 (the "Series 2003B
Notes" and collectively with the Series 2003A Notes the "Notes"). The Series
2003A-1 Notes, the Series 2003A-2 Notes and the Series 2003B Notes shall be
substantially in the form set out in Exhibits 1(a), 1(b) and 1(c), respectively,
with such changes therefrom, if any, as may be approved by each Purchaser and
the Company. Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.

         Section 1.2    Series B Interest Rate.

         (i)      The Series 2003B Notes shall bear interest (computed on the
basis of a 360-day year and actual days elapsed) on the unpaid principal thereof
from the date of issuance at a floating rate equal to the Adjusted LIBOR Rate
from time to time, payable quarterly on the last day of March, June, September
and December, commencing on June 30, 2003, until such principal sum shall have
become due and payable (whether at maturity, upon notice of prepayment or
otherwise) (each such date being referred to herein as an "Interest Payment
Date") and interest (so computed) on any overdue principal and LIBOR Breakage
Amount, if any, and, to the extent

<PAGE>

LIBBEY GLASS INC.                                        Note Purchase Agreement

permitted by applicable law, on any overdue interest, from the due date thereof
(whether by acceleration or otherwise) at the Series B Default Rate until paid.

         (ii)     The Adjusted LIBOR Rate shall be determined by the Company,
and notice thereof shall be given to the holders of the Series 2003B Notes,
within three Business Days after the beginning of each Interest Period, together
with a copy of the relevant screen used for the determination of LIBOR, a
calculation of Adjusted LIBOR Rate for such Interest Period, the number of days
in such Interest Period, the date on which interest for such Interest Period
will be paid and the amount of interest to be paid to each holder of Series
2003B Notes on such date. In the event that the holders of more than 50% in
aggregate principal amount of the outstanding Series 2003B Notes do not concur
with such determination by the Company, within ten Business Days after receipt
by such holders of the notice delivered by the Company pursuant to the
immediately preceding sentence, such holders of the Series 2003B Notes shall
provide notice to the Company, together with a copy of the relevant screen used
for the determination of LIBOR, a calculation of Adjusted LIBOR Rate for such
Interest Period, the number of days in such Interest Period, the date on which
interest for such Interest Period will be paid and the amount of interest to be
paid to each holder of Series 2003B Notes on such date, and any such
determination made in accordance with the provisions of this Agreement, shall be
presumptively correct absent manifest error.

SECTION 2.           NOTES; GUARANTY AGREEMENTS.

         Section 2.1.   Sale and Purchase of Notes. Subject to the terms and
conditions of this Agreement, the Company will issue and sell to each Purchaser
and each Purchaser will purchase from the Company, at the Closing provided for
in Section 3, the Notes of the Series and in the principal amount specified
opposite such Purchaser's name in Schedule A at the purchase price of 100% of
the principal amount thereof. The obligations of each Purchaser hereunder are
several and not joint obligations and no Purchaser shall have any obligation or
liability to any Person for the performance or nonperformance by any other
Purchaser hereunder.

         Section 2.2.   Guaranty Agreements. The payment by the Company of all
amounts due with respect to the Notes and the performance by the Company of its
obligations under this Agreement will be unconditionally guaranteed under (i) a
Guaranty Agreement dated as of the date of this Agreement (the "Parent Guaranty
Agreement"), by Libbey, Inc., a Delaware corporation (the "Parent Guarantor"),
which shall be substantially in the form attached hereto as Exhibit 2 and (ii) a
Subsidiary Guaranty Agreement dated as of the date of this Agreement
("Subsidiary Guaranty Agreement") by certain Subsidiaries of the Company (the
"Subsidiary Guarantors") which shall be in substantially the form attached
hereto as Exhibit 3.

SECTION 3.           CLOSING.

         The sale and purchase of the Notes to be purchased by each Purchaser
shall occur at the offices of Chapman and Cutler, 111 West Monroe Street,
Chicago, Illinois 60603, at 11:00 A.M. Chicago time, at a closing (the
"Closing") on March 31, 2003 or on such other Business Day thereafter on or
prior to April 3, 2003 as may be agreed upon by the Company and the Purchasers.
At the Closing, the Company will deliver to each Purchaser the Notes to be

                                       A-2

<PAGE>

LIBBEY GLASS INC.                                        Note Purchase Agreement

purchased by such Purchaser in the form of a single Note (or such greater number
of Notes in denominations of at least $350,000 as such Purchaser may request)
dated the date of the Closing and registered in such Purchaser's name (or in the
name of such Purchaser's nominee), against delivery by such Purchaser to the
Company or its order of immediately available funds in the amount of the
purchase price therefor by wire transfer of immediately available funds to Bank
of America, Dallas, Texas (ABA Routing Number: 111-000-012) Account Number
375-216-4275. If, at the Closing, the Company shall fail to tender such Notes of
the applicable series to any Purchaser as provided above in this Section 3, or
any of the conditions specified in Section 4 shall not have been fulfilled to
any Purchaser's reasonable satisfaction, such Purchaser shall, at such
Purchaser's election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason
of such failure or such nonfulfillment.

SECTION 4.           CONDITIONS TO CLOSING.

         The obligation of each Purchaser to purchase and pay for the Notes to
be sold to such Purchaser at the Closing is subject to the fulfillment to such
Purchaser's reasonable satisfaction, prior to or at the Closing, of the
following conditions:

         Section 4.1.   Representations and Warranties of the Company. The
representations and warranties of the Company in this Agreement shall be true
and correct when made and at the time of the Closing, except to the extent that
such representations and warranties specifically relate to an earlier date, in
which case they shall be true and correct in all material respects as of such
earlier date.

         Section 4.2.   Representations and Warranties of the Guarantors. The
representations and warranties of the Guarantors in the Guaranty Agreements
shall be true and correct when made and at the time of the Closing, except to
the extent that such representations and warranties specifically relate to an
earlier date, in which case they shall be true and correct in all material
respects as of such earlier date.

         Section 4.3.   Performance; No Default. The Company shall have
performed and complied with all agreements and conditions contained in this
Agreement required to be performed or complied with by it prior to or at the
Closing, and after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by Section 5.8), no Default
or Event of Default shall have occurred and be continuing.

         Section 4.4.   Compliance Certificates.

         (a)      Officer's Certificate of Company. The Company shall have
delivered to such Purchaser an Officer's Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections 4.1, 4.3 and 4.12
have been fulfilled.

         (b)      Secretary's Certificate of Company. The Company shall have
delivered to such Purchaser a certificate certifying as to the resolutions
attached thereto and other corporate

                                       A-3

<PAGE>

LIBBEY GLASS INC.                                        Note Purchase Agreement

proceedings relating to the authorization, execution and delivery of the Notes
and this Agreement.

         (c)      Officer's Certificate of Parent Guarantor. The Parent
Guarantor shall have delivered to such Purchaser an Officer's Certificate, dated
the date of the Closing, certifying that the conditions specified in Sections
4.2 and 4.12 have been fulfilled.

         (d)      Secretary's Certificate of Parent Guarantor. The Parent
Guarantor shall have delivered to such Purchaser a certificate certifying as to
the resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Parent Guaranty Agreement.

         (e)      Secretary's Certificate of Subsidiary Guarantors. The
Subsidiary Guarantors shall have delivered to such Purchaser a certificate
certifying as to the resolutions attached thereto and other corporate
proceedings relating to the authorization, execution and delivery of the
Subsidiary Guaranty Agreement.

         Section 4.5.   Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance reasonably satisfactory to such Purchaser, dated
the date of the Closing (a) from Latham & Watkins, counsel for the Company and
the Parent Guarantor, covering the matters set forth in Exhibit 4.5(a) and
covering such other matters incident to the transactions contemplated hereby as
such Purchaser or such Purchaser's counsel may reasonably request (and the
Company and the Parent Guarantor hereby instruct its counsel to deliver such
opinion to such Purchaser), (b) from Arthur H. Smith, General Counsel of the
Parent Guarantor covering the matters set forth in Exhibit 4.5(b) and covering
such other matters incident to the transactions contemplated hereby as such
Purchaser or such Purchaser's counsel may reasonably request (and the Company
and the Parent Guarantor hereby instruct its counsel to deliver such opinion to
such Purchaser) and (c) from Chapman and Cutler, the Purchasers' special counsel
in connection with such transactions, substantially in the form set forth in
Exhibit 4.5(c) and covering such other matters incident to such transactions as
such Purchaser may reasonably request.

         Section 4.6.   Purchase Permitted by Applicable Law, etc. On the date
of the Closing each purchase of the Notes shall (i) be permitted by the laws and
regulations of each jurisdiction to which each Purchaser is subject, without
recourse to provisions (such as Section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (ii) not violate any
applicable law or regulation (including, without limitation, Regulation T, U or
X of the Board of Governors of the Federal Reserve System) and (iii) not subject
any Purchaser to any tax, penalty or liability under or pursuant to any
applicable law or regulation, which law or regulation was not in effect on the
date hereof. If requested by any Purchaser, such Purchaser shall have received
an Officer's Certificate certifying as to such matters of fact as such Purchaser
may reasonably specify to enable such Purchaser to determine whether such
purchase is so permitted.

         Section 4.7.   Parent Guaranty Agreement. The Parent Guaranty Agreement
shall have been duly authorized, executed and delivered by the Parent Guarantor
and shall constitute the

                                       A-4

<PAGE>

LIBBEY GLASS INC.                                        Note Purchase Agreement

legal, valid and binding contract and agreement of the Parent Guarantor and such
Purchaser shall have received a true, correct and complete copy thereof.

         Section 4.8.   Subsidiary Guaranty Agreement. The Subsidiary Guaranty
Agreement shall have been duly authorized, executed and delivered by each
Subsidiary Guarantor and shall constitute the legal, valid and binding contract
and agreement of each Subsidiary Guarantor and such Purchaser shall have
received a true, correct and complete copy thereof.

         Section 4.9.   Related Transactions. The Company shall have consummated
the sale of the entire principal amount of the Notes scheduled to be sold
pursuant to this Agreement; provided that if the condition set forth in this
Section 4.9 is not satisfied as a result of the failure of any Purchaser to
purchase any Notes ("defaulted Notes") that it is obligated to purchase under
this Agreement, then either the non-defaulting Purchasers or, if the principal
amount of defaulted Notes exceeds 10% of the entire principal amount of the
Notes scheduled to be sold under this Agreement, the Company, may terminate this
Agreement without liability on the part of the Company or any non-defaulting
Purchaser, except as provided in Section 15.1.

         Section 4.10.  Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the Closing
the reasonable fees, charges and disbursements of the Purchasers' special
counsel referred to in Section 4.5 to the extent reflected in a statement of
such counsel rendered to the Company at least one Business Day prior to the
Closing.

         Section 4.11.  Private Placement Number. A Private Placement Number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for each Series of the Notes.

         Section 4.12.  Changes in Corporate Structure. Neither the Parent
Guarantor nor the Company shall have changed its jurisdiction of incorporation
or been a party to any merger or consolidation nor shall have succeeded to all
or any substantial part of the liabilities of any other entity, at any time
following the date of the most recent financial statements referred to in
Section 2.3 of the Parent Guaranty Agreement.

         Section 4.13.  Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
reasonably satisfactory to such Purchaser and such Purchaser's special counsel,
and such Purchaser and such Purchaser's special counsel shall have received all
such counterpart originals or certified or other copies of such documents as
such Purchaser or such Purchaser's special counsel may reasonably request.

                                       A-5

<PAGE>

LIBBEY GLASS INC.                                        Note Purchase Agreement

SECTION 5.           REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company represents and warrants to each Purchaser that:

         Section 5.1.   Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to execute and deliver this Agreement and
the Notes and to perform the provisions hereof and thereof.

         Section 5.2.   Authorization, etc. This Agreement and the Notes have
been duly authorized by all necessary corporate action on the part of the
Company, and this Agreement constitutes, and upon execution and delivery thereof
each Note will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

         Section 5.3.   Compliance with Laws, Other Instruments, etc. The
execution, delivery and performance by the Company of this Agreement and the
Notes will not contravene, result in any breach of, or constitute a default
under, the corporate charter or by-laws of the Company. The execution, delivery
and performance by the Company of this Agreement and the Notes will not (i)
contravene, result in any breach of, or constitute a default under, or result in
the creation of any Lien in respect of any property of the Company under, any
indenture, mortgage, deed of trust, loan, purchase or credit agreement, Material
lease, or any other Material agreement or instrument to which the Company is
bound or by which the Company or any of its properties may be bound or affected,
(ii) conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator or
Governmental Authority applicable to the Company or (iii) violate any provision
of any statute or other rule or regulation of any Governmental Authority
applicable to the Company which, in any such case, would reasonably be expected
to have a Material Adverse Effect..

         Section 5.4.   Governmental Authorizations, etc. No consent, approval
or authorization of, or registration, filing or declaration with, any
Governmental Authority is required in connection with the execution, delivery or
performance by the Company of this Agreement or the Notes.

         Section 5.5. Litigation; Observance of Statutes and Orders. (a) There
are no actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any property of the
Company in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect.

                                       A-6

<PAGE>

LIBBEY GLASS INC.                                        Note Purchase Agreement

         (b)      The Company is not in default under any order, judgment,
decree or ruling of any court, arbitrator or Governmental Authority or in
violation of any applicable law, ordinance, rule or regulation (including
without limitation Environmental Laws) of any Governmental Authority, which
default or violation, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.

         Section 5.6.   Compliance with ERISA. The execution and delivery of
this Agreement will not involve any transaction that is subject to the
prohibitions of Section 406(a) of ERISA or in connection with which a tax could
be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The representation
by the Company in the first sentence of this Section 5.6 is made in reliance
upon and subject to the accuracy of each Purchaser's representation in Section
6.2 as to the sources of the funds used to pay the purchase price of the Notes
to be purchased by such Purchaser.

         Section 5.7.   Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than 24
Institutional Investors (not including the Purchasers), each of which has been
offered the Notes at a private sale for investment. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act.

         Section 5.8.   Use of Proceeds; Margin Regulations. The Company will
apply the proceeds of the sale of the Notes for general corporate purposes
(including stock buy backs and acquisitions) and to repay Debt of the Company.
No part of the proceeds from the sale of the Notes hereunder will be used,
directly or indirectly, for the purpose of buying or carrying any margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System (12 CFR 221) which will directly or indirectly secure the Notes,
or for the purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Company in a violation of Regulation X of said
Board (12 CFR 224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220). The value of the margin stock held by
the Parent Guarantor and its Subsidiaries (based upon the closing price of the
Parent Guarantor's common stock on the New York Stock Exchange as of the most
recent Business Day prior to the Closing) does not constitute more than 30% of
the value of the Consolidated Total Assets of the Parent Guarantor and its
Subsidiaries at December 31, 2002, as adjusted to give effect to (i) the
increase or decrease in the number of shares of margin stock held by the Parent
Guarantor and its Subsidiaries from December 31, 2002 through the date of the
Closing and (ii) the increase or decrease in the market value of the margin
stock held by the Parent Guarantor and its Subsidiaries on December 31, 2002 to
the extent that such margin stock is held by the Parent Guarantor and its
Subsidiaries on the date of the Closing. As used in this Section, the terms
"margin stock" and "purpose of buying or carrying" and "directly or indirectly"
shall have the meanings assigned to them in said Regulation U.

                                       A-7

<PAGE>

LIBBEY GLASS INC.                                        Note Purchase Agreement

SECTION 6.           REPRESENTATIONS OF THE PURCHASER.

         Section 6.1.   Purchase for Investment. Each Purchaser represents that
it is an institutional "accredited investor," as such term is defined in
Regulation D under the Securities Act of 1933, as amended, and is purchasing the
Notes for its own account or for one or more separate accounts maintained by it
or for the account of one or more pension or trust funds and not with a view to
the distribution thereof, provided that the disposition of such Purchaser's or
such pension or trust funds' property shall at all times be within such
Purchaser's or such pension or trust funds' control. Each Purchaser understands
that the Notes have not been registered under the Securities Act and may be
resold only if registered pursuant to the provisions of the Securities Act or if
an exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that the
Company is not required to register the Notes.

         Section 6.2.   Source of Funds. Each Purchaser represents that at least
one of the following statements is an accurate representation as to each source
of funds (a "Source") to be used by it to pay the purchase price of the Notes to
be purchased by it hereunder:

                  (a)      the Source is an "insurance company general account"
         within the meaning of Department of Labor Prohibited Transaction
         Exemption ("PTE") 95-60 (issued July 12, 1995) and there is no employee
         benefit plan, treating as a single plan all plans maintained by the
         same employer (or affiliate thereof) or employee organization, with
         respect to which the amount of the general account reserves and
         liabilities for all contracts held by or on behalf of such plan exceed
         ten percent (10%) of the total reserves and liabilities of such general
         account (exclusive of separate account liabilities) plus surplus, as
         set forth in the NAIC Annual Statement filed with such Purchaser's
         state of domicile; or

                  (b)      the Source is either (i) an insurance company pooled
         separate account, within the meaning of PTE 90-1 (issued January 29,
         1990), or (ii) a bank collective investment fund, within the meaning of
         the PTE 91-38 (issued July 12, 1991) and, except as such Purchaser has
         disclosed to the Company in writing pursuant to this paragraph (b), no
         employee benefit plan or group of plans maintained by the same employer
         or employee organization beneficially owns more than 10% of all assets
         allocated to such pooled separate account or collective investment
         fund; or

                  (c)      the Source constitutes assets of an "investment fund"
         (within the meaning of Part V of the QPAM Exemption) managed by a
         "qualified professional asset manager" or "QPAM" (within the meaning of
         Part V of the QPAM Exemption), no employee benefit plan's assets that
         are included in such investment fund, when combined with the assets of
         all other employee benefit plans established or maintained by the same
         employer or by an affiliate (within the meaning of Section V(c)(1) of
         the QPAM Exemption) of such employer or by the same employee
         organization and managed by such QPAM, exceed 20% of the total client
         assets managed by such QPAM, the conditions of Part I(c) and (g) of the
         QPAM Exemption are satisfied, neither the QPAM nor a person controlling
         or controlled by the QPAM (applying the definition of "control"

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LIBBEY GLASS INC.                                        Note Purchase Agreement

         in Section V(e) of the QPAM Exemption) owns a 5% or more interest in
         the Company and (i) the identity of such QPAM and (ii) the names of all
         employee benefit plans whose assets are included in such investment
         fund have been disclosed to the Company in writing pursuant to this
         paragraph (c); or

                  (d)      the Source constitutes assets of a "plan(s)" (within
         the meaning of Section IV of PTE 96-23 (the "INHAM Exemption")) managed
         by an "in-house asset manager" or "INHAM" (within the meaning of Part
         IV of the INHAM exemption), the conditions of Part I(a), (g) and (h) of
         the INHAM Exemption are satisfied; neither the INHAM nor a person
         controlling or controlled by the INHAM (applying the definition of
         "control" in Section IV(h) of the INHAM Exemption) owns a 5% or more
         interest in the Company and (a) the identity of such INHAM and (b) the
         name(s) of the employee benefit plan(s) whose assets constitute the
         Source have been disclosed to the Company in writing pursuant to this
         clause (d), or

                  (e)      the Source is a governmental plan; or

                  (f)      the Source is one or more employee benefit plans, or
         a separate account or trust fund comprised of one or more employee
         benefit plans, each of which has been identified to the Company in
         writing pursuant to this paragraph (e); or

                  (g)      the Source does not include assets of any employee
         benefit plan, other than a plan exempt from the coverage of ERISA.

         If any Purchaser or any subsequent transferee of the Notes indicates
that such Purchaser or such transferee is relying on any representation
contained in paragraph (b), (c) or (f) above, the Company shall deliver on the
date of Closing and on the date of any applicable transfer a certificate, which
shall either state that (i) it is neither a party in interest nor a
"disqualified person" (as defined in section 4975(e)(2) of the Code), with
respect to any plan identified pursuant to paragraphs (b) or (f) above, or (ii)
with respect to any plan, identified pursuant to paragraph (c) above, neither it
nor any "affiliate" (as defined in Section V(c) of the QPAM Exemption) has at
such time, and during the immediately preceding one year, exercised the
authority to appoint or terminate said QPAM as manager of any plan identified in
writing pursuant to paragraph (c) above or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified plan. As used in this
Section 6.2, the terms "employee benefit plan," "governmental plan," "party in
interest" and "separate account" shall have the respective meanings assigned to
such terms in section 3 of ERISA.

SECTION 7.           INFORMATION AS TO COMPANY.

         Section 7.1.   Financial and Business Information. The Company shall
deliver to each holder of Notes that is an Institutional Investor with
reasonable promptness, such data and information relating to the business,
operations, affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries or relating to the ability of the Company to perform its
obligations hereunder and under the Notes as from time to time may be reasonably
requested by any such holder of the Notes.

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LIBBEY GLASS INC.                                        Note Purchase Agreement

SECTION 8.           PREPAYMENT OF THE NOTES.

         Section 8.1.   Required Prepayments. The entire principal amount of (a)
the Series 2003A-1 Notes shall become due and payable on March 31, 2008, (b) the
Series 2003A-2 Notes shall become due and payable on March 31, 2013, and (c) the
Series 2003B Notes shall become due and payable on March 31, 2010.

         Section 8.2.   Optional Prepayments.

         Section 8.2.1. Optional Prepayment of the Series 2003A Notes with
Make-Whole Amount. (a) The Company may, at its option, upon notice as provided
below, prepay at any time all, or from time to time any part of, the Series
2003A Notes, in an aggregate principal amount of $1,000,000 or more in the case
of a partial prepayment, at 100% of the principal amount so prepaid, together
with interest accrued thereon to the date of such prepayment, plus the
Make-Whole Amount determined for the prepayment date with respect to such
principal amount. The Company will give each holder of Series 2003A Notes
written notice of each optional prepayment under this Section 8.2 not less than
15 days and not more than 60 days prior to the date fixed for such prepayment.
Each such notice shall specify such date, the aggregate principal amount of the
Series 2003A Notes to be prepaid on such date, the principal amount of each
Series 2003A Note held by such holder to be prepaid (determined in accordance
with Section 8.4), and the interest to be paid on the prepayment date with
respect to such principal amount being prepaid, and shall be accompanied by a
certificate of a Senior Financial Officer as to the estimated Make-Whole Amount
due in connection with such prepayment (calculated as if the date of such notice
were the date of the prepayment), setting forth the details of such computation.
Two Business Days prior to such prepayment, the Company shall deliver to each
holder of Series 2003A Notes a certificate of a Senior Financial Officer
specifying the calculation of such Make-Whole Amount as of the specified
prepayment date.

         (b)      In the case of each partial prepayment of the Series 2003A
Notes, the principal amount of the Series 2003A Notes to be prepaid shall be
allocated among all of the Series 2003A Notes at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal amounts
thereof.

         (c)      The term "Make-Whole Amount" means, with respect to any Series
2003A Note, an amount equal to the excess, if any, of the Discounted Value of
the Remaining Scheduled Payments with respect to the Called Principal of such
Series 2003A Note over the amount of such Called Principal, provided that the
Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:

                  "Called Principal" means, with respect to any Series 2003A
         Note, the principal of such Series 2003A Note that is to be prepaid
         pursuant to Section 8.2.1(a) or has become or is declared to be
         immediately due and payable pursuant to Section 12.1, as the context
         requires.

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LIBBEY GLASS INC.                                        Note Purchase Agreement

                  "Discounted Value" means, with respect to the Called Principal
         of any Series 2003A Note, the amount obtained by discounting all
         Remaining Scheduled Payments with respect to such Called Principal from
         their respective scheduled due dates to the Settlement Date with
         respect to such Called Principal, in accordance with accepted financial
         practice and at a discount factor (applied on the same periodic basis
         as that on which interest on the Series 2003A Notes is payable) equal
         to the Reinvestment Yield with respect to such Called Principal.

                  "Reinvestment Yield" means, with respect to the Called
         Principal of any Series 2003A Note, 0.5% plus the yield to maturity
         implied by (i) the yields reported, as of 10:00 A.M. (New York City
         time) on the second Business Day preceding the Settlement Date with
         respect to such Called Principal, on the display page on the Bloomberg
         Financial Markets Services Screen PX1 or the equivalent screen provided
         by Bloomberg Financial Markets Commodities News for actively traded
         U.S. Treasury securities having a maturity equal to the Remaining
         Average Life of such Called Principal as of such Settlement Date, or
         (ii) if such yields are not reported as of such time or the yields
         reported as of such time are not ascertainable, the Treasury Constant
         Maturity Series Yields reported, for the latest day for which such
         yields have been so reported as of the second Business Day preceding
         the Settlement Date with respect to such Called Principal, in Federal
         Reserve Statistical Release H.15 (519) (or any comparable successor
         publication) for actively traded U.S. Treasury securities having a
         constant maturity equal to the Remaining Average Life of such Called
         Principal as of such Settlement Date. Such implied yield will be
         determined, if necessary, by (a) converting U.S. Treasury bill
         quotations to bond-equivalent yields in accordance with accepted
         financial practice and (b) interpolating linearly between (1) the
         actively traded U.S. Treasury security with the maturity closest to and
         greater than the Remaining Average Life and (2) the actively traded
         U.S. Treasury security with the maturity closest to and less than the
         Remaining Average Life.

                  "Remaining Average Life" means, with respect to any Called
         Principal, the number of years obtained by dividing (i) such Called
         Principal into (ii) the sum of the products obtained by multiplying (a)
         the principal component of each Remaining Scheduled Payment with
         respect to such Called Principal by (b) the number of years that will
         elapse between the Settlement Date with respect to such Called
         Principal and the scheduled due date of such Remaining Scheduled
         Payment.

                  "Remaining Scheduled Payments" means, with respect to the
         Called Principal of any Series 2003A Note, all payments of such Called
         Principal and interest thereon that would be due after the Settlement
         Date with respect to such Called Principal if no payment of such Called
         Principal were made prior to its scheduled due date, provided that if
         such Settlement Date is not a date on which interest payments are due
         to be made under the terms of the Series 2003A Notes, then the amount
         of the next succeeding scheduled interest payment will be reduced by
         the amount of interest accrued to such Settlement Date and required to
         be paid on such Settlement Date pursuant to Section 8.2.1(a) or Section
         12.1.

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LIBBEY GLASS INC.                                        Note Purchase Agreement

                  "Settlement Date" means, with respect to the Called Principal
         of any Series 2003A Note, the date on which such Called Principal is to
         be prepaid pursuant to Section 8.2.1(a) or has become or is declared to
         be immediately due and payable pursuant to Section 12.1, as the context
         requires.

         Section 8.2.2  Optional Prepayment of the Series 2003B Notes with LIBOR
Breakage Amount. (a) Subject to the last sentence of this paragraph, the Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Series 2003B Notes, in an amount not less
than $1,000,000 in the case of a partial prepayment, at 100% of the principal
amount so prepaid, plus the LIBOR Breakage Amount (unless the date specified for
prepayment is an Interest Payment Date) and the Series B Premium Amount, if any,
determined for the prepayment date with respect to such principal amount. The
Company will give each holder of Series 2003B Notes written notice of each
optional prepayment under this Section 8.2.2 not less than 15 days and not more
than 60 days prior to the date fixed for such prepayment. Each such notice shall
specify such date, the aggregate principal amount of the Series 2003B Notes to
be prepaid on such date, the principal amount of each such Series 2003B Note
held by such holder to be prepaid (determined in accordance with Section
8.2.2(b)), and the interest to be paid on the prepayment date with respect to
such principal amount being prepaid, the Series B Premium Amount, if any, and
shall state that the LIBOR Breakage Amount will be payable if such prepayment is
not on the next scheduled Interest Payment Date and that such holder is required
to calculate such amount and submit such calculation in reasonable detail to the
Company not less than two Business Days prior to the date of prepayment.
Notwithstanding the foregoing, the Company may not prepay the Series 2003B Notes
on or prior to September 30, 2004.

                  (b)      In the case of each partial prepayment of a Series
2003B Notes, the principal amount of the Series 2003B Notes to be prepaid shall
be allocated among all of the Series 2003B Notes at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal amounts
thereof.

                  (c)      The term "LIBOR Breakage Amount" shall mean any loss,
cost or expense (other than lost profits) actually incurred by any holder of a
Series 2003B Note as a result of any payment or prepayment of any Series 2003B
Note on a day other than a regularly scheduled Interest Payment Date for such
Series 2003B Note or at the scheduled maturity (whether voluntary, mandatory,
automatic, by reason of acceleration or otherwise), and any loss or expense
arising from the liquidation or reemployment of funds obtained by it or from
fees payable to terminate the deposits from which such funds were obtained. Each
holder shall determine the LIBOR Breakage Amount with respect to the principal
amount of its Series 2003B Notes then being paid or prepaid (or required to be
paid or prepaid) by written notice to the Company setting forth such
determination in reasonable detail not less than two Business Days prior to the
date of prepayment in the case of any prepayment pursuant to Section 8.2.2(a)
and not less than one Business Day in the case of any payment required by
Section 12.1. Each such determination shall be presumptively correct absent
manifest error.

         Section 8.3.   Maturity; Surrender, etc. In the case of each prepayment
of Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and

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LIBBEY GLASS INC.                                        Note Purchase Agreement

become due and payable on the date fixed for such prepayment, together with
interest on such principal amount accrued to such date and the applicable
Make-Whole Amount, if any, and LIBOR Breakage Amount, if any, and Series B
Premium Amount, if any. From and after such date, unless the Company shall fail
to pay such principal amount when so due and payable, together with the interest
and Make-Whole Amount, if any, and LIBOR Breakage Amount, if any, and Series B
Premium Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.

         Section 8.4.   Purchase of Notes. The Company will not and will not
permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly
or indirectly, any of the outstanding Notes except (a) upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement and the
Notes or (b) pursuant to an offer to purchase made by the Company or an
Affiliate pro rata to the holders of all Notes at the time outstanding upon the
same terms and conditions. Any such offer shall provide each holder with
sufficient information to enable it to make an informed decision with respect to
such offer, and shall remain open for at least 10 Business Days. If the holders
of more than 10% of the principal amount of the Notes then outstanding accept
such offer, the Company shall promptly notify the remaining holders of such fact
and the expiration date for the acceptance by holders of Notes of such offer
shall be extended by the number of days necessary to give each such remaining
holder at least 10 Business Days from its receipt of such notice to accept such
offer. The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to
any provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.

SECTION 9.           AFFIRMATIVE COVENANTS.

         The Company covenants that so long as any of the Notes are outstanding:

         Section 9.1.   Corporate Existence, etc. Subject to transactions
permitted under Section 10.1, the Company shall at all times preserve and keep
in full force and effect its corporate existence and the Company will at all
times preserve and keep in full force and effect all rights and franchises of
the Company unless, in the good faith judgment of the Company, the termination
of or failure to preserve and keep in full force and effect such right or
franchise would not, individually or in the aggregate, have a Material Adverse
Effect.

SECTION 10.          NEGATIVE COVENANTS.

         The Company covenants that so long as any of the Notes are outstanding:

         Section 10.1.  Merger, Consolidation. The Company will not consolidate
with or merge with any other corporation or convey, transfer or lease
substantially all of its assets in a single transaction or series of
transactions to any Person; provided that:

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LIBBEY GLASS INC.                                        Note Purchase Agreement

                  (1)      a Subsidiary of the Company may consolidate with or
         merge with the Company so long as the Company shall be the surviving or
         continuing corporation; and

                  (2)      the foregoing restriction does not apply to the
         consolidation or merger of the Company with, or the conveyance,
         transfer or lease of substantially all of the assets of the Company in
         a single transaction or series of transactions to, any Person so long
         as:

                           (i)      the successor formed by such consolidation
                  or the survivor of such merger or the Person that acquires by
                  conveyance, transfer or lease substantially all of the assets
                  of the Company as an entirety, as the case may be (the
                  "Successor Corporation"), shall be a solvent corporation
                  organized and existing under the laws of the United States of
                  America, any State thereof or the District of Columbia;

                           (ii)     if the Company is not the Successor
                  Corporation, such corporation shall have executed and
                  delivered to each holder of Notes its assumption of the due
                  and punctual performance and observance of each covenant and
                  condition of this Agreement and the Notes (pursuant to such
                  agreements and instruments as shall be reasonably satisfactory
                  to the Required Holders), and the Company shall have caused to
                  be delivered to each holder of Notes (A) an opinion of
                  nationally recognized independent counsel, to the effect that
                  all agreements or instruments effecting such assumption are
                  enforceable in accordance with their terms, and (B) an
                  acknowledgment from each Guarantor that the Guaranty to which
                  such Guarantor is a party continues in full force and effect;
                  and

                           (iii)    immediately after giving effect to such
                  consolidation or merger, no Default or Event of Default shall
                  have occurred and be continuing.

SECTION 11.          EVENTS OF DEFAULT.

         An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:

                  (a)      the Company defaults in the payment of any principal
         or Make-Whole Amount, if any, or Series B Premium Amount, if any, on
         any Note when the same becomes due and payable, whether at maturity or
         at a date fixed for prepayment or by declaration or otherwise; or

                  (b)      the Company defaults in the payment of any interest
         on any Note for more than five (5) Business Days after the same becomes
         due and payable; or

                  (c)      the Company defaults in the performance of or
         compliance with any term contained in Section 10.1 or the Parent
         Guarantor defaults in the performance of or compliance with any term
         contained in Section 5.1, 5.2, 5.3, 5.4 or 5.5 of the Parent Guaranty
         Agreement; or

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LIBBEY GLASS INC.                                        Note Purchase Agreement

                  (d)      the Company defaults in the performance of or
         compliance with any term contained herein or any Guarantor defaults in
         the performance of or compliance with any term contained in any
         Guaranty Agreement executed by such Guarantor (other than those
         referred to in paragraphs (a), (b) and (c) of this Section 11) and such
         default is not remedied within thirty (30) days after the earlier of
         (i) a Senior Financial Officer obtaining actual knowledge of such
         default and (ii) the Company or the Parent Guarantor receiving written
         notice of such default from any holder of a Note (any such written
         notice to be identified as a "notice of default" and to refer
         specifically to this paragraph (d) of Section 11); or

                  (e)      any Guaranty Agreement executed by a Guarantor shall
         cease to be in full force and effect for any reason whatsoever (other
         than the release of a Subsidiary Guarantor in accordance with Section
         4.8 of the Parent Guaranty or payment in full of the Notes), including,
         without limitation, a final and nonappealable determination by any
         governmental body or court that such Guaranty Agreement is invalid,
         void or unenforceable as to one or more Guarantors, or any Guarantor
         shall contest or deny in writing the validity or enforceability of any
         provision of, or obligation under, the Guaranty Agreement to which such
         Guarantor is a party; or

                  (f)      any representation or warranty made in writing by or
         on behalf of the Company or any Guarantor or by any officer of the
         Company or a Guarantor in this Agreement or any Guaranty Agreement or
         in any writing furnished in connection with the transactions
         contemplated hereby proves to have been false or incorrect in any
         Material (as defined in the Parent Guaranty Agreement) respect on the
         date as of which made with respect to the Parent Guarantor and the
         Restricted Subsidiaries; or

                  (g)      the Company, any Guarantor or any Restricted
         Subsidiary is in default (as principal or as guarantor or other surety)
         (i) in the payment of any principal of or premium or make-whole amount
         or interest in an amount in excess of $500,000 on any Debt that is
         outstanding in an aggregate principal amount greater than $30,000,000
         beyond any period of grace provided with respect thereto, (ii) in the
         performance of or compliance with any term of any Debt that is
         outstanding in an aggregate principal amount exceeding $30,000,000 or
         any mortgage, indenture or other agreement relating thereto, or any
         other condition exists, and as a consequence of such default or
         condition such Debt has become, or has been declared (or one or more
         Persons are entitled to declare such Debt to be), due and payable
         before its stated maturity or before its regularly scheduled dates of
         payment or (iii) as a consequence of the occurrence or continuation of
         any event or condition (other than the passage of time, including the
         exercise of any right to require the repurchase of Debt that arises
         solely from the passage of time, or the right of the holder of Debt to
         convert such indebtedness into equity interests, or any purchase or
         repayment of Debt on account of the sale of assets permitted by the
         terms of the agreement pursuant to which such Debt is outstanding), (x)
         the Company, any Guarantor or any Restricted Subsidiary has become
         obligated to purchase or repay Debt before its regular maturity or
         before its regularly scheduled dates of payment in an aggregate
         outstanding principal amount in excess of $30,000,000, or (y) one or
         more Persons have

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LIBBEY GLASS INC.                                        Note Purchase Agreement

         the right to require the Company, any Guarantor or any Restricted
         Subsidiary so to purchase or repay such Debt; or

                  (h)      the Company, the Parent Guarantor or any Material
         Subsidiary (i) is generally not paying, or admits in writing its
         inability to pay, its debts as they become due, (ii) files, or consents
         by answer or otherwise to the filing against it of, a petition for
         relief or reorganization or arrangement or any other petition in
         bankruptcy, for liquidation or to take advantage of any bankruptcy,
         insolvency, reorganization, moratorium or other similar law of any
         jurisdiction, (iii) makes an assignment for the benefit of its
         creditors, (iv) consents to the appointment of a custodian, receiver,
         trustee or other officer with similar powers with respect to it or with
         respect to any substantial part of its property, (v) is adjudicated as
         insolvent or to be liquidated, or (vi) takes corporate action for the
         purpose of any of the foregoing; or

                  (i)      a court or governmental authority of competent
         jurisdiction enters an order appointing, without consent by the
         Company, the Parent Guarantor or any Material Subsidiary, a custodian,
         receiver, trustee or other officer with similar powers with respect to
         it or with respect to any substantial part of its property, or
         constituting an order for relief or approving a petition for relief or
         reorganization or any other petition in bankruptcy or for liquidation
         or to take advantage of any bankruptcy or insolvency law of any
         jurisdiction, or ordering the dissolution, winding-up or liquidation of
         the Company, the Parent Guarantor or any Material Subsidiary, or any
         such petition shall be filed against the Company, the Parent Guarantor
         or any Material Subsidiary and such petition shall not be dismissed
         within 60 days; or

                  (j)      a final judgment or judgments for the payment of
         money aggregating in excess of $20 million are rendered against one or
         more of the Company, any Guarantor and any Restricted Subsidiary and
         which judgments are not, within 60 days after entry thereof, bonded,
         discharged or stayed pending appeal, or are not discharged within 60
         days after the expiration of such stay; or

                  (k)      if (i) any Plan shall fail to satisfy the minimum
         funding standards of ERISA or the Code for any plan year or part
         thereof or a waiver of such standards or extension of any amortization
         period is sought or granted under section 412 of the Code, (ii) a
         notice of intent to terminate any Plan shall have been or is reasonably
         expected to be filed with the PBGC or the PBGC shall have instituted
         proceedings under ERISA section 4042 to terminate or appoint a trustee
         to administer any Plan or the PBGC shall have notified the Parent
         Guarantor or any ERISA Affiliate that a Plan may become a subject of
         any such proceedings, (iii) the aggregate amount of benefit liabilities
         (within the meaning of section 412 of the Code) under all Plans in the
         aggregate as of the end of any plan year, determined based on the
         actuarial value of assets and the actuarial accrued liabilities that
         are used in conjunction with determining the funding requirements for
         such Plans in the aggregate as reported in such Plans' actuarial
         reports for such plan year shall exceed the aggregate actuarial value
         of the assets of such Plans allocable to such benefit liabilities by
         more than 20% of Consolidated Total Capitalization; (iv) the Parent
         Guarantor or any ERISA Affiliate shall have incurred or is reasonably
         expected to incur

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LIBBEY GLASS INC.                                        Note Purchase Agreement

         any liability pursuant to Title I or IV of ERISA or the penalty or
         excise tax provisions of the Code relating to employee benefit plans,
         (v) the Parent Guarantor or any ERISA Affiliate withdraws from any
         Multiemployer Plan, or (vi) the Parent Guarantor or any Subsidiary
         establishes or amends any employee welfare benefit plan that provides
         post-employment welfare benefits in a manner that would increase the
         liability of the Parent Guarantor or any Subsidiary thereunder; and any
         such event or events described in clauses (i) through (vi) above,
         either individually or together with any other such event or events,
         could reasonably be expected to have a Material Adverse Effect.

         As used in Section 11(k), the terms "employee benefit plan" and
"employee welfare benefit plan" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.

SECTION 12.          REMEDIES ON DEFAULT, ETC.

         Section 12.1.  Acceleration. (a) If an Event of Default described in
paragraph (h) or (i) of Section 11 (other than an Event of Default described in
clause (i) of paragraph (h) or described in clause (vi) of paragraph (h) by
virtue of the fact that such clause encompasses clause (i) of paragraph (h)) has
occurred, all the Notes then outstanding shall automatically become immediately
due and payable.

         (b)      If any other Event of Default has occurred and is continuing,
any holder or holders of more than 50% in principal amount of the Notes at the
time outstanding may at any time at its or their option, by notice or notices to
the Company, declare all the Notes then outstanding to be immediately due and
payable.

         (c)      If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder of Notes at the time
outstanding affected by such Event of Default may at any time, at its option, by
notice or notices to the Company, declare all the Notes held by it to be
immediately due and payable.

         Upon any Note becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus (i) all accrued and unpaid interest
thereon, (ii) the Make-Whole Amount or Series B Premium Amount, as the case may
be, determined in respect of such principal amount (to the full extent permitted
by applicable law), and (iii) the LIBOR Breakage Amount, if any, shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for), and that the provision for payment
of a Make-Whole Amount or Series B Premium Amount, as the case may be, by the
Company in the event that the Notes are prepaid or are accelerated as a result
of an Event of Default, is intended to provide compensation for the deprivation
of such right under such circumstances.

         Section 12.2.  Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared

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LIBBEY GLASS INC.                                        Note Purchase Agreement

immediately due and payable under Section 12.1, the holder of any Note at the
time outstanding may proceed to protect and enforce the rights of such holder by
an action at law, suit in equity or other appropriate proceeding, whether for
the specific performance of any agreement contained herein or in any Note, or
for an injunction against a violation of any of the terms hereof or thereof, or
in aid of the exercise of any power granted hereby or thereby or by law or
otherwise.

         Section 12.3.  Rescission. At any time after any Notes have been
declared due and payable pursuant to clause (b) or (c) of Section 12.1, the
holders of not less than a majority in principal amount of the Notes then
outstanding, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue
interest on the Notes, all principal of and Make-Whole Amount, if any, and
Series B Premium Amount, if any, on any Notes that are due and payable and are
unpaid other than by reason of such declaration, and all interest on such
overdue principal and Make-Whole Amount, if any, and Series B Premium Amount, if
any, and (to the extent permitted by applicable law) any overdue interest in
respect of the Notes, at the Default Rate, (b) all Events of Default and
Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
Section 17, and (c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes. No rescission and annulment
under this Section 12.3 will extend to or affect any subsequent Event of Default
or Default or impair any right consequent thereon.

         Section 12.4.  No Waivers or Election of Remedies, Expenses, etc. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note within 10 Business Days of receipt of a
reasonably detailed written invoice therefor such further amount as shall be
sufficient to cover all reasonable costs and out-of-pocket expenses of such
holder incurred in any enforcement or collection under this Section 12,
including, without limitation, reasonable attorneys' fees, expenses and
disbursements.

SECTION 13.          REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

         Section 13.1.  Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes. In addition
to and not in limitation of any representations contained herein, each holder of
Notes acknowledges and agrees that the

                                      A-18

<PAGE>

LIBBEY GLASS INC.                                        Note Purchase Agreement

Notes have not been registered under the Securities Act and may not be
transferred except pursuant to registration or an exemption therefrom.

         Section 13.2.  Transfer and Exchange of Notes. Upon surrender of any
Note at the principal executive office of the Company for registration of
transfer or exchange (and in the case of a surrender for registration of
transfer, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered holder of such Note or its attorney duly authorized
in writing and accompanied by the address for notices of each transferee of such
Note or part thereof), the Company shall execute and deliver, at the Company's
expense (except as provided below), one or more new Notes (as requested by the
holder thereof) of the same series in exchange therefor, in an aggregate
principal amount equal to the unpaid principal amount of the surrendered Note.
Each such new Note shall be payable to such Person as such holder may request
and shall be substantially in the form of Exhibit 1. Each such new Note shall be
dated and bear interest from the date to which interest shall have been paid on
the surrendered Note or dated the date of the surrendered Note if no interest
shall have been paid thereon. The Company may require payment of a sum
sufficient to cover any stamp tax or governmental charge imposed in respect of
any such transfer of Notes. Notes shall not be transferred in denominations of
less than $500,000, provided that if necessary to enable the registration of
transfer by a holder of its entire holding of Notes, one Note may be in a
denomination of less than $500,000. Any transferee of a Note, or purchaser of a
participation therein, shall, by its acceptance of such Note be deemed to make
the representations, to the Company regarding the Note or participation pursuant
to Section 6.1 and Section 6.2, provided that such entity may (in reliance upon
information provided by the Company, which shall not be unreasonably withheld)
make a representation to the effect that the purchase by such entity of any Note
will not constitute a non-exempt prohibited transaction under section 406(a) of
ERISA.

         Section 13.3.  Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and

                  (a)      in the case of loss, theft or destruction, of
         indemnity reasonably satisfactory to it (provided that if the holder of
         such Note is, or is a nominee for, an original Purchaser or another
         holder of a Note with a minimum net worth of at least $75,000,000, such
         Person's own unsecured agreement of indemnity shall be deemed to be
         satisfactory), or

                  (b)      in the case of mutilation, upon surrender and
         cancellation thereof,

the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note of the same Series, dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or mutilated Note
or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.

                                      A-19

<PAGE>

LIBBEY GLASS INC.                                        Note Purchase Agreement

SECTION 14.          PAYMENTS ON NOTES.

         Section 14.1.  Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and Series B Premium Amount, if any, and
interest becoming due and payable on the Notes shall be made in New York, New
York at the principal office of Bank of America, N.A. in such jurisdiction. The
Company may at any time, by notice to each holder of a Note, change the place of
payment of the Notes so long as such place of payment shall be either the
principal office of the Company in such jurisdiction or the principal office of
a bank or trust company in such jurisdiction.

         Section 14.2.  Home Office Payment. So long as any Purchaser or such
Purchaser's nominee shall be the holder of any Note, and notwithstanding
anything contained in Section 14.1 or in such Note to the contrary, the Company
will pay all sums becoming due on such Note for principal, Make-Whole Amount, if
any, and Series B Premium Amount, if any, and interest by the method and at the
address specified for such purpose in Schedule A to this Agreement, or by such
other method or at such other address as such Purchaser shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, such
Purchaser shall surrender such Note for cancellation, reasonably promptly after
any such request, to the Company at its principal executive office or at the
place of payment most recently designated by the Company pursuant to Section
14.1. The Company will afford the benefits of this Section 14.2 to any
Institutional Investor that is the direct or indirect transferee of any Note
purchased by any Purchaser under this Agreement and that has made the same
agreement relating to such Note as such Purchaser has made in this Section 14.2.

SECTION 15.          EXPENSES, ETC.

         Section 15.1.  Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all reasonable costs
and expenses (including reasonable attorneys' fees of Chapman and Cutler,
special counsel for the Purchasers, incurred by each Purchaser or holder of a
Note in connection with such transactions and in connection with any amendments,
waivers or consents under or in respect of this Agreement, any Guaranty
Agreement or the Notes (whether or not such amendment, waiver or consent becomes
effective), including, without limitation: (a) the reasonable costs and
out-of-pocket expenses incurred in enforcing or defending (or determining
whether or how to enforce or defend) any rights under this Agreement, any
Guaranty Agreement or the Notes or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement, any Guaranty Agreement or the Notes, or by reason of being a holder
of any Note, and (b) the reasonable costs and out-of-pocket expenses, including
financial advisors' fees, incurred in connection with the insolvency or
bankruptcy of any Guarantor or the Company or in connection with any work-out or
restructuring of the transactions contemplated hereby and by the Notes. The
Company will pay, and will save each Purchaser and each other holder of a Note
harmless from, all claims in respect of any fees, costs or expenses, if any, of
brokers and finders (other than those retained by such Purchaser or holder).

                                      A-20

<PAGE>

LIBBEY GLASS INC.                                        Note Purchase Agreement

         Section 15.2.  Survival. The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement, any Guaranty Agreement
or the Notes, and the termination of this Agreement.

SECTION 16.          SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
                     AGREEMENT.

         All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by any Purchaser of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of such
Purchaser or any other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company or any
Guarantor pursuant to this Agreement or any Guaranty Agreement shall be deemed
representations and warranties of the Company or the Guarantors, as the case may
be, under this Agreement or the applicable Guaranty Agreement, as the case may
be. Subject to the preceding sentence, this Agreement, each Guaranty Agreement
and the Notes embody the entire agreement and understanding between each
Purchaser and the Company and the applicable Guarantor and supersede all prior
agreements and understandings relating to the subject matter hereof.

SECTION 17.          AMENDMENT AND WAIVER.

         Section 17.1.  Requirements. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the holders of Notes holding more than 50% in
aggregate principal amount of the Notes at the time outstanding, except that (a)
no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or
21 hereof, or any defined term (as it is used in any such Section), will be
effective as to any holder of Notes unless consented to by such holder of Notes
in writing, and (b) no such amendment or waiver may, without the written consent
of all of the holders of Notes at the time outstanding affected thereby, (i)
subject to the provisions of Section 12 relating to acceleration or rescission,
change the amount or time of any prepayment or payment of principal of, or
reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount, the Series B Premium Amount or LIBOR
Breakage Amount on, the Notes, (ii) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (iii) amend any of Section 8, 11(a), 11(b), 12, 17 or
20.

         Section 17.2.  Solicitation of Holders of Notes.

         (a)      Solicitation. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to

                                      A-21

<PAGE>

LIBBEY GLASS INC.                                        Note Purchase Agreement

each holder of outstanding Notes promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the requisite
holders of Notes.

         (b)      Payment. The Company will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes of any waiver or amendment of any of the terms and provisions hereof or of
the Notes unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms, ratably to each holder of Notes then
outstanding whether or not such holder consented to such waiver or amendment.

         Section 17.3.  Binding Effect, etc. Any amendment or waiver consented
to as provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.

         Section 17.4.  Notes Held by Company, etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.

SECTION 18.          NOTICES.

         All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:

                  (i)      if to a Purchaser or such Purchaser's nominee, to
         such Purchaser or such Purchaser's nominee at the address specified for
         such communications in Schedule A, or at such other address as such
         Purchaser or such Purchaser's nominee shall have specified to the
         Company in writing,

                  (ii)     if to any other holder of any Note, to such holder at
         such address as such other holder shall have specified to the Company
         in writing, or

                                      A-22

<PAGE>

LIBBEY GLASS INC.                                        Note Purchase Agreement

                  (iii)    if to the Company, to the Company at its address set
         forth at the beginning hereof to the attention of its Chief Financial
         Officer, or at such other address as the Company shall have specified
         to the holder of each Note in writing.

Notices under this Section 18 will be deemed given on the first Business Day
following the day on which such facsimile or overnight delivery was sent.

SECTION 19.          REPRODUCTION OF DOCUMENTS.

         This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by each Purchaser at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to each Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and such Purchaser
may destroy any original document so reproduced. The Company agrees and
stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Purchaser in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Company or any other holder of Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.

SECTION 20.          CONFIDENTIAL INFORMATION.

         For the purposes of this Section 20, "Confidential Information" means
information delivered to any Purchaser by or on behalf of the Parent Guarantor
or any Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement, provided that such term does not include
information that (a) was publicly known or otherwise known to such Purchaser
prior to the time of such disclosure, (b) subsequently becomes publicly known
through no act or omission by such Purchaser or any Person acting on such
Purchaser's behalf, (c) otherwise becomes known to such Purchaser other than
through disclosure by the Parent Guarantor or any Subsidiary or from a Person
who is known to such Purchaser to be bound by a confidentiality agreement with
the Parent Guarantor or any of its Subsidiaries, or is known to such Purchaser
to be under an obligation not to transmit the information to such Purchaser, or
(d) constitutes financial statements delivered to such Purchaser under Section
3.1 of the Parent Guaranty Agreement that are otherwise publicly available. Each
Purchaser will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by such Purchaser in good faith to protect
confidential information of third parties delivered to such Purchaser, provided
that such Purchaser may deliver or disclose Confidential Information to (i) such
Purchaser's directors, trustees, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by such Purchaser's Notes and to
the extent that each such Person is obligated to treat such information in a
confidential manner), (ii) such Purchaser's financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information

                                      A-23

<PAGE>

LIBBEY GLASS INC.                                        Note Purchase Agreement

substantially in accordance with the terms of this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which such Purchaser
sells or offers to sell such Note or any part thereof or any participation
therein (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 20), (v)
any Person from which such Purchaser offers to purchase any security of the
Parent Guarantor (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having jurisdiction over such
Purchaser, (vii) the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agency that requires
access to information about such Purchaser's investment portfolio, or (viii) any
other Person to which such delivery or disclosure may be necessary or
appropriate in each of the following cases: (w) to effect compliance with any
law, rule, regulation or order applicable to such Purchaser, (x) in response to
any subpoena or other legal process, (y) in connection with any litigation to
which such Purchaser is a party or (z) if an Event of Default has occurred and
is continuing, to the extent such Purchaser may reasonably determine such
delivery and disclosure to be necessary or appropriate in the enforcement or for
the protection of the rights and remedies under such Purchaser's Notes and this
Agreement. In the event that any holder receives a request to disclose all or
any part of such information under the terms of a subpoena or order issued by a
court of competent jurisdiction or by a judicial or administrative or
legislative body or committee in connection with disclosure as provided in
clause (viii) above, such holder agrees to use commercially reasonable efforts
to promptly notify the Company (to the extent permitted by applicable law and to
the extent such notice is not in contravention of any order of any court or
Governmental Authority) of the existence, terms and circumstances surrounding
such request. Each holder of a Note, by its acceptance of a Note, will be deemed
to have agreed to be bound by and to be entitled to the benefits of this Section
20 as though it were a party to this Agreement. On reasonable request by the
Parent Guarantor in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will, as a condition precedent to receiving such
information, enter into an agreement with the Parent Guarantor embodying the
provisions of this Section 20.

SECTION 21.          SUBSTITUTION OF PURCHASER.

         Each Purchaser shall have the right to substitute any one of such
Purchaser's Affiliates as the purchaser of the Notes that such Purchaser has
agreed to purchase hereunder, by written notice to the Company, which notice
shall be signed by both such Purchaser and such Purchaser's Affiliate, shall
contain such Affiliate's agreement to be bound by this Agreement and shall
contain a confirmation by such Affiliate of the accuracy with respect to it of
the representations set forth in Section 6. Upon receipt of such notice,
wherever the word "Purchaser" is used in this Agreement (other than in this
Section 21), such word shall be deemed to refer to such Affiliate in lieu of
such Purchaser. In the event that such Affiliate is so substituted as a
purchaser hereunder and such Affiliate thereafter transfers to such Purchaser
all of the Notes then held by such Affiliate, upon receipt by the Company of
notice of such transfer, wherever the word "Purchaser" is used in this Agreement
(other than in this Section 21), such word shall no longer be deemed to refer to
such Affiliate, but shall refer to such Purchaser, and such Purchaser shall have
all the rights of an original holder of the Notes under this Agreement.

                                      A-24

<PAGE>

LIBBEY GLASS INC.                                        Note Purchase Agreement

SECTION 22.          MISCELLANEOUS.

         Section 22.1.  Successors and Assigns. All covenants and other
agreements contained in this Agreement by or on behalf of any of the parties
hereto bind and inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent holder of a Note) whether so
expressed or not.

         Section 22.2.  Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount, Series B Premium Amount or interest on any Note that is
due on a date other than a Business Day shall be made on the next succeeding
Business Day without including the additional days elapsed in the computation of
the interest payable on such next succeeding Business Day.

         Section 22.3.  Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.

         Section 22.4.  Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.

         Section 22.5.  Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by fewer than all, but together signed by
all, of the parties hereto.

         Section 22.6.  Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of New York excluding choice-of-law principles of the law
of such State that would require the application of the laws of a jurisdiction
other than such State.

                                    * * * * *

                                      A-25

<PAGE>

         The execution hereof by the Purchasers shall constitute a contract
among the Company and the Purchasers for the uses and purposes hereinabove set
forth.

                                Very truly yours,

                                LIBBEY GLASS INC.

                                By:       /s/   Kenneth A. Boerger
                                   -----------------------------------------
                                   Name: Kenneth A. Boerger
                                   Title: Vice President and Treasurer

<PAGE>

Libbey Glass Inc.                                        Note Purchase Agreement

The foregoing is hereby agreed to as of the date thereof.

                                    THE CANADA LIFE ASSURANCE COMPANY

                                    By: /s/ C. Paul English
                                        Name: C. Paul English
                                        Title: U.S. Securities Vice-President

<PAGE>

Libbey Glass Inc.                                        Note Purchase Agreement

The foregoing is hereby agreed to as of the date thereof.

                                    NATIONWIDE LIFE INSURANCE COMPANY

                                    By: /s/ Joseph P. Young
                                        Name:      JOSEPH P. YOUNG
                                        Title:     CREDIT OFFICER
                                               FIXED INCOME SECURITIES

                                    NATIONWIDE LIFE AND ANNUITY INSURANCE
                                       COMPANY

                                    By: /s/ Joseph P. Young
                                        Name:      JOSEPH P. YOUNG
                                        Title:     CREDIT OFFICER
                                               FIXED INCOME SECURITIES

                                    NATIONWIDE MUTUAL FIRE INSURANCE
                                       COMPANY

                                    By: /s/ Joseph P. Young
                                        Name:      JOSEPH P. YOUNG
                                        Title:     CREDIT OFFICER
                                               FIXED INCOME SECURITIES

<PAGE>

Libbey Glass Inc.                                        Note Purchase Agreement

The foregoing is hereby agreed to as of the date thereof.

                                    THE VARIABLE ANNUITY LIFE INSURANCE
                                       COMPANY
                                    AIG LIFE INSURANCE COMPANY
                                    SUNAMERICA LIFE INSURANCE COMPANY

                                    By: AIG Global Investment Corp., investment
                                        adviser

                                        By: /s/ Lochlan O. McNew
                                            -----------------------------
                                            Lochlan O. McNew
                                            Vice President

<PAGE>

Libbey Glass Inc.                                        Note Purchase Agreement

The foregoing is hereby agreed to as of the date thereof.

                                    MONUMENTAL LIFE INSURANCE COMPANY

                                    By: /s/ Mark E. Dunn
                                        Name:  Mark E. Dunn
                                        Title: Vice President

<PAGE>

Libbey Glass Inc.                                        Note Purchase Agreement

The foregoing is hereby agreed to as of the date thereof.

                                    METROPOLITAN LIFE INSURANCE COMPANY

                                    By: /s/ Timothy Powell
                                        ------------------------------------
                                        Name:  TIMOTHY POWELL
                                        Title: DIRECTOR

                                    GENERAL AMERICAN LIFE INSURANCE COMPANY

                                    By: Metropolitan Life Insurance Company, as
                                        Investment Manager

                                    By: /s/ Timothy Powell
                                        ------------------------------------
                                        Name:  TIMOTHY POWELL
                                        Title: DIRECTOR

<PAGE>

Libbey Glass Inc.                                        Note Purchase Agreement

The foregoing is hereby agreed to as of the date thereof.

                                    MASSACHUSETTS MUTUAL LIFE INSURANCE
                                      COMPANY

                                    By: David L. Babson & Company Inc., as
                                        Investment Adviser

                                        By: /s/ Richard C. Morrison
                                            ------------------------------------
                                            Name:  Richard C. Morrison
                                            Title: Managing Director

                                    C.M. LIFE INSURANCE COMPANY

                                    By: David L. Babson & Company Inc., as
                                        Investment Sub-Adviser

                                        By: /s/ Richard C. Morrison
                                            ------------------------------------
                                            Name:  Richard C. Morrison
                                            Title: Managing Director

                                    MASSMUTUAL ASIA LIMITED

                                    By: David L. Babson & Company Inc., as
                                        Investment Adviser

                                        By: /s/ Richard C. Morrison
                                            ------------------------------------
                                            Name:  Richard C. Morrison
                                            Title: Managing Director

<PAGE>

Libbey Glass Inc.                                        Note Purchase Agreement

The foregoing is hereby agreed to as of the date thereof.

                                    ALLSTATE LIFE INSURANCE COMPANY

                                    By: /s/ W. R. Schmidt

                                    By: /s/ Jeffrey Mazer
                                        Authorized Signatories<PAGE>

                                                                    EXHIBIT 10.3

================================================================================

                                   LIBBEY INC.

       $25,000,000 3.69% Senior Notes, Series 2003A-1, due March 31, 2008
       $55,000,000 5.08% Senior Notes, Series 2003A-2, due March 31, 2013
                                       and
    $20,000,000 Floating Rate Senior Notes, Series 2003B, due March 31, 2010
                              of Libbey Glass Inc.

                          ----------------------------

                               GUARANTY AGREEMENT

                          ----------------------------

                           Dated as of March 31, 2003

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
SECTION                                                                  HEADING                                      PAGE
<S>                        <C>                                                                                        <C>
SECTION 1.                 GUARANTY OF NOTES.....................................................................       2

       Section 1.1.        Guaranty..............................................................................       2
       Section 1.2.        Guaranty of Payment and Performance...................................................       2
       Section 1.3.        Guarantor Consent.....................................................................       2
       Section 1.4.        Obligation Absolute and Unconditional.................................................       3
       Section 1.5.        Acceleration..........................................................................       6
       Section 1.6.        Preference............................................................................       6
       Section 1.7.        Marshalling...........................................................................       6
       Section 1.8.        Subrogation...........................................................................       7

SECTION 2.                 REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR.......................................       7

       Section 2.1.        Organization; Power and Authority.....................................................       7
       Section 2.2.        Authorization, Etc....................................................................       7
       Section 2.3.        Disclosure............................................................................       7
       Section 2.4.        Organization and Ownership of Shares of Subsidiaries..................................       8
       Section 2.5.        Compliance with Laws, Other Instruments, Etc..........................................       8
       Section 2.6.        Governmental Authorizations, Etc......................................................       9
       Section 2.7.        Litigation; Observance of Agreements, Statutes and Orders.............................       9
       Section 2.8.        Taxes.................................................................................       9
       Section 2.9.        Title to Property; Leases.............................................................       9
       Section 2.10.       Licenses, Permits, Etc................................................................      10
       Section 2.11.       Financial Statements..................................................................      10
       Section 2.12.       Private Offering......................................................................      10
       Section 2.13.       Use of Proceeds; Margin Regulations...................................................      10
       Section 2.14.       Existing Debt, Future Liens...........................................................      11
       Section 2.15.       Compliance with ERISA.................................................................      11
       Section 2.16.       Foreign Assets Control Regulations, Etc...............................................      12
       Section 2.17.       Status under Certain Statutes.........................................................      12
       Section 2.18.       Environmental Matters.................................................................      12

SECTION 3.                 INFORMATION AS TO GUARANTOR...........................................................      13

       Section 3.1.        Financial and Business Information....................................................      13
       Section 3.2.        Officer's Certificate.................................................................      15
       Section 3.3.        Inspection............................................................................      16

SECTION 4.                 AFFIRMATIVE COVENANTS.................................................................      16

       Section 4.1.        Compliance with Law...................................................................      16
       Section 4.2.        Insurance.............................................................................      17
       Section 4.3.        Maintenance of Properties.............................................................      17
       Section 4.4.        Payment of Taxes and Claims...........................................................      17
</TABLE>

<PAGE>

<TABLE>
<S>                        <C>                                                                                         <C>
       Section 4.5.        Corporate Existence, Etc..............................................................      17
       Section 4.6.        Designation of Subsidiaries...........................................................      17
       Section 4.7.        Ownership of Company..................................................................      18
       Section 4.8.        Guaranty by Subsidiaries..............................................................      18

SECTION 5.                 NEGATIVE COVENANTS....................................................................      19

       Section 5.1.        Limitation Ratio......................................................................      19
       Section 5.2.        Consolidated Interest Coverage Ratio..................................................      19
       Section 5.3.        Limitation on Liens...................................................................      19
       Section 5.4.        Sales of Assets.......................................................................      21
       Section 5.5.        Merger, Consolidation and Sale of Stock...............................................      22
       Section 5.6.        Transactions with Affiliates..........................................................      23
       Section 5.7.        Nature of Business....................................................................      23

SECTION 6.                 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT..........................      23

SECTION 7.                 AMENDMENT AND WAIVER..................................................................      24

       Section 7.1.        Requirements..........................................................................      24
       Section 7.2.        Solicitation of Holders of Notes......................................................      24
       Section 7.3.        Binding Effect, Etc...................................................................      24
       Section 7.4.        Notes Held by Guarantor, Etc..........................................................      25

SECTION 8.                 NOTICES...............................................................................      25

SECTION 9.                 REPRODUCTION OF DOCUMENTS.............................................................      25

SECTION 10.                CONFIDENTIAL INFORMATION..............................................................      26

SECTION 11.                SUBMISSION TO JURISDICTION............................................................      27

SECTION 12.                MISCELLANEOUS.........................................................................      27

       Section 12.1.       Successors and Assigns................................................................      27
       Section 12.2.       Severability..........................................................................      27
       Section 12.3.       Construction..........................................................................      27
       Section 12.4        Counterparts..........................................................................      28
       Section 12.5.       Governing Law.........................................................................      28

Signature........................................................................................................      29
</TABLE>

                                      -ii-

<PAGE>

SCHEDULE I         --     Names of Purchasers
EXHIBIT A          --     Defined Terms
SCHEDULE 2.3       --     Disclosure Materials
SCHEDULE 2.4       --     Organization and Ownership of Shares of Subsidiaries;
                          Affiliates
SCHEDULE 2.10      --     Licenses; Permits
SCHEDULE 2.11      --     Financial Statements
SCHEDULE 2.14      --     Existing Debt; Future Liens
SCHEDULE 2.18      --     Environmental Disclosure
SCHEDULE 5.3       --     Liens Existing as of Closing

                                      -iii-

<PAGE>

                                   LIBBEY INC.
                               300 MADISON AVENUE
                             TOLEDO, OHIO 43699-0060

       $25,000,000 3.69% Senior Notes, Series 2003A-1, due March 31, 2008
       $55,000,000 5.08% Senior Notes, Series 2003A-2, due March 31, 2013
                                       and
    $20,000,000 Floating Rate Senior Notes, Series 2003B, due March 31, 2010
                              of Libbey Glass Inc.

                                                                     Dated as of
                                                                  March 31, 2003

TO THE PURCHASERS NAMED
   ON SCHEDULE I HERETO

Ladies and Gentlemen:

         Reference is hereby made to the Note Purchase Agreement dated as of
March 31, 2003 (the "Note Purchase Agreement"), between Libbey Glass Inc., a
Delaware corporation (the "Company") and the purchasers named therein (the
"Purchasers") pursuant to which the Company shall issue $25,000,000 3.69% Senior
Notes, Series 2003A-1, due March 31, 2008 (the "Series 2003A-1 Notes"),
$55,000,000 5.08% Senior Notes, Series 2003A-2, due March 31, 2013 (the "Series
2003A-2 Notes"), and $20,000,000 Floating Rate Senior Notes, Series 2003B, due
March 31, 2010 (the "Series 2003B Notes" and collectively with the Series
2003A-1 Notes and the Series 2003A-2 Notes the "Notes"). Certain capitalized
terms used in this Agreement are defined in Exhibit A; references to a
"Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule or an
Exhibit attached to this Agreement.

         The undersigned, Libbey Inc., a Delaware corporation (the "Guarantor"),
owns 100% of the shares of capital stock of the Company. The Guarantor views the
issuance and sale by the Company of the Notes to the Purchasers as in the best
interests of the Company and the Guarantor. As an inducement to and in
consideration of the purchase by the Purchasers of the Notes, the Guarantor has
agreed to unconditionally guaranty the prompt payment of all amounts of
principal, interest, Make-Whole Amount, if any, and Series B Premium Amount, if
any, which may become due and payable from time to time with respect to the
Notes.

         In consideration of the foregoing, the undersigned does hereby covenant
and agree with the Purchasers and with each and every subsequent holder of the
Notes as follows:

<PAGE>

SECTION 1.           GUARANTY OF NOTES.

         Section 1.1.   Guaranty. The Guarantor hereby absolutely and
unconditionally guarantees to the holders from time to time of the Notes: (a)
the full and prompt payment of the principal of all of the Notes and of the
interest thereon at the rate therein stipulated and the Make-Whole Amount, if
any, and Series B Premium Amount, if any, when and as the same shall become due
and payable, whether by lapse of time, upon redemption or prepayment, by
extension or by acceleration or declaration, or otherwise, (b) the full and
prompt performance and observance by the Company of each and all of the
covenants and agreements required to be performed or observed by the Company
under the terms of the Note Purchase Agreement, and (c) payment, within 10
Business Days of receipt of a reasonably detailed invoice therefor, by any
holder of the Notes of all reasonable costs and out-of-pocket expenses, legal or
otherwise (including reasonable attorneys' fees) and such expenses, if any, as
shall have been expended or incurred in the enforcement of any right or
privilege under this Agreement, including without limitation in any consultation
or action in connection therewith to the extent such consultation or action is
made during the existence of any Event of Default, and in each and every case
irrespective of the validity, regularity, or enforcement of any of the Notes or
the Note Purchase Agreement or any of the terms thereof or of any other like
circumstance or circumstances. The guarantee of the Notes herein provided for is
a guarantee of the immediate and timely payment of the principal, Make-Whole
Amount, if any, and Series B Premium Amount, if any, and interest on the Notes
and any other amounts payable by the Company under the Note Purchase Agreement
as and when the same are due and payable and shall not be deemed to be a
guarantee only of the collectibility of such payments.

         Section 1.2.   Guaranty of Payment and Performance. This is a guarantee
of payment and performance, and the Guarantor hereby waives any right to require
that any action on or in respect of any Note or the Note Purchase Agreement be
brought against the Company or that resort be had to any direct or indirect
security for the Notes or for this guaranty or any other remedy; accordingly,
the holder of any Note may, at its option, proceed hereunder against the
Guarantor in the first instance to collect monies when due, the payment of which
is guaranteed hereby, without first proceeding against the Company or any other
Person and without first resorting to any direct or indirect security for the
Notes, or for this guaranty or any other remedy. The liability of the Guarantor
hereunder shall in no way be affected or impaired by any acceptance by any
holder of any Note of any direct or indirect security for, or other guaranties
of, any indebtedness, liability or obligation of the Company or any other Person
to any holder of any Note or by any failure, delay, neglect or omission by the
holder of any Note to realize upon or protect any such indebtedness, liability
or obligation or any notes or other instruments evidencing the same or any
direct or indirect security therefor or by any approval, consent, waiver or
other action taken, or omitted to be taken, by any such holder.

         Section 1.3.   Guarantor Consent. The Guarantor hereby consents and
agrees that the holder of any Note from time to time, with or without any
further notice to or assent from the Guarantor, may, without in any manner
affecting the liability of the Guarantor, and upon such terms and conditions as
such holder may deem advisable: (a) extend in whole or in part (by renewal or
otherwise), modify, change, compromise, release or extend the duration of the
time for the performance or payment of, any indebtedness, liability or
obligation of the Company or

                                       -2-

<PAGE>

of any other Person secondarily or otherwise liable for any indebtedness,
liability or obligations of the Company on the Notes, or waive any default with
respect thereto, or waive, modify, amend or change any provision of any
instruments evidencing any such indebtedness, liability or obligation; provided
that if the holder of any Note shall agree with the Company to any amendment or
modification of the Note Purchase Agreement or the Notes held by such holder,
this guaranty shall apply to the Note Purchase Agreement and the Notes as so
amended or modified; (b) sell, release, surrender, modify, impair, exchange or
substitute any and all property, of any nature and from whomsoever received,
held by, or on behalf of, any such holder as direct or indirect security for the
payment or performance of any indebtedness, liability or obligation of the
Company or of any other Person secondarily or otherwise liable for any
indebtedness, liability or obligation of the Company on the Notes; and (c)
settle, adjust or compromise any claim of the Company against any other Person
secondarily or otherwise liable for any indebtedness, liability or obligation of
the Company on the Notes. The Guarantor hereby ratifies and confirms any such
extension, renewal, change, sale, release, waiver, surrender, exchange,
modification, amendment, impairment, substitution, settlement, adjustment or
compromise and agrees that the same shall be binding upon it, and hereby waives
any and all defenses, counterclaims or offsets which it might or could have by
reason thereof, it being understood that the Guarantor shall at all times be
bound by this guaranty and remain liable hereunder until the Notes are paid in
full.

         Section 1.4.   Obligation Absolute and Unconditional. The obligations
of the Guarantor under this guaranty shall be absolute and unconditional and
shall remain in full force and effect until the entire principal, interest,
Make-Whole Amount, if any, and Series B Premium Amount, if any, on the Notes and
all other sums due pursuant to Section 1.1 shall have been paid (including any
payments required by Section 1.6) and such obligations shall not be affected,
modified or impaired upon the happening from time to time of any event,
including without limitation any of the following, whether or not with notice to
or the consent of the Guarantor:

                  (a)      the power or authority or the lack of power or
         authority of the Company to issue the Notes or to execute and deliver
         the Note Purchase Agreement, or of any defense whatsoever that the
         Company may or might have to the payment of the Notes (principal,
         interest, Make-Whole Amount, if any, and Series B Premium Amount, if
         any, or any other amounts payable by the Company under the Note
         Purchase Agreement) or to the performance or observance of any of the
         provisions or conditions of the Note Purchase Agreement, or the
         existence or continuance of the Company as a legal entity;

                  (b)      any failure to present the Notes for payment or to
         demand payment thereof, or to give the Guarantor or the Company notice
         of dishonor for non-payment of the Notes, when and as the same may
         become due and payable, or notice of any failure on the part of the
         Company to do any act or thing or to perform or to keep any covenant or
         agreement by it to be done, kept or performed under the terms of the
         Notes or the Note Purchase Agreement;

                  (c)      the acceptance of any security or any guaranty, the
         advance of additional money to the Company, any extension of the
         obligation of the Notes, either indefinitely or for any period of time,
         or any other modification in the obligation of the Notes or of

                                       -3-

<PAGE>

         the Note Purchase Agreement or the Company thereon, or in connection
         therewith, or any sale, release, substitution or exchange of any
         security;

                  (d)      any act or failure to act with regard to the Notes or
         the Note Purchase Agreement or anything which might vary the risk of
         the Guarantor;

                  (e)      any action taken under the Note Purchase Agreement in
         the exercise of any right or power thereby conferred or any failure or
         omission on the part of any holder of any Note to first enforce any
         right or security given under the Note Purchase Agreement or any
         failure or omission on the part of any holder of any of the Notes to
         first enforce any right against the Company;

                  (f)      the waiver, compromise, settlement, release or
         termination of any or all of the obligations, covenants or agreements
         of the Company contained in the Note Purchase Agreement, or of the
         payment, performance or observance thereof;

                  (g)      the failure to give notice to the Company or the
         Guarantor of the occurrence of any Default or Event of Default under
         the terms and provisions of the Note Purchase Agreement;

                  (h)      the extension of the time for payment of any
         principal of, or interest (or Make-Whole Amount, if any, or Series B
         Premium Amount, if any, or any other amounts payable by the Company
         under the Note Purchase Agreement), on any Note owing or payable on
         such Note or of the time of or for performance of any obligations,
         covenants or agreements under or arising out of the Note Purchase
         Agreement or the extension or the renewal of any thereof;

                  (i)      the modification or amendment (whether material or
         otherwise) of any obligation, covenant or agreement set forth in the
         Note Purchase Agreement or the Notes; provided that if a holder of any
         Note shall agree with the Company to any amendment or modification of
         the Note Purchase Agreement or the Notes held by such holder, this
         guaranty shall apply to the Note Purchase Agreement and the Notes as so
         amended or modified;

                  (j)      any failure, omission, delay or lack on the part of
         the holders of the Notes to enforce, assert or exercise any right,
         power or remedy conferred on the holders of the Notes in the Note
         Purchase Agreement or the Notes or any other act or acts on the part of
         the holders from time to time of the Notes;

                  (k)      the voluntary or involuntary liquidation,
         dissolution, sale or other disposition of all or substantially all the
         assets, marshalling of assets and liabilities, receivership,
         insolvency, bankruptcy, assignment for the benefit of creditors,
         reorganization or arrangement under bankruptcy or similar laws,
         composition with creditors or readjustment of, or other similar
         procedures affecting the Company or any of the assets of the Company,
         or any allegation or contest of the validity of this Agreement

                                       -4-

<PAGE>

         or the Note Purchase Agreement or the disaffirmance of this Agreement
         or the Note Purchase Agreement in any such proceeding;

                  (l)      the invalidity or unenforceability of the Notes or
         the Note Purchase Agreement;

                  (m)      the absence of any action to enforce such obligations
         of the Guarantor, any waiver or consent by the Guarantor with respect
         to any of the provisions hereof or any other circumstances which might
         otherwise constitute a discharge or defense by the Guarantor,
         including, without limitation, any failure or delay in the enforcement
         of the obligations of the Guarantor with respect to this guaranty or of
         notice thereof; or any suit or other action brought by any shareholder
         or creditor of, or by, the Guarantor or any other Person, for any
         reason, including, without limitation, any suit or action in any way
         attacking or involving any issue, matter or thing in respect of this
         guaranty, this Agreement, the Note Purchase Agreement, the Notes or any
         other agreement;

                  (n)      the default or failure of the Guarantor fully to
         perform any of its covenants or obligations set forth in this
         Agreement;

                  (o)      the impossibility or illegality of performance on the
         part of the Company or any other Person of its obligations under the
         Notes, the Note Purchase Agreement or any other instruments;

                  (p)      in respect of the Company or any other Person, any
         change of circumstances, whether or not foreseen or foreseeable,
         whether or not imputable to the Company or any other Person, or other
         impossibility of performance through fire, explosion, accident, labor
         disturbance, floods, droughts, embargoes, wars (whether or not
         declared), civil commotions, acts of God or the public enemy, action of
         any United States Federal or state regulatory body or agency, change of
         law or any other causes affecting performance, or other force majeure,
         whether or not beyond the control of the Company or any other Person
         and whether or not of the kind hereinbefore specified;

                  (q)      any attachment, claim, demand, charge, Lien, order,
         process, encumbrance or any other happening or event or reason, similar
         or dissimilar to the foregoing, or any withholding or diminution at the
         source, by reason of any taxes, assessments, expenses, indebtedness,
         obligations or liabilities of any character, foreseen or unforeseen,
         and whether or not valid, incurred by or against any Person, or any
         claims, demands, charges or Liens of any nature, foreseen or
         unforeseen, incurred by any Person, or against any sums payable under
         this Agreement, so that such sums would be rendered inadequate or would
         be unavailable to make the payments herein provided; or

                  (r)      the failure of the Guarantor to receive any benefit
         or consideration from or as a result of its execution, delivery and
         performance of this Agreement;

provided that the specific enumeration of the above-mentioned acts, failures or
omissions shall not be deemed to exclude any other acts, failures or omissions,
though not specifically mentioned

                                       -5-

<PAGE>

above, it being the purpose and intent of this paragraph that the obligations of
the Guarantor hereunder shall be absolute and unconditional and shall not be
discharged, impaired or varied except by amendment, modification or waiver of
this Agreement in accordance with Section 7 hereof or by the payment to the
holders thereof of the principal of, interest on, Make-Whole Amount, if any, and
Series B Premium Amount, if any, and other amount due in respect of the Notes,
and then only to the extent of such payments. All rights of the holder of any
Note pursuant thereto or to the Note Purchase Agreement may be transferred or
assigned at any time or from time to time and shall be considered to be
transferred or assigned upon the transfer of such Note whether with or without
the consent of or notice to the Guarantor. Without limiting the foregoing, it is
understood that repeated and successive demands may be made and recoveries may
be had hereunder as and when, from time to time, the Company shall default under
the terms of the Notes or the Note Purchase Agreement and that notwithstanding
recovery hereunder for or in respect of any given default or defaults by the
Company under the Notes or the Note Purchase Agreement, this guaranty shall
remain in full force and effect and shall apply to each and every subsequent
default.

         Section 1.5.   Acceleration. Without limiting the other rights of the
holders of the Notes and obligations of the Guarantor under this Agreement, if
an Event of Default occurs and is continuing under the Note Purchase Agreement
which would permit the acceleration of the Notes but for any limitation on such
acceleration imposed on account of any bankruptcy, insolvency or other legal
proceedings relating to the Company, then upon receipt of written notice from
the holders of the applicable percentage of the Notes entitled to accelerate the
Notes pursuant to Section 12.1 of the Note Purchase Agreement on account of such
Event of Default, the full amount of the guaranteed indebtedness together with
accrued interest, any Make-Whole Amount, any Series B Premium Amount and LIBOR
Breakage Amount and any other amounts payable by the Company under the Note
Purchase Agreement which would then be payable pursuant to Section 12.1 of the
Note Purchase Agreement shall be and become immediately due and payable from the
Guarantor whether or not the Notes have been declared to be or have become
immediately due and payable from the Company.

         Section 1.6.   Preference. The Guarantor agrees that to the extent the
Company makes any payment on the Notes, which payment or any part thereof is
subsequently invalidated, voided, declared to be fraudulent or preferential, set
aside, or is required to be repaid to a trustee, receiver or any other Person
under any bankruptcy code, common law, equitable cause, or otherwise, then and
to the extent of such payment, the obligation or the part thereof intended to be
satisfied shall be revived and continued in full force and effect with respect
to the Guarantor's obligations hereunder, as if said payment had not been made.
The liability of the Guarantor hereunder shall not be reduced or discharged, in
whole or in part, by any payment to any holder of the Notes from any source that
is thereafter paid, returned or refunded in whole or in part by reason of the
assertion of a claim of any kind relating thereto, including, but not limited
to, any claim for breach of contract, breach of warranty, preference,
illegality, invalidity or fraud asserted by any account debtor or by any other
Person.

         Section 1.7.   Marshalling. None of the holders of the Notes shall be
under any obligation (a) to marshall any assets in favor of the Guarantor or in
payment of any or all of the liabilities of the Company under or in respect of
the Notes or the obligation of the Guarantor

                                       -6-

<PAGE>

hereunder or (b) to pursue any other remedy that the Guarantor may or may not be
able to pursue itself and that may lighten the Guarantor's burden, any right to
which the Guarantor hereby expressly waives.

         Section 1.8.   Subrogation. To the extent that payments made by the
Guarantor under this Agreement shall give rise to rights of subrogation, the
Guarantor covenants and agrees that such right of subrogation shall be
subordinate in right of payment to the payment in full of the Notes together
with all accrued and unpaid interest thereon any Make-Whole Amount, if any, and
Series B Premium Amount, if any, to that end, the Guarantor agrees not to claim
or enforce any such right of subrogation or any right of set-off or any other
right which may arise on account of any payment made by the Guarantor in
accordance with the provisions of this Agreement unless and until all of the
Notes and all other sums due and payable under the Note Purchase Agreement have
been fully paid and discharged.

SECTION 2.           REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR.

         The Guarantor represents and warrants to each holder of a Note that:

         Section 2.1.   Organization; Power and Authority. The Guarantor is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The
Guarantor has the corporate power and authority to own or hold under lease the
properties it purports to own or hold under lease, to transact the business it
transacts, to execute and deliver this Agreement and to perform the provisions
hereof.

         Section 2.2.   Authorization, Etc. This Agreement has been duly
authorized by all necessary corporate action on the part of the Guarantor, and
constitutes the legal, valid and binding obligation of the Guarantor enforceable
against the Guarantor in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

         Section 2.3.   Disclosure. The Guarantor, through its agent, Banc of
America Securities LLC has delivered to each Purchaser a copy of a Private
Placement Memorandum, dated February, 2003 (the "Memorandum"), relating to the
transactions contemplated hereby. This Agreement, the Memorandum, the documents,
certificates or other writings identified in Schedule 2.3 and the financial
statements listed in Schedule 2.11 (collectively, the "Disclosure Materials"),
taken as a whole, do not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made. Since
December 31, 2002, there has been no change in the financial condition,
operations, business or assets of the Guarantor or any Restricted Subsidiary
except changes that individually or in the aggregate could not reasonably

                                       -7-

<PAGE>

be expected to have a Material Adverse Effect. Except as expressly set forth in
the Disclosure Materials, there is no fact known to the Senior Financial
Officers of the Guarantor that could reasonably be expected to have a Material
Adverse Effect that has not otherwise been disclosed.

         Section 2.4.   Organization and Ownership of Shares of Subsidiaries.
(a) Schedule 2.4 is (except as noted therein) a complete and correct list of (a)
the Guarantors' Subsidiaries, showing, as to each directly owned Subsidiary, the
correct name thereof, the jurisdiction of its organization, and the percentage
of shares of each class of its capital stock or similar equity interests
outstanding owned by the Guarantor and each other Subsidiary, (b) the
Guarantor's Affiliates, other than Subsidiaries and (c) the names of the
Guarantor's directors and officers.

         (b)      All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 2.4 as being owned by the
Guarantor and its Subsidiaries have been validly issued, are fully paid and
nonassessable, except in cases in which the failure to be validly issued, fully
paid and nonassessable would not be expected to have a Material Adverse Effect,
and are owned by the Guarantor or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 2.14).

         (c)      Except as would not reasonably be expected to have a Material
Adverse Effect, each Subsidiary identified in Schedule 2.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law. Except as would not reasonably
be expected to have a Material Adverse Effect, each such Subsidiary has the
corporate or other power and authority to own or hold under lease the properties
it purports to own or hold under lease and to transact the business it
transacts.

         (d)      Except for limitations set forth in the Bank Credit Agreement
and for limitations imposed on Foreign Subsidiaries by bank credit agreements
pursuant to which borrowings of up to 10 million euros may from time to time be
outstanding, or as limited by applicable law, no Subsidiary is a party to any
agreement or legal restriction which limits its ability to pay profit
distributions to the Guarantor or any of its Subsidiaries that owns outstanding
equity interests of such Subsidiary.

         Section 2.5.   Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Guarantor of this Agreement will not
contravene, result in any breach of, or constitute a default under, the
corporate charter or by-laws of the Guarantor. The execution, delivery and
performance by the Guarantor of this Agreement will not (i) contravene, result
in any breach of, or constitute a default under, or result in the creation of
any Lien in respect of any property of the Guarantor or any Subsidiary under,
any indenture, deed of trust, loan, purchase or credit agreement, Material
lease, or any other Material agreement or instrument to which the Guarantor or
any Subsidiary is bound or by which the Guarantor or any Subsidiary or any of
their respective properties may be bound or affected, (ii) conflict with or
result in a breach of any of the terms, conditions or provisions of any order,
judgment, decree, or ruling of any court, arbitrator or Governmental Authority
applicable to the Guarantor or any Subsidiary or (iii) violate any provision of
any statute or other rule or regulation of any Governmental

                                       -8-

<PAGE>

Authority applicable to the Guarantor or any Subsidiary which, in any such case,
would reasonably be expected to have a Material Adverse Effect.

         Section 2.6.   Governmental Authorizations, Etc. No consent, approval
or authorization of, or registration, filing or declaration with, any
Governmental Authority is required in connection with the execution, delivery or
performance by the Guarantor of this Agreement.

         Section 2.7.   Litigation; Observance of Agreements, Statutes and
Orders. (a) There are no actions, suits or proceedings pending or, to the
knowledge of the Guarantor, threatened against or affecting the Guarantor or any
Subsidiary or any property of the Guarantor or any Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

         (b)      Neither the Guarantor nor any Subsidiary is in default under
any term of any agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority, or is in violation of any applicable law, ordinance,
rule or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

         Section 2.8.   Taxes. The Guarantor and its Subsidiaries have filed all
Material tax returns that are required to have been filed in any jurisdiction,
and have paid all taxes shown to be due and payable on such returns and all
other taxes and assessments levied upon them or their properties, assets, income
or franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent, except for any taxes and
assessments (i) the amount of which is not individually or in the aggregate
Material or (ii) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Guarantor or a Subsidiary, as the case may be, has established
adequate reserves in accordance with GAAP. The Guarantor knows of no basis for
any other tax or assessment that could reasonably be expected to have a Material
Adverse Effect. The charges, accruals and reserves on the books of the Guarantor
and its Subsidiaries in respect of all taxes for all fiscal periods are adequate
in accordance with GAAP. The Federal income tax liabilities of the Guarantor and
its Subsidiaries have been determined by the Internal Revenue Service and paid
for all fiscal years up to and including the fiscal year ended 1999.

         Section 2.9.   Title to Property; Leases. The Guarantor and its
Restricted Subsidiaries have good and sufficient title to their respective
properties, including all such properties reflected in the most recent audited
balance sheet referred to in Section 2.11 (except as sold or otherwise disposed
of in the ordinary course of business), in each case free and clear of Liens
(other than Liens permitted under Section 5.3) except for those defects in title
and Liens that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. All leases that individually or in
the aggregate are Material are valid and existing and are in full force and
effect in all Material respects.

                                       -9-

<PAGE>

         Section 2.10.  Licenses, Permits, Etc. Except as disclosed in Schedule
2.10, (a) the Guarantor and its Restricted Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights, service
marks, trademarks and trade names, or rights thereto, that are Material, without
known conflict with the rights of others, except for those conflicts that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect; (b) to the knowledge of the Guarantor, no product of
the Guarantor infringes in any Material respect any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade name or other
right owned by any other Person, except for those infringements that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect; and (c) to the knowledge of the Guarantor, there is no
Material violation by any Person of any right of the Guarantor or any of its
Restricted Subsidiaries with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by the Guarantor or any of
its Restricted Subsidiaries that would reasonably be expected to have a Material
Adverse Effect.

         Section 2.11.  Financial Statements. The Guarantor has either delivered
to each Purchaser or made available for such Purchaser's review copies of the
financial statements of the Guarantor and its Subsidiaries listed on Schedule
2.11. All of said financial statements (including in each case the related
schedules and notes) fairly present in all material respects the consolidated
financial position of the Guarantor and its Subsidiaries as of the respective
dates specified in such Schedule and the consolidated results of their
operations and cash flows for the respective periods so specified and have been
prepared in accordance with GAAP consistently applied throughout the periods
involved except as set forth in the notes thereto (subject, in the case of any
interim financial statements, to normal year-end adjustments).

         Section 2.12.  Private Offering. Neither the Guarantor nor the Company
nor anyone acting under their direction has offered the Notes, or any similar
securities for sale to, or solicited any offer to buy any of the same from, any
Person other than 24 Institutional Investors (excluding the Purchasers), each of
which has been offered the Notes at a private sale for investment. Neither the
Guarantor nor the Company nor anyone acting under their direction has taken, or
will take, any action that would subject the issuance or sale of the Notes to
the registration requirements of section 5 of the Securities Act.

         Section 2.13.  Use of Proceeds; Margin Regulations. Proceeds of the
sale of the Notes will be used for general corporate purposes (including stock
buybacks and acquisitions) of the Guarantor and its Subsidiaries and to repay
Debt of the Company. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221) which will directly or
indirectly (as defined in Regulation U) secure the Notes, or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Guarantor in a violation of Regulation X of said Board (12 CFR 224)
or to involve any broker or dealer in a violation of Regulation T of said Board
(12 CFR 220). The value of the margin stock held by the Guarantor and its
Subsidiaries (based upon the closing price of the Guarantor's common stock on
the New York Stock Exchange as of the most recent Business Day prior to the
Closing) does not constitute more than 30% of the value of the Consolidated
Total Assets of the Guarantor and its Subsidiaries at December 31, 2002, as

                                      -10-

<PAGE>

adjusted to give effect to (i) the increase or decrease in the number of shares
of margin stock held by the Guarantor and its Subsidiaries from December 31,
2002 through the date of the Closing and (ii) the increase or decrease in the
market value of the margin stock held by the Guarantor and its Subsidiaries on
December 31, 2002 to the extent that such margin stock is held by the Guarantor
and its Subsidiaries on the date of the Closing. As used in this Section, the
terms "margin stock" and "purpose of buying or carrying" and "directly or
indirectly" shall have the meanings assigned to them in said Regulation U.

         Section 2.14.  Existing Debt, Future Liens. (a) Schedule 2.14 sets
forth a complete and correct list of all outstanding Debt of the Guarantor and
its Restricted Subsidiaries as of February 28, 2003. Neither the Guarantor nor
any Restricted Subsidiary is in default and no waiver of default is currently in
effect, in the payment of any principal or interest on any Debt of the Guarantor
or such Restricted Subsidiary, and no event or condition exists with respect to
any Debt of the Guarantor or any Restricted Subsidiary, that would permit (or
that with notice or the lapse of time, or both, would permit) one or more
Persons to cause such Debt to become due and payable before its stated maturity
or before its regularly scheduled dates of payment.

         (b)      Except as disclosed in Schedule 2.14, the Guarantor has not
agreed or consented to cause or permit in the future (upon the happening of a
contingency or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien not permitted by Section 5.3.

         Section 2.15.  Compliance with ERISA. (a) The Guarantor and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Guarantor nor any ERISA Affiliate has incurred any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans (as defined in Section 3 of ERISA),
and no event, transaction or condition has occurred or exists that could
reasonably be expected to result in the incurrence of any such liability by the
Guarantor or any ERISA Affiliate, or in the imposition of any Lien on any of the
rights, properties or assets of the Guarantor or any ERISA Affiliate, in either
case pursuant to Title I or IV of ERISA or to such penalty or excise tax
provisions or to Section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the aggregate Material.

         (b)      The present value of the aggregate benefit liabilities under
each of the Plans (other than Multiemployer Plans), determined as of the end of
such Plan's most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plan's most recent actuarial
valuation report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities by an amount which would be
Material. The term "benefit liabilities" has the meaning specified in section
4001 of ERISA and the terms "current value" and "present value" have the
meanings specified in Section 3 of ERISA.

         (c)      The Guarantor and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are Material.

                                      -11-

<PAGE>

         (d)      The expected postretirement benefit obligation (determined as
of the last day of the Guarantor's most recently ended fiscal year in accordance
with Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Guarantor and its Subsidiaries is not Material or has otherwise
been disclosed in the financial statements set forth on Schedule 2.11.

         (e)      The execution and delivery of this Agreement will not involve
any transaction that is subject to the prohibitions of section 406 of ERISA or
in connection with which a tax could be imposed pursuant to section
4975(c)(1)(A)-(D) of the Code. The representation by the Guarantor in the first
sentence of this Section 2.15(e) is made in reliance upon and subject to the
accuracy of each Purchaser's representation in Section 6.2 of the Note Purchase
Agreement as to the sources of the funds used to pay the purchase price of the
Notes to be purchased by such Purchaser.

         Section 2.16.  Foreign Assets Control Regulations, Etc. Neither the
sale of the Notes by the Company pursuant to the Note Purchase Agreement, its
use of the proceeds thereof nor the execution and delivery of this Agreement by
the Guarantor will violate the Trading with the Enemy Act, as amended, or any of
the foreign assets control regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto or Executive Order No. 13,224, 66 Fed. Reg.
49,079 (September 24, 2001) (Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten, or Support Terrorism).

         Section 2.17.  Status under Certain Statutes. Neither the Guarantor nor
any Restricted Subsidiary is an "investment company" registered or required to
be registered under the Investment Company Act of 1940, as amended, or is
subject to regulation under the Public Utility Holding Company Act of 1935, as
amended, the ICC Termination Act of 1995, as amended, or the Federal Power Act,
as amended.

         Section 2.18.  Environmental Matters. Except as set forth in Schedule
2.18, neither the Guarantor nor any Restricted Subsidiary has knowledge of any
Material liability or any proceeding which has been instituted raising any
Material liability against the Guarantor or any of its Restricted Subsidiaries
or any of their respective real properties now or formerly owned, leased or
operated by it or other assets, alleging any damage to the environment or
violation of any Environmental Laws, except in each case as could not reasonably
be expected to result in a Material Adverse Effect. Except as otherwise
disclosed to each Purchaser in writing or as set forth in Schedule 2.18:

                  (a)      neither the Guarantor nor any Subsidiary has
         knowledge of any facts which would give rise to any claim, public or
         private, for violation of Environmental Laws or damage to the
         environment emanating from, occurring on or in any way related to real
         properties or to other assets now or formerly owned, leased or operated
         by any of them or their use, except, in each case, such as could not
         reasonably be expected to result in a Material Adverse Effect;

                                      -12-

<PAGE>

                  (b)      neither the Guarantor nor any of its Subsidiaries has
         stored any Hazardous Materials on real properties now or formerly
         owned, leased or operated by any of them or has disposed of any
         Hazardous Materials in each case in a manner contrary to any
         Environmental Laws and in any manner that could reasonably be expected
         to result in a Material Adverse Effect; and

                  (c)      all buildings on all real properties now owned,
         leased or operated by the Guarantor or any of its Subsidiaries are in
         compliance with applicable Environmental Laws, except where failure to
         comply could not reasonably be expected to result in a Material Adverse
         Effect.

SECTION 3.           INFORMATION AS TO GUARANTOR.

         Section 3.1.   Financial and Business Information. The Guarantor shall
deliver to each holder of Notes that is an Institutional Investor:

                  (a)      Quarterly Statements -- within 60 days after the end
         of each quarterly fiscal period in each fiscal year of the Guarantor
         (other than the last quarterly fiscal period of each such fiscal year),
         duplicate copies of:

                           (i)      an unaudited consolidated balance sheet of
                  the Guarantor and its Subsidiaries as at the end of such
                  quarter, and

                           (ii)     unaudited consolidated statements of income,
                  changes in shareholders' equity and cash flows of the
                  Guarantor and its Subsidiaries for such quarter and (in the
                  case of the second and third quarters) for the portion of the
                  fiscal year ending with such quarter,

         setting forth in each case in comparative form the figures for the
         corresponding periods in the previous fiscal year, all in reasonable
         detail, prepared in accordance with GAAP applicable to quarterly
         financial statements generally, and certified by a Senior Financial
         Officer as fairly presenting, in all material respects, the financial
         position of the companies being reported on and their results of
         operations and cash flows, subject to changes resulting from year-end
         adjustments, provided that delivery within the time period specified
         above of copies of the Guarantor's Quarterly Report on Form 10-Q
         prepared in compliance with the requirements therefor and filed with
         the Securities and Exchange Commission shall be deemed to satisfy the
         requirements of this Section 3.1(a);

                  (b)      Annual Statements -- within 105 days after the end of
         each fiscal year of the Guarantor, duplicate copies of:

                           (i)      a consolidated balance sheet of the
                  Guarantor and its Subsidiaries, as at the end of such year,
                  and

                           (ii)     consolidated statements of income, changes
                  in shareholders' equity and cash flows of the Guarantor and
                  its Subsidiaries, for such year,

                                      -13-

<PAGE>

         setting forth in each case in comparative form the figures for the
         previous fiscal year, all in reasonable detail, prepared in accordance
         with GAAP, and accompanied by an opinion thereon of independent
         certified public accountants of recognized national standing, which
         opinion shall state that such financial statements present fairly, in
         all material respects, the financial position of the companies being
         reported upon and their results of operations and cash flows and have
         been prepared in conformity with GAAP, and that the examination of such
         accountants in connection with such financial statements has been made
         in accordance with generally accepted auditing standards, and that such
         audit provides a reasonable basis for such opinion in the
         circumstances, provided that the delivery within the time period
         specified above of the Guarantor's Annual Report on Form 10-K for such
         fiscal year (together with the Guarantor's annual report to
         shareholders, if any, prepared pursuant to Rule 14a-3 under the
         Exchange Act) prepared in accordance with the requirements therefor and
         filed with the Securities and Exchange Commission, together with the
         accountant's certificate described above, shall be deemed to satisfy
         the requirements of this Section 3.1(b);

                  (c)      SEC and Other Reports -- promptly upon their becoming
         available, one copy of (i) each financial statement, report, notice or
         proxy statement sent by the Guarantor or any Subsidiary to public
         securities holders generally, and (ii) each regular or periodic report,
         each registration statement (without exhibits except as expressly
         requested by such holder and excluding registration statements on form
         S-8), and each prospectus and all amendments thereto (excluding those
         related to plans registered on a Form S-8 registration statement) filed
         by the Guarantor or any Subsidiary with the Securities and Exchange
         Commission and of all press releases and other statements made
         available generally by the Guarantor or any Subsidiary to the public
         concerning developments that are Material;

                  (d)      Notice of Default or Event of Default -- promptly,
         and in any event within five Business Days after a Responsible Officer
         becoming aware of the existence of any Default or Event of Default or
         that any Person has given any notice or taken any action with respect
         to a claimed default hereunder or that any Person has given any notice
         or taken any action with respect to a claimed default of the type
         referred to in Section 11 of the Note Purchase Agreement, a written
         notice specifying the nature and period of existence thereof and what
         action the Guarantor or the Company is taking or proposes to take with
         respect thereto;

                  (e)      ERISA Matters -- promptly, and in any event within
         ten Business Days after a Responsible Officer becoming aware of any of
         the following, a written notice setting forth the nature thereof and
         the action, if any, that the Guarantor or an ERISA Affiliate proposes
         to take with respect thereto:

                           (i)      with respect to any Plan, any Reportable
                  Event for which notice thereof has not been waived pursuant to
                  such regulations as in effect on the date hereof; or

                                      -14-

<PAGE>

                           (ii)     the taking by the PBGC of steps to
                  institute, or the threatening by the PBGC of the institution
                  of, proceedings under section 4042 of ERISA for the
                  termination of, or the appointment of a trustee to administer,
                  any Plan, or the receipt by the Guarantor or any ERISA
                  Affiliate of a notice from a Multiemployer Plan that such
                  action has been taken by the PBGC with respect to such
                  Multiemployer Plan; or

                           (iii)    any event, transaction or condition that
                  could result in the incurrence of any liability by the
                  Guarantor or any ERISA Affiliate pursuant to Title I or IV of
                  ERISA or the penalty or excise tax provisions of the Code
                  relating to employee benefit plans, or in the imposition of
                  any Lien on any of the rights, properties or assets of the
                  Guarantor or any ERISA Affiliate pursuant to Title I or IV of
                  ERISA or such penalty or excise tax provisions, if such
                  liability or Lien, taken together with any other such
                  liabilities or Liens then existing, could reasonably be
                  expected to have a Material Adverse Effect;

                  (f)      Notices from Governmental Authority -- promptly, and
         in any event within 30 days of receipt thereof, copies of any notice to
         the Guarantor or any Subsidiary from any Federal or state Governmental
         Authority relating to any order, ruling, statute or other law or
         regulation that could reasonably be expected to have a Material Adverse
         Effect;

                  (g)      Supplemental Financial Statements -- in the event
         that the Guarantor has one or more Unrestricted Subsidiaries, unaudited
         financial statements of the character and for the dates and periods as
         in Sections 3.1(a) and (b) hereof covering the Guarantor and its
         Restricted Subsidiaries on a consolidated basis, together with a
         consolidating statement reflecting eliminations or adjustments required
         to reconcile such financial statements to the financial statements
         delivered pursuant to Sections 7.1(a) and (b); and

                  (h)      Requested Information -- with reasonable promptness,
         such other data and information relating to the business, operations or
         financial condition of the Guarantor or any of its Subsidiaries and
         relating to the ability of the Guarantor to perform its obligations
         hereunder as from time to time may be reasonably requested by any such
         holder of Notes.

         Section 3.2.   Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 3.1(a) or Section 3.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer on
behalf of the Guarantor setting forth:

                  (a)      Covenant Compliance -- the information (including
         detailed calculations) required in order to establish whether the
         Guarantor was in compliance with the requirements of Section 5.1,
         Section 5.2 and Section 5.4 hereof during the quarterly or annual
         period covered by the statements then being furnished (including with
         respect to each such Section, where applicable, the calculations of the
         maximum or minimum amount, ratio or percentage, as the case may be,
         permissible under the terms of such Sections, and the calculation of
         the amount, ratio or percentage then in existence); and

                                      -15-

<PAGE>

                  (b)      Event of Default -- a statement that such officer has
         reviewed the relevant terms hereof and of the Note Purchase Agreement
         and has made, or caused to be made, under his or her supervision, a
         review of the transactions and conditions of the Guarantor and its
         Subsidiaries from the beginning of the quarterly or annual period
         covered by the statements then being furnished to the date of the
         certificate and that such review shall not have disclosed the existence
         during such period of any condition or event that constitutes a Default
         or an Event of Default or, if any such condition or event existed or
         exists (including, without limitation, any such event or condition
         resulting from the failure of the Guarantor or any Restricted
         Subsidiary to comply with any Environmental Law), specifying the nature
         and period of existence thereof and what action the Guarantor shall
         have taken or proposes to take with respect thereto.

         Section 3.3.   Inspection. The Guarantor shall permit the
representatives of each holder of Notes that is an Institutional Investor:

                  (a)      No Default -- if no Default or Event of Default then
         exists, at the expense of such holder and upon reasonable prior notice
         to the Guarantor, to visit the principal executive office of the
         Guarantor, to discuss the affairs, finances and financial results of
         the Guarantor and its Subsidiaries with the Guarantor's Senior
         Financial Officers, and (with the consent of the Guarantor, which
         consent will not be unreasonably withheld) its independent public
         accountants, all at such reasonable times during normal business hours
         and as often as may be reasonably requested in writing; and

                  (b)      Default -- if a Default or Event of Default then
         exists, at the expense of the Guarantor to visit and inspect any of the
         offices or properties of the Guarantor or any Restricted Subsidiary
         during normal business hours and upon reasonable notice, to examine all
         their respective books of account, records, reports and other papers,
         to make copies and extracts therefrom, and to discuss their respective
         affairs, finances and financial results with their respective Senior
         Financial Officers and independent public accountants (and by this
         provision the Guarantor authorizes said accountants to discuss the
         affairs, finances and financial results of the Guarantor and its
         Subsidiaries), all at such times and as often as may be requested.

SECTION 4.           AFFIRMATIVE COVENANTS.

         The Guarantor covenants that so long as any of the Notes are
outstanding:

         Section 4.1.   Compliance with Law. The Guarantor will and will cause
each of its Restricted Subsidiaries to comply with all laws, ordinances or
governmental rules or regulations to which each of them is subject, including,
without limitation, Environmental Laws, and will obtain and maintain in effect
all licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

                                      -16-

<PAGE>

         Section 4.2.   Insurance. The Guarantor will and will cause each of its
Restricted Subsidiaries to maintain, with financially sound and reputable
insurers, insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in
such amounts (including deductibles, co-insurance and self-insurance, if
reserves required in accordance with GAAP are maintained with respect thereto)
as is customary in the case of entities of established reputations engaged in
the same or a similar business and similarly situated except for any
non-maintenance that could not reasonably be expected to have a Material Adverse
Effect.

         Section 4.3.   Maintenance of Properties. The Guarantor will and will
cause each of its Restricted Subsidiaries to maintain and keep, or cause to be
maintained and kept, their respective properties necessary in the operation of
their business in good repair, working order and condition (other than ordinary
wear and tear), except where the failure to do so could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.

         Section 4.4.   Payment of Taxes and Claims. The Guarantor will and will
cause each of its Restricted Subsidiaries to file all tax returns required to be
filed in any jurisdiction and to pay and discharge prior to the expiration of
any applicable cure or grace periods all taxes shown to be due and payable on
such returns, provided that neither the Guarantor nor any Restricted Subsidiary
need pay any such tax or assessment or claims if (i) the amount, applicability
or validity thereof is contested by the Guarantor or such Restricted Subsidiary
on a timely basis in good faith and in appropriate proceedings, and the
Guarantor or a Restricted Subsidiary has established adequate reserves therefor
in accordance with GAAP on the books of the Guarantor or such Restricted
Subsidiary or (ii) the nonpayment of all such taxes and assessments in the
aggregate could not reasonably be expected to have a Material Adverse Effect.

         Section 4.5.   Corporate Existence, Etc. Subject to transactions
permitted under Section 5.5, the Guarantor will at all times preserve and keep
in full force and effect its corporate existence. Subject to transactions
permitted under Sections 5.4 and 5.5, the Guarantor will at all times preserve
and keep in full force and effect the corporate existence of each of its
Restricted Subsidiaries and all rights and franchises of the Guarantor and its
Restricted Subsidiaries unless, in the good faith judgment of the Guarantor, the
termination of or failure to preserve and keep in full force and effect such
corporate existence, right or franchise could not, individually or in the
aggregate, have a Material Adverse Effect.

         Section 4.6.   Designation of Subsidiaries. The Guarantor may from time
to time cause any Subsidiary (other than the Company and the Subsidiary
Guarantors) to be designated as an Unrestricted Subsidiary or any Unrestricted
Subsidiary to be designated a Restricted Subsidiary, provided, however, that at
the time of such designation and immediately after giving effect thereto, (a) no
Default or Event of Default would exist under the terms of this Agreement, and
(b) the Guarantor and its Restricted Subsidiaries would be in compliance with
all of the covenants set forth in this Section 4 and Section 5 if tested on the
date of such action and provided, further, that once a Restricted Subsidiary has
been designated an Unrestricted Subsidiary, it shall not thereafter be
redesignated as a Restricted Subsidiary on more than one occasion. Within ten
(10) days following any designation described above, the Guarantor will deliver
to each holder of a Note a notice of such designation accompanied by a
certificate signed

                                      -17-

<PAGE>

by a Senior Financial Officer of the Guarantor certifying compliance with all
requirements of this Section 4.6 and setting forth all information required in
order to establish such compliance.

         Section 4.7.   Ownership of Company. Except as otherwise permitted by
Section 5.5(a)(3), the Guarantor will at all times keep and maintain the Company
as a Restricted Subsidiary.

         Section 4.8.   Guaranty by Subsidiaries. (a) The Guarantor will cause
any Subsidiary (other than a Foreign Subsidiary which is a borrower under the
Bank Credit Agreement) which is required by the terms of the Bank Credit
Agreement to become a party to (as co-obligor with the Guarantor), or otherwise
guaranty Debt outstanding under the Bank Credit Agreement to deliver to each of
the holders of the Notes the following items on or prior to the effective date
of such obligation with respect to the Bank Credit Agreement:

                  (i)      a fully executed counterpart of the joinder to the
         Subsidiary Guaranty Agreement;

                  (ii)     a certificate signed by the President, a Vice
         President or another authorized Responsible Officer of the Subsidiary
         Guarantor making representations and warranties to the effect of those
         contained in Sections 2.1, 2.2, 2.5 and 2.6, with respect to such
         Subsidiary and the execution and delivery of the Subsidiary Guaranty
         Agreement; and

                  (iii)    an opinion of counsel for the Subsidiary Guarantor
         addressed to each of the holders of the Notes reasonably satisfactory
         to the Required Holders (it being understood that any such opinion
         which is in substantially the same form as the opinion with respect to
         the Subsidiary Guaranty delivered on the date of Closing shall be
         deemed satisfactory to the holders), to the effect that the Subsidiary
         Guaranty Agreement has been duly authorized, executed and delivered by
         such Subsidiary and constitutes the legal, valid and binding contract
         and agreement of such Subsidiary enforceable in accordance with its
         terms, except as enforcement of such terms may be limited by
         bankruptcy, insolvency, fraudulent conveyance and similar laws
         affecting the enforcement of creditors' rights generally and by general
         equitable principles.

         (b)      If at any time one or more Subsidiaries which have guaranteed
the Debt outstanding under the Bank Credit Agreement (and any other Debt which
ranks parri passu with the Notes) or which shall be co-obligors thereunder shall
be released from their obligations under each such guaranty and the Bank Credit
Agreement, then upon delivery to the holders of the Notes of evidence of such
release (which evidence shall be reasonably satisfactory to the Required
Holders) and so long as no Default or Event of Default shall exist, such
Subsidiary shall be released from its obligations under the Subsidiary Guaranty
Agreement. In addition, with the consent of the Required Holders, one or more
Subsidiary Guarantors may be released from the Subsidiary Guaranty.

                                      -18-

<PAGE>

SECTION 5.           NEGATIVE COVENANTS.

         The Guarantor covenants that so long as any of the Notes are
outstanding:

         Section 5.1.   Limitation on Debt. The Guarantor will not at any time
permit:

                  (a)      the Consolidated Leverage Ratio to exceed 3.5 to 1.0;
         and

                  (b)      Priority Debt to exceed 20% of Consolidated Total
         Capitalization as of the end of the most recently completed fiscal
         quarter.

         Section 5.2.   Consolidated Interest Coverage Ratio. The Guarantor will
not permit the Consolidated Interest Coverage Ratio to be less than 2.25 to 1.0
as of the end of the most recently ended fiscal quarter.

         Section 5.3.    Limitation on Liens. The Guarantor will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly create,
incur, assume or permit to exist (upon the happening of a contingency or
otherwise) any Lien on or with respect to any property or asset of the Guarantor
or any such Restricted Subsidiary, whether now owned or held or hereafter
acquired (unless it makes, or causes to be made, effective provision whereby the
Notes will be equally and ratably secured with any and all other obligations
thereby secured, such security to be pursuant to an agreement reasonably
satisfactory to the Required Holders), except:

                  (a)      Liens for taxes, assessments or other governmental
         charges that are not yet due and payable or the payment of which is not
         at the time required by Section 4.4;

                  (b)      any attachment or judgment Lien, unless the judgment
         it secures shall not, within 60 days after the entry thereof, have been
         discharged or execution thereof stayed pending appeal, or shall not
         have been discharged within 60 days after the expiration of any such
         stay;

                  (c)      Liens incidental to the conduct of business or the
         ownership of properties and assets (including landlords', carriers',
         warehousemen's, mechanics', materialmen's and other similar Liens for
         sums not yet due and payable) and Liens to secure the performance of
         bids, tenders, leases, or trade contracts, or to secure statutory
         obligations (including obligations under workers compensation,
         unemployment insurance and other social security legislation), surety
         or appeal bonds or other Liens incurred in the ordinary course of
         business and not in connection with the borrowing of money;

                  (d)      leases or subleases granted to others, easements,
         rights-of-way, restrictions and other similar charges or encumbrances,
         in each case incidental to the ownership of property or assets or the
         ordinary conduct of the business of the Guarantor or any of its
         Restricted Subsidiaries, provided that such Liens do not, in the
         aggregate, materially detract from the value of such property;

                                      -19-

<PAGE>

                  (e)      Liens incidental to minor survey exceptions and
         similar Liens, provided that such Liens do not, in the aggregate,
         materially detract from the value of such Property;

                  (f)      Liens securing Debt of a Restricted Subsidiary to the
         Guarantor or to another Wholly-Owned Restricted Subsidiary;

                  (g)      Liens existing as of the date of Closing and
         reflected in Schedule 5.3;

                  (h)      Liens incurred after the date of Closing given to
         secure the payment of the purchase price incurred in connection with
         the acquisition, construction or improvement of property (other than
         accounts receivable or inventory) useful and intended to be used in
         carrying on the business of the Guarantor or a Restricted Subsidiary,
         including Liens existing on such property at the time of acquisition or
         construction thereof, or Liens incurred within 365 days of such
         acquisition or the completion of such construction or improvement,
         provided that (i) the Lien shall attach solely to the property
         acquired, purchased, constructed or improved; and (ii) at the time of
         acquisition, construction or improvement of such property, the
         aggregate amount remaining unpaid on all Debt secured by Liens on such
         property, whether or not assumed by the Guarantor or a Restricted
         Subsidiary, shall not exceed an amount equal to the lesser of the total
         purchase price (or cost of construction or improvement) of such
         property or the Fair Market Value of such property at the time of
         acquisition, construction or improvement (as determined in good faith
         by one or more officers of the Guarantor or such Restricted Subsidiary,
         as the case may be, to whom authority to enter into the transaction has
         been delegated by the board of directors of the Company or such
         Restricted Subsidiary, as the case may be);

                  (i)      any Lien existing on property of a Person immediately
         prior to its being consolidated with or merged into the Guarantor or a
         Restricted Subsidiary or its becoming a Restricted Subsidiary, or any
         Lien existing on any property acquired by the Guarantor or any
         Restricted Subsidiary at the time such property is so acquired (whether
         or not the Debt secured thereby shall have been assumed), provided that
         (i) no such Lien shall have been created or assumed in contemplation of
         such consolidation or merger or such Person's becoming a Restricted
         Subsidiary or such acquisition of property, (ii) each such Lien shall
         extend solely to the item or items of property so acquired and, if
         required by the terms of the instrument originally creating such Lien,
         other property which is an improvement to or is acquired for specific
         use in connection with such acquired property, and (iii) at the time of
         acquisition of such property, the aggregate amount remaining unpaid on
         all Debt secured by Liens on the property so acquired, whether or not
         assumed by the Company or a Restricted Subsidiary, shall not exceed an
         amount equal to the lesser of the total purchase price or Fair Market
         Value of such property at the time of acquisition (as determined in
         good faith by one or more officers of the Company or such Restricted
         Subsidiary, as the case may be, to whom authority to enter into the
         transaction has been delegated by the board of directors of the Company
         or such Restricted Subsidiary, as the case may be);

                                      -20-

<PAGE>

                  (j)      Liens upon assets of any Receivables Subsidiary;
         provided that the aggregate principal amount of Receivables Facility
         Attributable Debt shall not exceed $75,000,000;

                  (k)      Liens on shares of treasury stock of the Guarantor to
         the extent that the Fair Market Value of the treasury stock so pledged
         is limited to an amount which is equal to the positive difference, if
         any, between the Fair Market Value of such treasury stock and 25% of
         the Consolidated Total Assets of the Guarantor;

                  (l)      any extensions, renewals or replacements of any Lien
         permitted by the preceding subparagraphs (f), (g), (h), (i) or (k) of
         this Section 5.3, provided that (i) no additional property shall be
         encumbered by such Liens, (ii) the unpaid principal amount of the Debt
         secured thereby shall not be increased on or after the date of any
         extension, renewal or replacement, and (iii) at such time and
         immediately after giving effect thereto, no Default or Event of Default
         shall have occurred and be continuing; and

                  (m)      in addition to the Liens permitted by the preceding
         subparagraphs (a) through (l), inclusive, of this Section 5.3, Liens
         securing Priority Debt of the Company and its Restricted Subsidiaries
         provided that such Priority Debt shall be permitted by the limitations
         set forth in Section 5.1 at the time that the Lien securing such
         Priority Debt is created.

         Section 5.4.   Sales of Assets. The Guarantor will not, and will not
permit any Restricted Subsidiary to, sell, lease or otherwise dispose of any
substantial part (as defined below) of the assets of the Guarantor and its
Restricted Subsidiaries in one transaction or in a series of transactions;
provided, however, that the Guarantor or any Restricted Subsidiary may sell,
lease or otherwise dispose of assets constituting a substantial part of the
assets of the Guarantor and its Restricted Subsidiaries if such assets are sold
in an arms length transaction and, at such time and after giving effect thereto,
no Default or Event of Default shall have occurred and be continuing and an
amount equal to the Net Proceeds received from such sale, lease or other
disposition shall be used within 365 days of such sale, lease or disposition, in
any combination:

                  (1)      to acquire productive assets used or useful in
         carrying on the business of the Guarantor and its Restricted
         Subsidiaries; or

                  (2)      to prepay or retire Senior Debt of the Guarantor
         and/or its Restricted Subsidiaries.

         As used in this Section 5.4, a sale, lease or other disposition of
assets shall be deemed to be a "substantial part" of the assets of the Guarantor
and its Restricted Subsidiaries if the book value of such assets, when added to
the book value of all other assets sold, leased or otherwise disposed of by the
Guarantor and its Restricted Subsidiaries during any fiscal year, exceeds 15% of
the book value of Consolidated Total Assets, determined as of the end of the
fiscal year immediately preceding such sale, lease or other disposition;
provided that there shall be excluded from any determination of a "substantial
part" any (i) sale or disposition of assets in the ordinary course of business
of the Guarantor and its Restricted Subsidiaries, (ii) any transfer of assets

                                      -21-

<PAGE>

from the Guarantor to any Wholly-owned Restricted Subsidiary or from any
Restricted Subsidiary to the Guarantor or a Wholly-owned Restricted Subsidiary,
(iii) any Excluded Sale Leaseback Transaction, (iv) the sale or transfer of
Accounts Receivable in a Permitted Receivables Purchase Facility, and (v) the
sale of treasury stock of the Guarantor; provided that the aggregate principal
amount of Receivables Facility Attributable Debt pursuant to such Permitted
Receivables Purchase Facility shall not exceed $75,000,000.

         Section 5.5.   Merger, Consolidation and Sale of Stock. (a) The
Guarantor will not, and will not permit any of its Restricted Subsidiaries to,
consolidate with or merge with any other corporation or convey, transfer or
lease substantially all of its assets in a single transaction or series of
transactions to any Person; provided that:

                  (1)      a Restricted Subsidiary of the Guarantor (other than
         the Company) may (x) consolidate with or merge with, or convey,
         transfer or lease substantially all of its assets in a single
         transaction or series of transactions to, the Guarantor or a
         Wholly-Owned Restricted Subsidiary so long as in any merger or
         consolidation involving the Guarantor, the Guarantor shall be the
         surviving or continuing corporation, (y) convey, transfer or lease all
         of its assets in compliance with the provisions of Section 5.4, or (z)
         merge or consolidate with any other Person in connection with the
         disposition of equity interests of the Guarantor or another Restricted
         Subsidiary in such Restricted Subsidiary; provided that such
         disposition can be made within the limitations of Section 5.4;

                  (2)      the foregoing restriction does not apply to the
         consolidation or merger of the Guarantor with, or the conveyance,
         transfer or lease of substantially all of the assets of the Guarantor
         in a single transaction or series of transactions to, any Person so
         long as:

                           (a)      the successor formed by such consolidation
                  or the survivor of such merger or the Person that acquires by
                  conveyance, transfer or lease substantially all of the assets
                  of the Guarantor as an entirety, as the case may be (the
                  "Successor Corporation"), shall be a solvent corporation
                  organized and existing under the laws of the United States of
                  America, any State thereof or the District of Columbia;

                           (b)      if the Guarantor is not the Successor
                  Corporation, such corporation shall have executed and
                  delivered to each holder of Notes its assumption of the due
                  and punctual performance and observance of each covenant and
                  condition of this Agreement (pursuant to such agreements and
                  instruments as shall be reasonably satisfactory to the
                  Required Holders), and the Guarantor shall have caused to be
                  delivered to each holder of Notes an opinion of nationally
                  recognized independent counsel, to the effect that all
                  agreements or instruments effecting such assumption are
                  enforceable in accordance with their terms and comply with the
                  terms hereof; and

                           (c)      immediately after giving effect to such
                  transaction no Default or Event of Default would exist; and

                                      -22-

<PAGE>

                  (3)      the foregoing restriction does not apply to the
         consolidation or merger of the Company with, or the conveyance,
         transfer or lease of substantially all of the assets of the Company in
         a single transaction or series of transactions to, the Guarantor or a
         Wholly-Owned Restricted Subsidiary in accordance with the terms of
         Section 10.1 of the Note Agreement.

         (b)      The Guarantor will not permit any Restricted Subsidiary to
issue or sell any shares of stock or other equity securities of any class
(including as "stock" for the purposes of this Section 5.5(b), any warrants,
rights or options to purchase or otherwise acquire stock or other securities
exchangeable for or convertible into stock or other equity securities) of such
Restricted Subsidiary to any Person other than the Guarantor or a Wholly-Owned
Restricted Subsidiary, except (i) for the purpose of qualifying directors, (ii)
in satisfaction of the validly pre-existing preemptive or contractual rights of
minority shareholders in connection with the simultaneous issuance of stock to
the Guarantor and/or a Restricted Subsidiary whereby the Guarantor and/or such
Restricted Subsidiary maintain their same proportionate interest in such
Restricted Subsidiary or to the extent required by local law, or (iii) for the
sale or disposition of stock which can be made within the limitations of Section
5.4.

         (c)      The Guarantor will not sell, transfer or otherwise dispose of
any shares of stock or other equity securities of any Restricted Subsidiary
(except to qualify directors), and will not permit any Restricted Subsidiary to
sell, transfer or otherwise dispose of (except to the Guarantor or a
Wholly-Owned Restricted Subsidiary) any shares of stock or other equity
securities of any other Restricted Subsidiary, unless such sale or other
disposition can be made within the limitations of Section 5.4.

         Section 5.6.   Transactions with Affiliates. The Guarantor will not and
will not permit any Restricted Subsidiary to enter into directly or indirectly
any Material transaction or Material group of related transactions with any
Affiliate (other than the Guarantor or another Restricted Subsidiary), except
(a) transactions upon terms no less favorable to the Guarantor or such
Restricted Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate, and (b) transactions with Libbey
Foreign Sales Corporation in a manner consistent with past practices but subject
to modifications based upon then current market conditions and changes in
applicable Laws.

         Section 5.7.   Nature of Business. The Guarantor and its Restricted
Subsidiaries will not engage in any material line of business such that the
businesses of the Company and its Subsidiaries taken as a whole are
substantially different from those lines of business conducted by the Company
and its Subsidiaries on the date hereof and businesses reasonably related
thereto or reasonable extensions thereof.

SECTION 6.           SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
                     AGREEMENT.

         All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by a holder of the Notes of any Note or portion thereof or interest therein and
the payment of any Note, and may be relied upon by any subsequent holder of a
Note, regardless of any investigation made at any time by or

                                      -23-

<PAGE>

on behalf of a holder of the Notes or any other holder of a Note. All statements
contained in any certificate or other instrument delivered by or on behalf of
the Guarantor pursuant to this Agreement shall be deemed representations and
warranties of the Guarantor under this Agreement. Subject to the preceding
sentence, this Agreement embodies the entire agreement and understanding between
the holders of the Notes and the Guarantor and supersedes all prior agreements
and understandings relating to the subject matter hereof.

SECTION 7.           AMENDMENT AND WAIVER.

         Section 7.1.   Requirements. This Agreement may be amended, and the
observance of any term hereof may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Guarantor and
the Required Holders, except that (a) no amendment or waiver of any of the
provisions of Section 2 hereof, or any defined term (as it is used therein),
will be effective as to a holder of the Notes unless consented to by such holder
in writing, and (b) no such amendment or waiver may, without the written consent
of the holder of each Note at the time outstanding affected thereby, (i) change
the percentage of the principal amount of the Notes the holders of which are
required to consent to any such amendment or waiver, or (ii) amend this Section
7, Section 1 or Section 10.

         Section 7.2.   Solicitation of Holders of Notes.

         (a)      Solicitation. The Guarantor will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof. The Guarantor will deliver executed or true and correct copies of each
amendment, waiver or consent effected pursuant to the provisions of this Section
7 to each holder of outstanding Notes promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the requisite
holders of Notes.

         (b)      Payment. The Guarantor will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes of any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
whether or not such holder consented to such waiver or amendment.

         Section 7.3.   Binding Effect, Etc. Any amendment or waiver consented
to as provided in this Section 7 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Guarantor
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the
Guarantor and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note. As used herein, the term "this

                                      -24-

<PAGE>

Agreement" and references thereto shall mean this Agreement as it may from time
to time be amended or supplemented.

         Section 7.4.   Notes Held by Guarantor, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement, or have directed
the taking of any action provided herein to be taken upon the direction of the
holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by the Guarantor or any of
its Affiliates shall be deemed not to be outstanding.

SECTION 8.           NOTICES.

         All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid) or (b) by a recognized overnight delivery service (charges
prepaid). Any such notice must be sent:

                  (i)      if to a holder of the Notes or such holder's nominee,
         to such holder or such holder's nominee at the address specified for
         such communications in Schedule A to the Note Purchase Agreement, or at
         such other address as such holder or it shall have specified to the
         Guarantor in writing, or

                  (ii)     if to the Guarantor, to the Guarantor at its address
         set forth at the beginning hereof to the attention of the Chief
         Financial Officer, or at such other address as the Guarantor shall have
         specified to the holder of each Note in writing.

Notices under this Section 8 will be deemed given on the first Business Day
following the day on which such facsimile or overnight delivery was sent.

SECTION 9.           REPRODUCTION OF DOCUMENTS.

         This Agreement and all documents relating hereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by a holder of the Notes at the Closing (except
the Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to a holder of the Notes, may be
reproduced by such holder by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and such holder may
destroy any original document so reproduced. The Guarantor agrees and stipulates
that, to the extent permitted by applicable law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such
reproduction was made by a holder of the Notes in the regular course of
business) and any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence. This Section 9 shall not
prohibit the Guarantor or any other holder of Notes from contesting any such
reproduction to the same extent that it could

                                      -25-

<PAGE>

contest the original, or from introducing evidence to demonstrate the inaccuracy
of any such reproduction.

SECTION 10.          CONFIDENTIAL INFORMATION.

         For the purposes of this Section 10, "Confidential Information" means
information delivered to any Purchaser by or on behalf of the Guarantor or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement, provided that such term does not include information
that (a) was publicly known or otherwise known to such Purchaser prior to the
time of such disclosure, (b) subsequently becomes publicly known through no act
or omission by such Purchaser or any Person acting on such Purchaser's behalf,
(c) otherwise becomes known to such Purchaser other than through disclosure by
the Guarantor or any Subsidiary or from a Person who is known to such Purchaser
to be bound by a confidentiality agreement with the Guarantor or any of its
Subsidiaries, or is known to such Purchaser to be under an obligation not to
transmit the information to such Purchaser, or (d) constitutes financial
statements delivered to such Purchaser under Section 3.1 that are otherwise
publicly available. Each Purchaser will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by such Purchaser
in good faith to protect confidential information of third parties delivered to
such Purchaser, provided that such Purchaser may deliver or disclose
Confidential Information to (i) such Purchaser's directors, trustees, officers,
employees, agents, attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment represented by such
Purchaser's Notes and to the extent that each such Person is obligated to treat
such information in a confidential manner), (ii) such Purchaser's financial
advisors and other professional advisors who agree to hold confidential the
Confidential Information substantially in accordance with the terms of this
Section 10, (iii) any other holder of any Note, (iv) any Institutional Investor
to which such Purchaser sells or offers to sell such Note or any part thereof or
any participation therein (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions of this
Section 10), (v) any Person from which such Purchaser offers to purchase any
security of the Guarantor (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions of this
Section 10), (vi) any federal or state regulatory authority having jurisdiction
over such Purchaser, (vii) the National Association of Insurance Commissioners
or any similar organization, or any nationally recognized rating agency that
requires access to information about such Purchaser's investment portfolio, or
(viii) any other Person to which such delivery or disclosure may be necessary or
appropriate in each of the following cases: (w) to effect compliance with any
law, rule, regulation or order applicable to such Purchaser, (x) in response to
any subpoena or other legal process, (y) in connection with any litigation to
which such Purchaser is a party or (z) if an Event of Default has occurred and
is continuing, to the extent such Purchaser may reasonably determine such
delivery and disclosure to be necessary or appropriate in the enforcement or for
the protection of the rights and remedies under such Purchaser's Notes and this
Agreement. In the event that any holder receives a request to disclose all or
any part of such information under the terms of a subpoena or order issued by a
court of competent jurisdiction or by a judicial or administrative or
legislative body or committee in connection with disclosure as provided in
clause (viii) above, such holder agrees to use commercially reasonable efforts
to promptly notify the Guarantor (to the extent permitted by applicable law and
to the extent such notice is not in

                                      -26-

<PAGE>

contravention of any order of any court or Governmental Authority) of the
existence, terms and circumstances surrounding such request. Each holder of a
Note, by its acceptance of a Note, will be deemed to have agreed to be bound by
and to be entitled to the benefits of this Section 10 as though it were a party
to this Agreement. On reasonable request by the Guarantor in connection with the
delivery to any holder of a Note of information required to be delivered to such
holder under this Agreement or requested by such holder (other than a holder
that is a party to this Agreement or its nominee), such holder will, as a
condition precedent to receiving such information, enter into an agreement with
the Guarantor embodying the provisions of this Section 10.

SECTION 11.          SUBMISSION TO JURISDICTION.

         The Guarantor hereby irrevocably consents and submits to the
jurisdiction of any court located within the State of New York sitting in the
County of New York and the United States District Court for the Southern
District of New York and irrevocably agrees that all actions or proceedings
relating to this Agreement may be litigated in such courts, and the Guarantor
irrevocably waives any objection which it may have based on improper venue or
forum non conveniens to the conduct of any proceeding in any such court. The
Guarantor hereby consents that all such service of process be made by mail or
messenger directed to it at the address of the Guarantor described in Section 8
and that service so made shall be deemed to be completed upon the earlier of
actual receipt or three Business Days after the same shall have been posted to
the Guarantor's or such agent's address, as the case may be, in accordance
herewith. Nothing contained in this Section 11 shall affect the right of any
holder of Notes to serve legal process in any other manner permitted by law or
to bring any action or proceeding in the courts of any jurisdiction against the
Guarantor or to enforce a judgment obtained in the courts of any other
jurisdiction.

SECTION 12.          MISCELLANEOUS.

         Section 12.1.  Successors and Assigns. All covenants and other
agreements contained in this Agreement by or on behalf of any of the parties
hereto bind and inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent holder of a Note) whether so
expressed or not.

         Section 12.2.  Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.

         Section 12.3.  Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.

                                      -27-

<PAGE>

         Section 12.4   Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.

         Section 12.5.  Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of New York excluding choice-of-law principles of the law
of such State that would require the application of the laws of a jurisdiction
other than such State.

                                    * * * * *

                                      -28-

<PAGE>

         If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Guarantor, whereupon the foregoing shall become a binding agreement between you
and the Guarantor.

                                  Very truly yours,

                                  LIBBEY INC.

                                     By:      /s/   Kenneth A. Boerger
                                     ----------------------------------
                                     Name: Kenneth A. Boerger
                                     Title: Vice President and Treasurer

                                      -29-

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