Waiver and Second Amendment to Parent Guaranty Agreement
Dated as of September 30, 2005
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Parent Guaranty Agreement dated as
of March 31, 2003,
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Note Purchase Agreement dated as of
March 31, 2003
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and
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$25,000,000 3.69% Senior Notes,
Series 2003A-1, due March 31, 2008
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$55,000,000 5.08% Senior Notes,
Series 2003A-2, due March 31, 2013
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$20,000,000 Floating Rate Senior
Notes, Series 2003B, due March 31, 2010
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Waiver and Second Amendment to Parent Guaranty
Agreement
Dated as of September 30, 2005
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Parent Guaranty Agreement dated as
of March 31, 2003,
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Note Purchase Agreement dated as of
March 31, 2003
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and
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$25,000,000 3.69% Senior Notes,
Series 2003A-1, due March 31, 2008
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$55,000,000 5.08% Senior Notes,
Series 2003A-2, due March 31, 2013
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$20,000,000 Floating Rate Senior
Notes, Series 2003B, due March 31, 2010
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To the institutional investors (the
“Noteholders” )
Named in Schedule I attached hereto
Reference is made to the Parent
Guaranty Agreement dated as of March 31, 2003, as amended to
date (the “Guaranty Agreement” ) between Libbey
Inc., a Delaware corporation (the “Guarantor” ),
and each of the institutional investors party thereto, pursuant to
which the Guarantor has guaranteed the obligations of Libbey Glass
Inc., a Delaware corporation (the “Company” ),
under the Note Purchase Agreement dated as of March 31, 2003
(the “Note Purchase Agreement” ) between the
Company and the institutional investors party thereto, under and
pursuant to which the Company originally issued and sold its 3.69%
Senior Notes, Series 2003A-1, due March 31, 2008 in an
aggregate principal amount of $25,000,000 (the
“Series A-1 Notes” ), 5.08% Senior Notes,
Series 2003A-2, due March 31, 2013 in an aggregate
principal amount of $55,000,000 (the “Series A-2
Notes” ), and Floating Rate Senior Notes,
Series 2003B, due March 31, 2010 in an aggregate
principal amount of $20,000,000 (the “Series 2003B
Notes,” and together with the Series A-1 Notes and
the Series A-2 Notes, the “Notes” ). Terms
used but not otherwise defined herein shall have the same meaning
as ascribed to such terms in the Guaranty Agreement.
The Guarantor hereby agrees with you
in this Waiver and Second Amendment to Parent Guaranty Agreement
(this or the “Second Amendment” ) as
follows:
Section 1.1. Waiver of
Section 5.1(a) (Limitation on Debt). Compliance by the
Guarantor with Section 5.1(a) of the Guaranty Agreement is
hereby waived for the period
beginning September 30, 2005 and ending December 31,
2005, provided that (i) the Consolidated Leverage Ratio for
the period ending September 30, 2005 shall not exceed 4.25 to
1.00, and (ii) the Guarantor and its Restricted Subsidiaries shall
not incur any Debt during such period from the date of this Second
Amendment through December 31, 2005, other than (A) Debt
incurred under the Bank Credit Agreement not to exceed at any time
$195,000,000 in an aggregate principal amount outstanding,
(B) Debt incurred pursuant to a Euro working capital facility
not to exceed at any time 10,000,000 Euros in an aggregate
principal amount outstanding, (C) Debt incurred pursuant to a
working capital facility not to exceed at any time $10,000,000 in
an aggregate principal amount outstanding, (D) a Guaranty of
Debt of Libbey Glassware (China) Co., Ltd. relating to a
construction facility not to exceed at any time $30,000,000 (or the
equivalent amount in foreign currency) in an aggregate principal
amount outstanding and (E) other Debt not to exceed at any
time $1,000,000 in an aggregate amount outstanding.
Section 1.2. Limited Waiver;
Reservation of Rights. The Guarantor acknowledges and agrees
that the waiver granted in Section 1.1 is valid only for the
specific purpose for which it is being given and shall not in any
way obligate any Noteholder to agree to any additional waivers of
the provisions of the Guaranty Agreement or the Note Purchase
Agreement, and shall not constitute or operate as a waiver of any
Noteholder’s rights under the Note Purchase Agreement to
exercise remedies resulting from any Default or Event of Default
which may now exist or which may occur in the future.
Section 1.3. Amendment to
Section 5.3 of Guaranty Agreement. Section 5.3 of the
Guaranty Agreement shall be amended by adding the following proviso
at the end of subparagraph (m) thereof:
“provided, further, that
(i) no Liens shall be created, incurred or assumed under this
Section 5.3(m) if, at such time or after giving effect
thereto, any Default or Event of Default shall have occurred and be
continuing, and (ii) from the date of September___, 2005
through December 31, 2005, the Guarantor will not and will not
permit any of its Restricted Subsidiaries to create, incur or
assume any Liens under this subsection (m) securing Debt in
excess of $1,000,000”.
Section 1.4. Amendment to
Section 5 of Guaranty Agreement. Section 5 of the
Guaranty Agreement shall be the addition of a new Section 5.8
that shall read as follows:
Section 5.8. Notes and Guaranty Agreement to Rank Pari
Passu. The Notes and all other obligations under the Note
Purchase Agreement and this Guaranty Agreement are and at all times
shall remain direct and unsecured obligations of the Company and
the Guarantor, respectively, ranking pari passu with all
Debt outstanding under the Bank Credit Agreement and all other
present and future unsecured Debt (actual or contingent) of the
Company and the Guarantor which is not expressed to be
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subordinate or junior in rank to any other unsecured Debt of the
Company or the Guarantor.
Representations and Warranties.
The Guarantor represents and warrants
that as of the date hereof and after giving effect
hereto:
(a) The execution and delivery of the
Waiver by the Guarantor and compliance by the Guarantor with all of
the provisions of the Guaranty Agreement as amended by this Second
Amendment —
(i) are within the corporate power
and authority of the Guarantor; and
(ii) will not violate any provisions
of any law or any order of any court or governmental authority or
agency and will not conflict with or result in any breach of any of
the terms, conditions or provisions of, or constitute a default
under the certificate of incorporation or by-laws of the Guarantor,
or any indenture or other agreement or instrument to which the
Guarantor is party or by which the Guarantor may be bound or result
in the imposition of any Liens or encumbrances on any property of
the Guarantor.
(b) The execution and delivery of the
Waiver has been duly authorized by all necessary corporate action
on the part of the Guarantor; and the Waiver has been duly executed
and delivered by the Guarantor, and the Guaranty Agreement,
constitutes the legal, valid and binding obligation, contract and
agreement of the Guarantor enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and similar laws affecting
creditors’ rights generally, and general principles of equity
(regardless of whether the application of such principles is
considered in a proceeding in equity or at law).
(c) Upon the effectiveness of this
Second Amendment and that certain Amendment No. 2 and Waiver
to Credit Agreement, dated as of September 30, 2005 (the
“Credit Agreement Waiver” ), in respect of the
Credit Agreement dated as of June 24, 2004 (as amended,
modified or waived as of the date hereof, the “Bank
Cred
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