____________________________________________________________________________

DONNELLY CORPORATION

NOTE AGREEMENT

Dated as of May 15, 2002

$30,000,000
7.60% Senior Notes
Due May 2, 2012

____________________________________________________________________________

PPN: 257870 C@2

____________________________________________________________________________

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TABLE OF CONTENTS

 

 

 

PAGE

1.

DESCRIPTION OF NOTES AND COMMITMENT

1

 

1.1.

Description of Notes

1

 

1.2.

Commitment; Closing Date

1

 

 

 

 

2.

PREPAYMENT OF NOTES

2

 

2.1.

Required Prepayments

2

 

2.2.

Optional Prepayments

2

 

2.3.

Notice of Prepayments

2

 

2.4.

Surrender of Notes on Prepayment or Exchange

3

 

2.5.

Direct Payment and Deemed Date of Receipt

3

 

2.6.

Allocation of Payments

3

 

2.7.

Payments Due on Saturdays, Sundays and Holidays

3

 

 

 

 

3.

REPRESENTATIONS

3

 

3.1.

Representations of the Company

3

 

3.2.

Representations of the Purchasers

9

 

 

 

 

4.

CLOSING CONDITIONS

11

 

4.1.

Representations and Warranties

11

 

4.2.

Legal Opinions

11

 

4.3.

Events of Default

11

 

4.4.

Payment of Fees and Expenses

11

 

4.5.

Legality of Investment

11

 

4.6.

Private Placement Number

12

 

4.7.

Proceedings and Documents

12

 

 

 

 

5.

INTERPRETATION OF AGREEMENT

12

 

5.1.

Certain Terms Defined

12

 

5.2.

Accounting Principles

20

 

5.3.

Valuation Principles

20

 

5.4.

Direct or Indirect Actions

20

 

 

 

 

6.

AFFIRMATIVE COVENANTS

20

 

6.1.

Corporate Existence

20

 

6.2.

Insurance

20

 

6.3.

Taxes, Claims for Labor and Materials

21

 

6.4.

Maintenance of Properties

21

 

6.5.

Maintenance of Records

21

 

6.6.

Financial Information and Reports

21

 

6.7.

Inspection of Properties and Records

23

 

6.8.

ERISA

23

 

6.9.

Compliance with Laws

24

 

6.10.

Acquisition of Notes

25

 

6.11.

Private Placement Number

25

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6.12.

Parity

25

 

 

 

 

7.

NEGATIVE COVENANTS

26

 

7.1.

Debt to EBITDA Ratio

26

 

7.2.

Priority Debt

26

 

7.3.

Interest Coverage Ratio

26

 

7.4.

Consolidated Tangible Net Worth

26

 

7.5.

Indebtedness

26

 

7.6.

Liens

27

 

7.7.

Restricted Payments

28

 

7.8.

Investments

29

 

7.9.

Joint Ventures

29

 

7.10.

Sale and Leaseback Transactions

29

 

7.11.

Merger or Consolidation

30

 

7.12

Sale of Assets

30

 

7.13.

Disposition of Stock or Indebtedness of Subsidiaries

31

 

7.14.

Transactions with Affiliates

31

 

7.15.

Consolidated Tax Returns

31

 

7.16.

Nature of Business

31

 

 

 

 

8.

EVENTS OF DEFAULT AND REMEDIES THEREFOR

31

 

8.1.

Nature of Events

31

 

8.2.

Remedies on Default

33

 

8.3.

Annulment of Acceleration of Notes

33

 

8.4.

Other Remedies

34

 

8.5.

Conduct No Waiver; Collection Expenses

34

 

8.6.

Remedies Cumulative

34

 

8.7.

Notice of Default

34

 

 

 

 

9.

AMENDMENTS, WAIVERS AND CONSENTS

35

 

9.1.

Matters Subject to Modification

35

 

9.2.

Solicitation of Holders of Notes

35

 

9.3.

Binding Effect

35

 

 

 

 

10.

FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT

35

 

10.1.

Form of Notes

35

 

10.2.

Note Register

36

 

10.3.

Issuance of New Notes upon Exchange or Transfer

36

 

10.4

Replacement of Notes

36

 

 

 

 

11.

MISCELLANEOUS

36

 

11.1.

Expenses

36

 

11.2.

Notices

37

 

11.3.

Reproduction of Documents

37

 

11.4.

Successors and Assigns

37

 

11.5.

Laws Governing

37

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11.6.

Headings

37

 

11.7.

Counterparts

37

 

11.8.

Reliance on and Survival of Provisions

38

 

11.9.

Integration and Severability

38

 

SCHEDULE I

-

Information Relating to Purchasers

 

 

 

ANNEXES

 

 

I

-

Required Prepayments

II

-

List of Subsidiaries and Joint Ventures and Jurisdictions in which

 

 

the Company, Subsidiaries and Joint Ventures are Organized and

 

 

Qualified to do Business

III

-

Liens

IV

-

Litigation

V

-

Indebtedness

VI

-

Priority Debt

 

 

 

EXHIBITS

 

 

A

-

Form of Senior Note

B

-

Form of Legal Opinion of the Purchasers' Special Counsel

C

-

Form of Legal Opinion of the Company's Counsel

 

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DONNELLY CORPORATION

NOTE AGREEMENT

 

Dated as of May 15, 2002

 

To Each of the Purchasers

Named in the Attached Schedule I

Ladies and Gentlemen:

DONNELLY CORPORATION, a Michigan corporation (the "Company"), agrees with you as
follows:

DESCRIPTION OF NOTES AND COMMITMENT

Description of Notes

. The Company has authorized the issuance and sale of $30,000,000 aggregate
principal amount of its 7.60% Senior Notes due May 2, 2012 (the "Notes"), to be
dated the date of issuance, to bear interest from such date (computed on the
basis of a 360-day year comprised of twelve 30-day months), payable
semi-annually on May 2 and November 2 of each year, commencing November 2, 2002,
and at maturity, at the rates specified above prior to maturity and to bear
interest on any overdue principal (including any overdue optional or required
prepayment), on any overdue

Make-Whole Amount (to the extent legally enforceable), and on any overdue
installment of interest (to the extent legally enforceable) at the rate of 9.60%
per annum. The Notes shall be substantially in the form attached as Exhibit A.
The term "Notes" as used herein shall include each Note delivered pursuant to
this Note Agreement (the "Agreement") and each Note delivered in substitution or
exchange therefor and, where applicable, shall include the singular number as
well as the plural. Any reference to you in this Agreement shall in all
instances be deemed to include any nominee of yours or any separate account or
other person on whose behalf you are purchasing Notes. You are sometimes
referred to herein as the "Purchasers."

Commitment; Closing Date

. Subject to the terms and conditions of this Agreement and on the basis of the
representations and warranties hereinafter set forth, the Company agrees to
issue and sell to you, and you agree to purchase from the Company, all of the
Notes at a price of 100% of the principal amount thereof.

Delivery of and payment for the Notes shall be made at the offices of Gardner,
Carton & Douglas, 321 N. Clark Street, Chicago, Illinois 60610, at 9:00 a.m.,
Chicago Time on May 15, 2002, or such other time on such earlier or later date,
not later than 4 p.m., Chicago Time on May 15, 2002 as you and the Company may
mutually agree (the "Closing Date"). The Notes shall be delivered to you in the
form of one or more Notes in fully registered form, issued in your name or in
the name of your nominee. Delivery of the Notes to you on the Closing Date shall
be against payment of the purchase price thereof in Federal funds or other funds
in U.S. dollars immediately available at Bank One, 611 Woodward Avenue, Detroit,
Michigan 48226, ABA No.

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072000326, for deposit in the Company's account, Account No. 1071483. If on the
Closing Date the Company shall fail to tender the Notes to you, you shall be
relieved of all remaining obligations under this Agreement. Nothing in the
preceding sentence shall relieve the Company of any liability occasioned by such
failure to deliver the Notes.

PREPAYMENT OF NOTES

Required Prepayments.

In addition to payment of all outstanding principal of the Notes at maturity and
regardless of the amount of Notes that may be outstanding from time to time, the
Company shall prepay principal on the Notes as set forth on Annex I attached
hereto (together with accrued and unpaid interest thereon in accordance with
Annex I and the Notes) without a Make-Whole Amount or premium, provided that
upon any partial prepayment of the Notes pursuant to Section 2.2, the principal
amount of each prepayment of the Notes coming due under this Section 2.1 on and
after the date of such prepayment shall be reduced in the same proportion as the
aggregate unpaid principal amount of the Notes is reduced as a result of such
prepayment.

Optional Prepayments

.

Upon notice as provided in Section 2.3(a) and (b), the Company may prepay the
Notes, in whole or in part, at any time or times, in an amount not less than
$100,000, an integral multiple of $100,000 in excess thereof or such lesser
amount as shall constitute payment in full of the Notes. Each such prepayment
shall be at a price of 100% of the principal amount to be prepaid, plus interest
accrued thereon to the date of prepayment, plus the Make-Whole Amount.

Except as provided in Section 2.1, this Section 2.2 or Section 7.12, the Notes
shall not be prepayable in whole or in part.

Notice of Prepayments

.

The Company shall give notice of any optional prepayment of the Notes pursuant
to Section 2.2(a) to each holder of the Notes not less than 30 days nor more
than 60 days before the date fixed for prepayment, specifying (i) such date,
(ii) the principal amount of the holder's Notes to be prepaid on such date,
(iii) the Determination Date for calculating the Make-Whole Amount, and (iv) the
accrued interest applicable to the prepayment. Notice of prepayment having been
so given, the aggregate principal amount of the Notes specified in such notice,
together with the actual Make-Whole Amount, if any, and accrued interest thereon
shall become due and payable on the prepayment date.

In the case of any optional prepayment pursuant to Section 2.2(a) the Company
also shall give notice to each holder of the Notes by telecopy, telegram, telex
or other same-day written communication, 3 Business Days prior to the prepayment
date, of the Make-Whole Amount applicable to such prepayment and the details of
the calculations used to determine the amount of such Make-Whole Amount.

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Surrender of Notes on Prepayment or Exchange

. Subject to Section 2.5, upon any partial prepayment of a Note pursuant to this
Section 2 or partial exchange of a Note pursuant to Section 10.3, such Note may,
at the option of the holder thereof, (i) be surrendered to the Company pursuant
to Section 10.3 in exchange for a new Note or Notes equal to the principal
amount remaining unpaid on the surrendered Note, or (ii) be made available to
the Company, at the Company's principal office, for notation thereon of the
portion of the principal so prepaid or exchanged. In case the entire principal
amount of any Note is prepaid or exchanged, such Note shall be surrendered to
the Company following such prepayment for cancellation and shall not be
reissued, and no Note shall be issued in lieu of such Note.

Direct Payment and Deemed Date of Receipt

. Notwithstanding any other provision contained in the Notes or this Agreement,
the Company will pay all sums becoming due on each Note held by you or any
subsequent Institutional Holder by wire transfer of immediately available funds
to such account as you have designated in Schedule I, or as you or such
subsequent Institutional Holder may otherwise designate by notice to the
Company, in each case without presentment and without notations being made
thereon, except that any such Note so paid or prepaid in full shall be
surrendered to the Company for cancellation. Any wire transfer shall identify
such payment in the manner set forth in Schedule I and shall identify the
payment as principal, Make-Whole Amount, if any, and/or interest. You and any
subsequent Institutional Holder of a Note to which this Section 2.5 applies
agree that, before selling or otherwise transferring any such Note, you or it
will make a notation thereon of the aggregate amount of all payments of
principal theretofore made and of the date to which interest has been paid and,
upon written request of the Company, will provide a copy of such notations to
the Company. You will notify the Company if you sell or otherwise transfer a
Note. Any payment made pursuant to this Section 2.5 shall be deemed received on
the payment date only if received before 10:00 A.M., Chicago time. Payments
received after 10:00 A.M., Chicago time, shall be deemed received on the next
succeeding Business Day.

Allocation of Payments

. In the case of a prepayment pursuant to Section 2.1 or 2.2(a), if less than
the entire principal amount of all of the Notes outstanding is to be paid, the
Company will prorate the aggregate principal amount to be prepaid among the
outstanding Notes in proportion to the unpaid principal amounts thereof.

Payments Due on Saturdays, Sundays and Holidays

. If any interest payment date on the Notes or the date fixed for any other
payment of any Note or exchange of any Note is a Saturday, Sunday or a legal
holiday or a day on which banking institutions in the United States of America
generally are authorized by law to close, then such payment or exchange need not
be made on such date but may be made on the next succeeding Business Day which
is not a Saturday, Sunday or a legal holiday or a day on which banking
institutions in the United States of America generally are authorized by law to
close, with the same force and effect as if made on the due date.

REPRESENTATIONS

Representations of the Company

. As an inducement to, and as part of the consideration for, your purchase of
the Notes pursuant to this Agreement, the Company represents and warrants to you
as follows:

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Corporate Organization and Authority

. The Company is a solvent corporation duly organized, validly existing and in
good standing under the laws of the State of Michigan. The Company has all
requisite corporate power and authority to own and operate its properties, to
carry on its business as now conducted and as presently proposed to be
conducted, to enter into and perform the Agreement and to issue and sell the
Notes as contemplated in this Agreement.

Qualification to Do Business

. The Company is duly qualified or licensed and in good standing as a foreign
corporation authorized to do business in each jurisdiction where the nature of
the business transacted by it or the character of its properties owned or leased
makes such qualification or licensing necessary. A list of those jurisdictions
wherein the Company is qualified to do business is attached as
Annex II
.

Subsidiaries

. The Company has no Subsidiaries or Joint Ventures, as defined in Section 5.1,
except those listed in the attached
Annex II
, which correctly sets forth the percentage of the outstanding Voting Stock of
each Subsidiary or percentage of ownership interest in each Joint Venture which
is owned, of record or beneficially, by the Company and/or one or more
Subsidiaries. Each Subsidiary and Joint Venture has been duly organized and is
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization and is duly licensed or qualified and in good
standing as a foreign corporation or other organization in each other
jurisdiction where the nature of the business transacted by it or the character
of its properties owned or leased makes such qualification or licensing
necessary. A list of the jurisdiction of incorporation or organization of each
Subsidiary and Joint Venture is set forth in
Annex II
. Each Subsidiary and each Joint Venture has full corporate or other power and
authority to own and operate its properties and to carry on its business as now
conducted and as presently proposed to be conducted. The Company and/or one or
more Subsidiaries have good and marketable title to all of the shares they
purport to own of the capital stock of each Subsidiary and each Joint Venture or
to all of the ownership interests they purport to own in each Joint Venture,
free and clear in each case of any Lien, except as otherwise disclosed in the
attached
Annex II
, and all such shares or ownership interests have been duly issued and are fully
paid and nonassessable, except as disclosed in
Annex II
.

Financial Statements

. The combined consolidated balance sheets of the Company and its Subsidiaries,
and any restatements thereof, as of December 31, 2001, December 31, 2000,
December 31, 1999, July 3, 1999 and June 27, 1998, and the related combined
consolidated statements of income, shareholders' equity and cash flows for each
of the fiscal years or transition period ended on such dates, accompanied by the
reports and unqualified opinions of BDO Seidman, LLP, independent public
accountants, copies of which will be or have heretofore been delivered to you,
will be or were prepared in accordance with GAAP consistently applied throughout
the periods involved (except as otherwise noted therein) and present fairly the
combined consolidated financial position of the Company and its Subsidiaries on
such dates and their combined consolidated results of operations and cash flows
for the years or transition period then ended.

No Contingent Liabilities or Adverse Changes

. Neither the Company nor any of its Subsidiaries or Joint Ventures has any
contingent liabilities which, individually or in the aggregate, are material to
the Company, to any of its Subsidiaries or to any of its Joint Ventures,

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other than as indicated in the most recent audited financial statements
described in the foregoing paragraph (d) of this Section 3.1, and, except as set
forth in such financial statements, since December 31, 2001 there have been no
changes in the condition, financial or otherwise, of the Company, its
Subsidiaries and its Joint Ventures except changes occurring in the ordinary
course of business, none of which, individually or in the aggregate, have had or
will have a Material Adverse Effect.

Pending Litigation or Proceedings

. Except as set forth in
Annex IV
, there are no actions, suits or proceedings at law or in equity or before or by
any Federal, state, municipal or other governmental department, commission,
board, bureau, administrative instrumentality or other agency, domestic or
foreign, pending or, to the knowledge of the Company, threatened in writing
against or affecting the Company, any Subsidiary or any Joint Venture, which are
reasonably likely to result, individually or in the aggregate, in a Material
Adverse Effect.

Compliance with Law.

Neither the Company nor any Subsidiary nor any Joint Venture has received any
notice, not heretofore complied with, from any federal, state or local authority
or any insurance or inspection body to the effect, and neither the Company nor
any Subsidiary has knowledge, that any of the properties, Facilities, equipment
or business procedures or practices of the Company, any Subsidiary or any Joint
Venture fail to comply with any applicable law, ordinance, regulation, building
or zoning law, or any other requirements of any such authority or body, which
noncompliance could have, individually or in the aggregate, a Material Adverse
Effect.

Neither the Company nor any Subsidiary nor any Affiliate of the Company is an
entity defined as a "designated national" within the meaning of the Foreign
Assets Control Regulations, 31 C.F.R. Chapter V, or is in violation of any
Federal statute or Presidential Executive Order, or any rules or regulations of
any department, agency or administrative body promulgated under any such statute
or Order, concerning trade or other relations with any foreign country or any
citizen or national thereof or the ownership or operation of any property and no
restriction or prohibition under any such statute, Order, rule or regulation has
a Material Adverse Effect.

ERISA

.

The Company 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 Company nor any ERISA Affiliate has
incurred any liability (other than benefit liabilities as defined in Section
3.1(h)(ii)) 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 Company or any ERISA Affiliate, or in the imposition of any Lien on any
of the rights, properties or assets of the Company 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.

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 for the
most recent Plan year is $49,600,000 and the aggregate current value of the
assets of such Plan is $63,800,000. The term "benefit liabilities" has the
meaning specified in section 4001 of ERISA and the terms "current value" and
"present value" have the meaning specified in section 3 of ERISA.

The Company 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.

The expected postretirement benefit obligation (determined as of the last day of
the Company'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 Company and its Subsidiaries, is $18,830,000.

The execution and delivery of this Agreement and the issuance and sale of the
Notes hereunder 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 Company in the first sentence of this clause (v) is made in reliance upon
and subject to the accuracy of your representation in Section 3.2(b) as to the
sources of the funds used to pay the purchase price of the Notes to be purchased
by you.

Title to Properties

. Except as disclosed on the most recent audited consolidated balance sheet
described in the foregoing paragraph (d) of this Section 3.1, the Company and
each Subsidiary has (i) good title in fee simple or its equivalent under
applicable law to all the real property owned by it and (ii) good title to all
of the other property reflected in such balance sheet or subsequently acquired
by the Company or any Subsidiary (except as sold or otherwise disposed of in the
ordinary course of business), in each case free from all Liens or defects in
title except those permitted by Section 7.6.

Leases

. The Company and each Subsidiary enjoy peaceful and undisturbed possession
under all leases under which the Company or such Subsidiary is a lessee or is
operating. None of such leases contains any provision which might materially and
adversely affect the operation or use of the property so leased. All of such
leases are valid and subsisting and neither the Company or any Subsidiary nor
any third party is in default under any of such leases.

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

Franchises, Patents, Trademarks and Other Rights

. The Company and each Subsidiary have all franchises, permits, licenses and
other authority necessary to carry on, or used in, their businesses as now being
conducted and as proposed to be conducted, and neither the Company nor any
Subsidiary is in default under any of such franchises, permits, licenses or
other authority except for franchises, permits, licenses or other authority, the
lack or loss of which, and defaults, which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect. The Company
and each Subsidiary own or possess all patents, trademarks, service marks, trade
names, copyrights, licenses and rights with respect to the foregoing necessary
for, or used by them in, the present conduct of their businesses, without any
known conflict with the rights of others which could have, individually or in
the aggregate, a Material Adverse Effect.

Authorization

. This Agreement and the Notes have been duly authorized on the part of the
Company and the Agreement does, and the Notes when issued will, constitute the
legal, valid and binding obligations of the Company, enforceable in accordance
with their terms, except to the extent that enforcement of the Notes may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application relating to or affecting the enforcement of
the rights of creditors or by equitable principles, regardless of whether
enforcement is sought in equity or at law. The sale of the Notes, the execution
and delivery of the Agreement and compliance by the Company with all of the
provisions of this Agreement and the Notes (i) are within the Company's
corporate powers, (ii) have been duly authorized by proper corporate action,
(iii) are legal and will not violate any provisions of any law or regulation or
order of any court, governmental authority or agency and (iv) will not result in
any breach of any of the provisions of, or constitute a default under, or result
in the creation of any Lien on any property of the Company or any Subsidiary
under the provisions of, any charter document, by-law, loan agreement or other
agreement or instrument to which the Company or any Subsidiary is a party or by
which any of them or their property is bound.

No Defaults

. No event has occurred and no condition exists which, upon the issuance of the
Notes, would constitute a Default or an Event of Default under this Agreement.
Neither the Company nor any Subsidiary is in default under any charter document,
by-law, loan agreement or other agreement or instrument to which it is a party
or by which it or its property is bound.

Governmental Consent

. None of the nature of the Company or any of its Subsidiaries, their respective
businesses or properties, any relationship between the Company or any of its
Subsidiaries and any other Person, or any circumstances relative to the offer,
issuance, sale or delivery of the Notes or execution and delivery of this
Agreement is such as to require a consent, approval or authorization of, or
withholding of objection on the part of, or filing, registration or
qualification with, any governmental authority on the part of the Company in
connection with the execution and delivery of this Agreement, or the offer,
issuance, sale or delivery of the Notes.

Taxes

. All tax returns required to be filed by the Company or any Subsidiary in any
jurisdiction have been filed, and all taxes, assessments, fees and other
governmental charges upon the Company or any Subsidiary, or upon any of their
respective properties, income or franchises, which are due and payable, have
been paid timely or within appropriate extension

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

periods or contested in good faith by appropriate proceedings that stay the
collection thereof by the applicable governmental authority during the period of
the contest and as to which adequate reserves are maintained in accordance with
GAAP. The Federal income tax liability of the Company and its Subsidiaries has
been finally determined by the Internal Revenue Service and satisfied for all
taxable years up to and including the taxable year ended June 30, 1996, and no
material controversy in respect of additional taxes due since such date is
pending or, to the Company's knowledge, threatened. The provisions for taxes on
the books of the Company and each Subsidiary are adequate for all open years and
for the current fiscal period.

Status under Certain Statutes

. Neither the Company nor any Subsidiary is: (i) a "public utility company" or a
"holding company," or an "affiliate" or a "subsidiary company" of a "holding
company," or an "affiliate" of such a "subsidiary company," as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended, or (ii) a
"public utility" as defined in the Federal Power Act, as amended, or (iii) an
"investment company" or an "affiliated person" thereof, as such terms are
defined in the Investment Company Act of 1940, as amended.

Private Offering

. The Company has not authorized or employed any Person as agent, broker, dealer
or otherwise in connection with the offering of the Notes or any similar
security of the Company, and the Company has not offered any of the Notes or any
similar security of the Company for sale to, or solicited offers to buy any
thereof from, or otherwise approached or negotiated with respect thereto with,
any prospective purchaser, other than institutional investors, including the
Purchasers, each of whom was offered all or a portion of the Notes at private
sale for investment. Neither the Company nor anyone acting on its authorization
will offer the Notes, or any part thereof or any similar security for issuance
or sale to, or solicit any offer to acquire any of the same from, anyone so as
to bring the issuance and sale of the Notes within the provisions of Section 5
of the Securities Act.

Effect of Other Instruments

. Neither the Company nor any Subsidiary is bound by any agreement or instrument
or subject to any charter or other corporate restriction which (i) in any way
specifically restricts the Company's ability to perform its obligations under
this Agreement or the Notes or any Subsidiary's ability to pay dividends or make
advances to the Company or (ii) has a Material Adverse Effect.

Use of Proceeds

. The Company will apply the net proceeds from the sale of the Notes to
refinance existing Indebtedness and for general corporate purposes. None of the
transactions contemplated in this Agreement (including, without limitation
thereof, the use of the proceeds from the sale of the Notes) will violate or
result in a violation of Section 7 of the Exchange Act, or any regulations
issued pursuant thereto, including, without limitation, Regulations T, U and X
of the Board of Governors of the Federal Reserve System (12 C.F.R., Chapter II).
None of the proceeds from the sale of the Notes will be used to purchase or
carry or refinance any borrowing the proceeds of which were used to purchase or
carry any "margin stock" or "margin security" in violation of Regulations T, U
or X.

Condition of Property

. All of the facilities of the Company and each of its Subsidiaries are in sound
operating condition and repair, except for facilities being repaired in the
ordinary course of business.

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Books and Records

. The Company and each Subsidiary (i) maintain books, records and accounts in
reasonable detail which accurately and fairly reflect their respective
transactions and business affairs, and (ii) maintain a system of internal
accounting controls sufficient to provide reasonable assurances that
transactions are executed in accordance with management's general or specific
authorization and to permit preparation of financial statements in accordance
with GAAP.

Environmental Compliance

. The Company and each Subsidiary (including their operations and the conditions
at or in their Facilities) comply with all Environmental Laws except for
violations which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect; the Company and each Subsidiary have
obtained all permits under Environmental Laws necessary to their respective
operations, all such permits are in full force and effect, and the Company and
each Subsidiary are in compliance with all material terms and conditions of such
permits except for permits, individually or in the aggregate, the lack of which
or noncompliance with which could not reasonably be expected to have a Material
Adverse Effect; and neither the Company nor any of its Subsidiaries has any
liability (contingent or otherwise) in connection with any Release of any
Hazardous Material or the existence of any Hazardous Material on, under or about
any Facility that could give rise to an Environmental Claim that could
reasonably be expected to have a Material Adverse Effect.

Full Disclosure

. Neither the financial statements referred to in paragraph (d) of this
Section 3.1, nor this Agreement, nor any other written statement or document
furnished by or on behalf of the Company to you in connection with the
negotiation of the sale of the Notes and the execution and delivery of the
Agreement, taken together, contain any untrue statement of a material fact or
omit a material fact necessary to make the statements contained therein or
herein not misleading in light of the circumstances under which they were made.
There is no fact (exclusive of general economic, political or social conditions
or trends) particular to the Company and known by the Company that the Company
has not disclosed to you in writing and that has a Material Adverse Effect or,
so far as the Company can now foresee, will have, individually or in the
aggregate, a Material Adverse Effect, or will restrict the Company's performance
of its undertakings under this Agreement and the Notes.

Representations of the Purchasers

.

You represent, and in entering into this Agreement the Company understands, that
you are acquiring the Notes for your own account and not with a view to any
distribution thereof, provided that the disposition of your property shall at
all times be and remain within your control; subject, however, to compliance
with Federal securities laws. You acknowledge that the Notes have not been
registered under the Securities Act and you understand and agree that the Notes
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. You have
been advised that the Company does not contemplate registering, and is not
legally required to register, the Notes under the Securities Act.

You further represent that, as of the date of this Agreement, at least one of
the following statements is an accurate representation as to each source of
funds (a "Source") to be used by you to pay the purchase price of the Notes to
be purchased by you hereunder:

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the Source is an "insurance company general account" as such term is defined in
the Department of Labor Prohibited Transaction Exemption ("PTE") 95-60 (issued
July 12, 1995) ("PTE 95-60") and as of the date of this Agreement there is no
"employee benefit plan" with respect to which the aggregate amount of such
general account's reserves and liabilities for the contracts held by or on
behalf of such employee benefit plan and all other employee benefit plans
maintained by the same employer (and affiliates thereof as defined in Section
V(a)(1) of PTE 95-60) or by the same employee organization (in each case
determined in accordance with the provisions of PTE 95-60) exceeds 10% of the
total reserves and liabilities of such general account (as determined under PTE
95-60) (exclusive of separate account liabilities) plus surplus as set forth in
the National Association of Insurance Commissioners Annual Statement filed with
your state of domicile;

the Source is either (x) an insurance company pooled separate account, within
the meaning of PTE 90-1 (issued January 29, 1990), or (y) a bank collective
investment fund, within the meaning of the PTE 91-38 (issued July 12, 1991) and,
except as you have disclosed to the Company in writing pursuant to this
paragraph (ii), 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;

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" 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 clause (iii);

the Source is a governmental plan;

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 (b)(v);

the Source does not include assets of any employee benefit plan, other than a
plan exempt from the coverage of ERISA; or

if you are an insurance company and the Source includes assets of your general
account, (A) your purchase of Notes is entitled to the exemption afforded by

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PTE 95-60 (issued July 12, 1995), provided the Company is not an affiliate
(within the meaning of Section v(a) of PTE 95-60) of you, or (B) there is no
Plan with respect to which the assets of your general account's reserves (as
determined under Section 807(d) of the Code) for all contracts held by or on
behalf of such Plan and all other Plans maintained by the same employer or its
affiliates (as so defined) or by the same employee organization exceeds 10% of
the liabilities of your general account.

As used in this Section 3.2(b), 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.

CLOSING CONDITIONS

Your obligation to purchase the Notes on the Closing Date shall be subject to
the performance by the Company of its agreements hereunder, which are to be
performed at or prior to the time of delivery of the Notes, and to the following
conditions to be satisfied on or before the Closing Date:

Representations and Warranties

. The representations and warranties of the Company contained in this Agreement
or otherwise made in writing in connection herewith shall be true and correct on
or as of the Closing Date and the Company shall have delivered to you a
certificate to such effect, dated the Closing Date, and executed by the
Treasurer of the Company.

Legal Opinions

. You shall have received from Gardner, Carton & Douglas, who is acting as your
special counsel in this transaction, from Varnum, Riddering, Schmidt & Howlett
LLP, counsel to the Company, their opinions, dated such Closing Date, in form
and substance satisfactory to you and covering substantially the matters set
forth or provided in the attached Exhibits B and C, respectively.

Events of Default

. No event shall have occurred and be continuing on the Closing Date which would
constitute a Default or an Event of Default, and the Company shall have
delivered to you a certificate to such effect, dated the Closing Date and
executed by the Treasurer of the Company.

Payment of Fees and Expenses

. The Company shall have paid all fees, expenses, costs and charges, including
the fees and expenses of Gardner, Carton & Douglas, your special counsel,
incurred by you through the Closing Date and incident to the proceedings in
connection with, and transactions contemplated by, this Agreement and the Notes.

Legality of Investment

. Your acquisition of the Notes shall constitute a legal investment as of the
Closing Date under the laws and regulations of each jurisdiction to which you
may be subject (without resort to any "basket" or "leeway" provision which
permits the making of an investment without restrictions as to the character of
the particular investment being made), and such acquisition shall not subject
you to any penalty or other onerous condition in or pursuant to any such law or
regulation; and you shall have received such certificates or other evidence as
you may reasonably request to establish compliance with this condition.

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Private Placement Number

. A Private placement number with respect to the Notes shall have been issued by
S&P.

Proceedings and Documents

. All corporate proceedings taken in connection with the transactions
contemplated by this Agreement, and all documents necessary to the consummation
of such transactions shall be satisfactory in form and substance to you and your
special counsel, and you and your special counsel shall have received copies
(executed or certified as may be appropriate) of all legal documents or
proceedings which you and they may reasonably request.

INTERPRETATION OF AGREEMENT

Certain Terms Defined

. The terms hereinafter set forth when used in this Agreement shall have the
following meanings:

Affiliate - Any Person (other than a Subsidiary or an original Purchaser)
(i) who is a director or executive officer of the Company or any Subsidiary,
(ii) which directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, the Company, (iii) which
beneficially owns or holds securities representing 5% or more of the combined
voting power of the Voting Stock of the Company or any Subsidiary or (iv) of
which securities representing 5% or more of the combined voting power of its
Voting Stock (or in the case of a Person not a corporation, 5% or more of its
equity) is beneficially owned or held by the Company or any Subsidiary. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

Agreement - As defined in Section 1.1.

Bank Credit Agreement - That certain Multi-currency Revolving Credit Loan
Agreement, dated as of September 16, 1997, by and between the Company, Donnelly
Hohe GmbH & Co. KG, certain Subsidiaries party thereto, the banks named therein,
and Bank One, Michigan, N.A. individually and as Agent for the lenders
thereunder, as the same may be amended, modified, supplemented, restated,
replaced or refinanced from time to time.

Banks - All banks and other lenders to the Company from time to time party to
the Bank Credit Agreement.

Business Day - Any day, other than Saturday, Sunday or a legal holiday or any
other day on which banking institutions in the United States of America
generally are authorized by law to close.

Capitalized Lease - Any lease the obligation for Rentals with respect to which,
in accordance with GAAP, would be required to be capitalized on a balance sheet
of the lessee or for which the amount of the asset and liability thereunder, as
if so capitalized, would be required to be disclosed in a note to such balance
sheet.

Closing Date - As defined in Section 1.2.

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Code - The Internal Revenue Code of 1986, as amended.

Consolidated EBIT - For any period, the sum of (a) income or loss before taxes
on income for the Company and its Subsidiaries determined on a consolidated
basis in accordance with GAAP, plus (b) to the extent deducted from revenues in
determining such income or loss (1) Consolidated Interest Expense, (2) the
Michigan Single Business Tax and German Trade Taxes, and (3) to the extent the
Company elects (in accordance with Financial Accounting Standards Board
Statement No. 141 and No. 142) to write off goodwill reflected on its books as
of the date of this Agreement, the amount of such write off not in excess of
$10,000,000. In determining Consolidated EBIT for any period that includes the
third quarter of the Company's 2001 fiscal year (as determined pursuant to
clause (a) of the preceding sentence) the amount of income or loss before taxes
on income included in such calculation for such quarter shall be $0; provided,
however, that the adjustment provided for in this sentence shall not apply
unless, on or prior to September 30, 2002, each of the Senior Loan Documents is
amended to include a provision that, in the reasonable judgment of the holders
of the Notes, is substantially similar.

Consolidated EBITDA - For any period, the sum of (a) income or loss before taxes
on income for the Company and its Subsidiaries determined on a consolidated
basis in accordance with GAAP, plus (b) to the extent deducted from revenues in
determining such income or loss, (1) Consolidated Interest Expense, (2) the
Michigan Single Business Tax and German Trade Taxes, (3) depreciation, (4)
amortization, (5) to the extent the Company elects (in accordance with Financial
Accounting Standards Board Statement No. 141 and No. 142) to write off goodwill
reflected on its books as of the date of this Agreement, the amount of such
write off not in excess of $10,000,000, plus (c) to the extent not otherwise
included in determining such income or loss, the amount of cash dividends or
distributions received by the Company or its consolidated Subsidiaries from any
Person that is not a consolidated Subsidiary. In determining Consolidated EBITDA
for any period that includes the third quarter of the Company's 2001 fiscal year
(as determined pursuant to clause (a) of the preceding sentence) the amount of
income or loss before taxes on income included in such calculation for such
quarter shall be $0; provided, however, that the adjustment provided for in this
sentence shall not apply unless, on or prior to September 30, 2002, each of the
Senior Loan Documents is amended to include a provision that, in the reasonable
judgment of the holders of the Notes, is substantially similar.

Consolidated Indebtedness - Indebtedness of the Company and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.

Consolidated Interest Expense - For any period, all interest expense deducted
from revenues by the Company and its consolidated Subsidiaries during such
period.

Consolidated Net Income - For any period, the net earnings of the Company and
its Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP, but excluding extraordinary items.

Consolidated Net Worth - The consolidated shareholders' equity of the Company
and its Subsidiaries determined in accordance with GAAP.

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Consolidated Tangible Net Worth - Consolidated Net Worth less the net book value
of all items of the following character that are included in the assets of the
Company and its consolidated Subsidiaries: (i) goodwill, including without
limitation, the excess of cost over book value of any asset, (ii) organization
or experimental expenses, (iii) unamortized debt discount and expense, (iv)
patents, trademarks, trade names and copyrights, (v) treasury stock, (vi)
deferred taxes and deferred charges, (vii) franchises, licenses and permits, and
(viii) all other assets that are deemed intangible assets under GAAP.

Consolidated Total Assets - The total assets of the Company and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.

Consolidated Total Capitalization - The sum of Consolidated Net Worth and
Consolidated Indebtedness.

Debt to EBITDA Ratio - The ratio of (a) Consolidated Indebtedness less
Guaranties in respect of such Consolidated Indebtedness to (b) Consolidated
EBITDA, calculated for the Company's eight most recently ended fiscal quarters
divided by (2) two.

Default - Any event which, with the lapse of time or the giving of notice, or
both, would become an Event of Default.

Determination Date - The day 3 Business Days before the date fixed for a
prepayment pursuant to Section 2.2 or Section 7.12 or the date of declaration
pursuant to Section 8.2.

Disposition - as defined in Section 7.12.

Donnelly Receivables - as defined in Section 7.12.

Environmental Claim - Any notice of violation, claim, demand, abatement order or
other order by any Person for any damage, including personal injury (including
sickness, disease or death), tangible or intangible property damage,
contribution, indemnity, indirect or consequential damages, damage to the
environment, nuisance, pollution, contamination or other adverse effects on the
environment, or for fines, penalties or restrictions, resulting from or based
upon (i) the existence of a Release (whether sudden or non-sudden or accidental
or non-accidental) of, or exposure to, any Hazardous Material in, into or onto
the environment at, in, by, from or related to any Facility, (ii) the use,
handling, transportation, storage, treatment or disposal of Hazardous Materials
in connection with the operation of any Facility, or (iii) the violation, or
alleged violation, of any statute, rule, regulation, ordinance, order, permit,
license or authorization of or from any governmental authority, agency or court
relating to environmental matters pertaining to the Facilities.

Environmental Laws - All laws relating to environmental matters, including those
relating to (i) fines, orders, injunctions, penalties, damages, contribution,
cost recovery compensation, losses or injuries resulting from the Release or
threatened Release of Hazardous Materials and to the generation, use, storage,
transportation, or disposal of Hazardous Materials, in any manner

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applicable to the Company or any of its Subsidiaries or any of their respective
properties, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. 9601 et seq.), the
Hazardous Material Transportation Act (49 U.S.C. 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. 6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. 1251 et seq.), the Clean Air Act (42 U.S.C.
7401 et seq.), the Toxic Substances Control Act (15 U.S.C. 2601 et seq.), the
Occupational Safety and Health Act (29 U.S.C. 651 et seq.) and the Emergency
Planning and Community Right-to-Know Act (42 U.S.C. 11001 et seq.), and (ii)
environmental protection, including the National Environmental Policy Act (42
U.S.C. 4321 et seq.), and comparable foreign and state laws, each as amended or
supplemented, and any similar or analogous local, state, federal or foreign
statutes and regulations promulgated pursuant thereto, each as in effect as of
the date of determination.

ERISA - The Employee Retirement Income Security Act of 1974, as amended from
time to time and any successor statute.

ERISA Affiliate - The Company and (i) any corporation that is a member of a
controlled group of corporations within the meaning of Section 414(b) of the
Code of which the Company is a member; (ii) any trade or business (whether or
not incorporated) which is a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Code of which the
Company is a member; and (iii) any member of an affiliated service group within
the meaning of Section 414(m) or (o) of the Code of which the Company, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member.

Event of Default - As defined in Section 8.1.

Exchange Act - The Securities Exchange Act of 1934, as amended, and as it may be
further amended from time to time.

Facility - Any and all real property (including all buildings, fixtures or other
improvements located thereon) now or heretofore owned, leased, operated or used
(under permit or otherwise) by the Company or any of its Subsidiaries.

GAAP

- Generally accepted accounting principles in effect from time to time in the
United States.

Guaranties - All obligations (other than endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) of a Person
guaranteeing or, in effect, guaranteeing any Indebtedness, dividend or other
obligation of any other Person in any manner, whether directly or indirectly,
including, without limitation, all obligations incurred through an agreement,
contingent or otherwise, by such Person: (i) to purchase such Indebtedness or
obligation or any property or assets constituting security therefor, (ii) to
advance or supply funds (x) for the purchase or payment of such Indebtedness or
obligation, (y) to maintain working capital or other balance sheet condition or
(z) otherwise to advance or make available funds for the purchase or payment of
such Indebtedness or obligation, (iii) to lease property or to purchase
securities or other property or services primarily for the purpose of assuring
the owner of such

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Indebtedness or obligation against loss in respect thereof, or (iv) otherwise to
assure the owner of the Indebtedness or obligation against loss in respect
thereof. For the purposes of all computations made under this Agreement,
Guaranties in respect of any Indebtedness for borrowed money shall be deemed to
be Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and Guaranties in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.

Hazardous Materials - (i) Any chemical, material or substance defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous waste," "restricted hazardous
waste," or "toxic substances" or words of similar import under any Environmental
Laws; (ii) any oil, petroleum or petroleum derived substance, any drilling
fluid, produced water or other waste associated with the exploration,
development or production of crude oil, any flammable substance or explosive,
any radioactive material, any hazardous waste or substance, any toxic waste or
substance or any other material or pollutant that (x) poses a hazard to any
property of the Company or any of its Subsidiaries or to Persons on or about
such property or (y) causes such property to be in violation of any
Environmental Law; (iii) any friable asbestos, urea formaldehyde foam
insulation, electrical equipment which contains any oil or dielectric fluid with
levels of polychlorinated biphenyls in excess of fifty parts per million; and
(iv) any other chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority.

Indebtedness - (i) All items of borrowings, including Capitalized Leases, which
in accordance with GAAP would be included in determining total liabilities as
shown on the liability side of a balance sheet, and (ii) Guaranties of
obligations of other Persons of the character referred to in this definition,
provided, however, that, except as otherwise required in this Agreement,
Indebtedness of a Person shall not include Indebtedness which would be
eliminated in preparing a consolidated balance sheet in accordance with GAAP.

Institutional Holder - Any bank, trust company, insurance company, pension fund,
mutual fund or other similar financial institution, including, without limiting
the foregoing, any "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act, which is or becomes a holder of any Note.

Interest Coverage Ratio - As of any date, (a) Consolidated EBIT, calculated for
the Company's eight most recently ended fiscal quarters, to (b) Consolidated
Interest Expense, calculated for the Company's eight most recently ended fiscal
quarters.

Investments - All investments made, in cash or by delivery of property, directly
or indirectly, in any Person, whether by acquisition of shares of capital stock,
indebtedness or other obligations or securities or by loan, advance, capital
contribution or otherwise; provided, however, that "Investments" shall not mean
or include investments in property to be used or consumed in the ordinary course
of business.

Joint Venture - Any association with one or more Persons to undertake, through a
corporation or partnership, a commercial or business enterprise; provided that,
any such

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association through a Subsidiary that is consolidated with the Company for
financial reporting purposes in accordance with GAAP shall not be deemed to be a
Joint Venture.

Lien - Any mortgage, pledge, security interest, encumbrance, lien or charge of
any kind, including any agreement to grant any of the foregoing, any conditional
sale or other title retention agreement, any lease in the nature thereof,
including a Capitalized Lease, and the filing of or agreement to file any
financing statement under the Uniform Commercial Code of any jurisdiction in
connection with any of the foregoing.

Make-Whole Amount - As of any Determination Date, to the extent that the
Reinvestment Yield on such Determination Date is lower than the interest rate
payable on or in respect of the Notes, the excess of (a) the sum of the present
values of each principal and interest payment to be foregone by any prepayment
(exclusive of accrued interest on such Notes through the date of prepayment) on
such Notes, determined by discounting (semi-annually on the basis of a 360-day
year composed of twelve 30-day months), each such payment at a rate that is
equal to the Reinvestment Yield over (b) the aggregate principal amount of such
Notes then to be prepaid or paid. To the extent that the Reinvestment Yield on
any Determination Date is equal to or higher than the interest rate payable on
or in respect of such Notes, the Make-Whole Amount is zero.

Material Adverse Effect - (i) A material adverse effect on the business,
properties, profits, prospects, operations or condition, financial or otherwise,
of the Company or any Subsidiary, (ii) the impairment of the ability of the
Company to perform its obligations under this Agreement or the Notes or
(iii) the impairment of the ability of the holders of the Notes to enforce such
obligations.

Moody's - Moody's Investors Service, Inc.

Multiemployer Plan - Any Plan that is a "multiemployer plan" (as such term is
defined in section 4001(a)(3) of ERISA).

Net Worth - With respect to any Joint Venture, total assets less total
liabilities (excluding Indebtedness of the Joint Venture to the Company that is
subordinate to all of its other Indebtedness), all as determined in accordance
with GAAP.

Notes - As defined in Section 1.1.

PBGC - The Pension Benefit Guaranty Corporation referred to and defined in ERISA
or any successor thereto.

Person - Any individual, corporation, partnership, Joint Venture, association,
joint-stock company, trust, unincorporated organization or government or any
governmental authority, agency or political subdivision.

Plan - Any employee benefit pension plan, as defined in Section 3(2) of ERISA,
that has been established by, or contributed to, or is maintained by the Company
or any Subsidiary.

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Priority Debt - means, as of any date, the sum (without duplication) of
(a) outstanding Indebtedness of a Subsidiary (other than Indebtedness owed to
the Company or a Wholly-Owned Subsidiary) and (b) Indebtedness of the Company
and any Subsidiary secured by Liens not otherwise permitted by Sections 7.6(a)
through (g).

Purchaser - As defined in Section 1.1.

Reinvestment Yield - shall mean the sum of (i) 0.50% plus (ii) the yield
reported, as of 10:00 A.M. (New York City time) on the Determination Date, on
the Bloomberg Financial Market Service (or, if not available, any other
nationally recognized trading screen reporting on-line intraday trading in
United States government securities) for actively traded U.S. Treasury
securities having a maturity equal to the Weighted Average Life to Maturity of
the Notes then being prepaid or paid as of the date of prepayment or payment,
rounded to the nearest month, or if such yields shall not be reported as of such
time or the yields reported as of such time are not ascertainable in accordance
with the preceding clause, then the arithmetic mean of the yields published in
the statistical release designated H.15(519) (or any successor publication) of
the Board of Governors of the Federal Reserve System under the caption "U.S.
Government Securities--Treasury Constant Maturities" (the "statistical release")
for the maturity corresponding to the remaining Weighted Average Life to
Maturity of the Notes as of the date of such prepayment or payment rounded to
the nearest month. For purposes of calculating the Reinvestment Yield, the most
recent weekly statistical release published prior to the applicable
Determination Date shall be used. In the event the statistical release is not
published, the arithmetic mean of such reasonably comparable index as may be
designated by the holders of at least 51% in aggregate principal amount of the
Notes, for the maturity corresponding to the remaining Weighted Average Life to
Maturity of the Notes as of the date of prepayment or payment, as the case may
be, rounded to the nearest month shall be used. If no maturity exactly
corresponding to such rounded Weighted Average Life to Maturity shall appear
therein, yields for the two most closely corresponding published maturities (one
of which occurs prior and the other subsequent to the Weighted Average Life to
Maturity) shall be calculated pursuant to the foregoing sentence and the
Reinvestment Yield shall be interpolated from such yields on a straight-line
basis (rounding, in each of such relevant periods, to the nearest month).

Release - Any release, spill, emission, leaking, pumping, pouring, emptying,
dumping, injection, escaping, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment (including the abandonment
or disposal of any barrel, container or other closed receptacle containing any
Hazardous Material), or into or out of any Facility, including the movement of
any Hazardous Material through the air, soil, surface water, groundwater or
property.

Rentals - As of the date of any determination thereof, all fixed payments
(including all payments which the lessee is obligated to make to the lessor on
termination of the lease or surrender of the property) payable by the Company or
a Subsidiary, as lessee or sublessee under a lease of real or personal property,
but exclusive of any amounts required to be paid by the Company or a Subsidiary
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes, assessments, amortization and similar
charges. Fixed

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rents under any so-called "percentage leases" shall be computed on the basis of
the minimum rents, if any, required to be paid by the lessee, regardless of
sales volume or gross revenues.

Sale and Leaseback Transaction - Any arrangement, directly or indirectly, with
any Person whereby a seller or a transferor shall sell or otherwise transfer any
real or personal property and then or thereafter lease (whether or not a
Capitalized Lease), or repurchase under an extended purchase contract, the same
or similar property from the purchaser or the transferee of such property.

S&P - Standard & Poor's Corporation.

Securities Act - The Securities Act of 1933, as amended, and as it may be
further amended from time to time.

Senior Loan Documents - Each of the Bank Credit Agreement and the Note Purchase
Agreement relating to the Company's 6.77% Senior Notes, Series A, due April 1,
2009 and 7.23% Senior Notes, Series B, due April 1, 2012, as the same may be
amended, modified, supplemented, restated, replaced or refinanced from time to
time.

Subsidiary - Any corporation of which shares of Voting Stock representing more
than 50% of the combined voting power of each outstanding class of Voting Stock
are owned, directly or indirectly, by the Company. For purposes of this
Agreement, Donnelly Export Corporation also shall be deemed to be a Subsidiary
as long as it is included in the combined consolidated financial statements of
the Company.

Voting Stock - Capital stock of any class of a corporation having power under
ordinary circumstances to vote for the election of members of the board of
directors of such corporation, or persons performing similar functions.

Weighted Average Life to Maturity - As applied to any prepayment of principal of
the Notes at any date, the number of years obtained by dividing (a) the then
outstanding principal amount of the Notes to be prepaid, into (b) the sum of the
products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity, or other required payment, including
payment at final maturity, foregone by virtue of such prepayment of the Notes,
by (ii) the number of years (calculated to the nearest 1/12th) which would have
elapsed between such date and the making of such payment.

Wholly-Owned - When applied to a Subsidiary, any Subsidiary 100% of the Voting
Stock of which is owned by the Company and/or its Wholly-Owned Subsidiaries,
other than directors' qualifying shares.

Terms which are defined in other Sections of this Agreement shall have the
meanings specified therein.

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Accounting Principles

. Where the character or amount of any asset or liability or item of income or
expense is required to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement, the same
shall be done in accordance with United States GAAP in force at the time this
Agreement is executed, except where such principles are inconsistent with the
requirements of this Agreement.

Valuation Principles

. Except where indicated expressly to the contrary by the use of terms such as
"fair value," "fair market value" or "market value," each asset, each liability
and each capital item of any Person, and any quantity derivable by a computation
involving any of such assets, liabilities or capital items, shall be taken at
the net book value thereof for all purposes of this Agreement. "Net book value"
with respect to any asset, liability or capital item of any Person shall mean
the amount at which the same is recorded or, in accordance with GAAP, should
have been recorded in the books of account of such Person, as reduced by any
reserves which have been or, in accordance with GAAP, should have been set aside
with respect thereto, but in every case (whether or not permitted in accordance
with GAAP) without giving effect to any write-up, write-down or write-off (other
than any write-down or write-off the entire amount of which was charged to
Consolidated Net Income or to a reserve which was a charge to Consolidated Net
Income) relating thereto which was made after the date of this Agreement.

Direct or Indirect Actions

. Where any provision in this Agreement refers to action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether the action in question is taken directly or indirectly by
such Person.

AFFIRMATIVE COVENANTS

The Company agrees that, for so long as any amount remains unpaid on any Note:

Corporate Existence

. The Company will maintain and preserve, and will cause each Subsidiary to
maintain and preserve, its corporate existence and right to carry on its
business and use, and cause each Subsidiary to use, its best efforts to
maintain, preserve, renew and extend all of its rights, powers, privileges and
franchises necessary to the proper conduct of its business; provided, however,
that the foregoing shall not prevent any transaction permitted by Sections 7.11,
7.12 or 7.13 or the termination of the corporate existence of any Subsidiary if,
in the opinion of the Board of Directors or senior management of the Company,
such termination is in the best interests of the Company, is not disadvantageous
to holders of the Notes and is not otherwise prohibited by this Agreement.

Insurance

. The Company will insure and keep insured, and will cause each Subsidiary to
insure and keep insured, at all times all of its properties which are of an
insurable nature and of the character usually insured by companies operating
properties similar to the properties of the Company or each such Subsidiary,
against loss or damage by fire and from other causes as are required by law or
sound business practice to be insured and are customarily insured against by
companies engaged in the manufacture and distribution of automotive parts in
such amounts as are usually insured against by such companies. The Company also
will maintain, and also will cause each Subsidiary to maintain, at all times
adequate insurance against loss or damage from such hazards and risks to the
person and property of others as are required by law or sound business practice
to be insured and are usually insured against by companies

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operating properties similar to the properties of the Company or each such
Subsidiary. All such insurance shall be carried with financially sound and
reputable insurers of good standing.

Taxes, Claims for Labor and Materials

. The Company will pay and discharge prior to the date on which penalties attach
thereto, and will cause each Subsidiary to pay and discharge prior to the date
on which penalties attach thereto, all taxes, assessments and governmental
charges or levies imposed upon it or its property or assets, or upon properties
leased by it (but only to the extent required to do so by the applicable lease),
prior to the date on which penalties attach thereto, and all lawful claims
which, if unpaid, might become a Lien upon its property or assets, provided that
neither the Company nor any Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim, the payment of which is being contested in
good faith and by proper proceedings that will stay the forfeiture or sale of
any property and with respect to which adequate reserves are maintained in
accordance with GAAP.

Maintenance of Properties

. The Company will maintain, preserve and keep, and will cause each Subsidiary
to maintain, preserve and keep, its material properties (whether owned in fee or
a leasehold interest) in good repair and working order, ordinary wear and tear
excepted, and from time to time will make all necessary repairs, replacements,
renewals, improvements and additions.

Maintenance of Records

. The Company will keep, and will cause each Subsidiary to keep, at all times
proper books of record and account in which full, true and correct entries will
be made of all dealings or transactions of or in relation to the business and
affairs of the Company or such Subsidiary, in accordance with GAAP consistently
applied throughout the period involved (except for such changes as are disclosed
in such financial statements or in the notes thereto and concurred in by the
Company's independent certified public accountants), and the Company will, and
will cause each Subsidiary to, provide reasonable protection against loss or
damage to such books of record and account.

Financial Information and Reports

. The Company will furnish to you and to any other Institutional Holder (in
duplicate if you or such other holder so request) the following:

As soon as available and in any event within 60 days after the end of each of
the first three quarterly accounting periods of each fiscal year of the Company,
a condensed combined consolidated balance sheet of the Company and its
Subsidiaries as of the end of such period and condensed combined consolidated
statements of income and cash flows of the Company and its Subsidiaries for the
periods beginning on the first day of such fiscal year and the first day of such
quarterly accounting period and ending on the date of such balance sheet,
setting forth in comparative form the corresponding condensed combined
consolidated figures for the corresponding periods of the preceding fiscal year,
all in reasonable detail, prepared in accordance with GAAP consistently applied
throughout the period involved (except for changes disclosed in such financial
statements or in the notes thereto and concurred in by the Company's independent
certified public accountants) and certified by the chief financial officer, Vice
President of Financial Operations or Treasurer of the Company (i) outlining the
basis of presentation, and (ii) stating that the information presented in such
statements presents fairly the financial condition of the Company and its
Subsidiaries and the results of operations for the period, subject to customary
year-end audit adjustments;

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As soon as available and in any event within 120 days after the last day of each
fiscal year, a combined consolidated balance sheet of the Company and its
Subsidiaries as of the end of such fiscal year and the related combined
consolidated statements of income, shareholders' equity and cash flows for such
fiscal year, in each case setting forth in comparative form figures for the
preceding fiscal year, all in reasonable detail, prepared in accordance with
GAAP consistently applied throughout the period involved (except for changes
disclosed in such financial statements or in the notes thereto and concurred in
by independent certified public accountants) and accompanied by a report
unqualified as to scope of audit and unqualified as to going concern as to the
combined consolidated balance sheet and the related combined consolidated
statements of income, shareholders' equity and cash flows by BDO Seidman, LLP,
or any other firm of independent public accountants of recognized national
standing selected by the Company, to the effect that such financial statements
have been prepared in conformity with GAAP and present fairly, in all material
respects, the financial condition of the Company and its Subsidiaries and that
the examination of such financial statements by such accounting firm has been
made in accordance with generally accepted auditing standards;

Together with the financial statements delivered pursuant to paragraphs (a) and
(b) of this Section 6.6, a certificate of the chief financial officer, Vice
President of Financial Operations or Treasurer of the Company, (i) to the effect
that such officer has re-examined the terms and provisions of this Agreement and
that, to the best of his knowledge, on the date of such certificate, during the
periods covered by such financial statements and as of the end of such periods,
neither the Company nor any Subsidiary is, or was, in default in the fulfillment
of any of the terms, covenants, provisions and conditions of this Agreement and
that no Default or Event of Default is occurring or has occurred as of the date
of such certificate, during such periods and as of the end of such periods, or
if such officer is aware of any Default or Event of Default, such officer shall
disclose in such statement the nature thereof, its period of existence and what
action, if any, the Company has taken or proposes to take with respect thereto,
and (ii) stating whether the Company is in compliance with Sections 7.1 through
7.16 and setting forth, in sufficient detail, the information and computations
required to establish whether or not the Company was in compliance with the
requirements of Sections 7.1 through 7.7 and 7.9 through 7.13 during the periods
covered by the financial statements then being furnished and as of the end of
such periods;

Together with the financial reports delivered pursuant to paragraph (b) of this
Section 6.6, a certificate from the Company's independent certified public
accountants stating that in making the examination necessary for expressing an
opinion on such financial statements, nothing came to their attention that
caused them to believe that there is in existence or has occurred any Default or
Event of Default hereunder (the occurrence of which is ascertainable by
accountants in the course of normal audit procedures) or, if such accountants
shall have obtained knowledge of any such Default or Event of Default,
describing the nature thereof and the length of time it has existed;

Within 5 days after the Company obtains knowledge thereof, notice of any
litigation or any governmental proceeding pending against the Company or any
Subsidiary in which the damages sought exceed $1,000,000, individually or in the
aggregate, or which might reasonably be expected to result in a Material Adverse
Effect;

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As soon as available, copies of each financial statement, notice, report and
proxy statement which the Company shall furnish to its stockholders; copies of
each registration statement and periodic report which the Company may file with
the Securities and Exchange Commission, and any similar or successor agency of
the Federal government administering the Securities Act, the Exchange Act or the
Trust Indenture Act of 1939, as amended; without duplication, copies of each
report relating to the Company or its securities which the Company may file with
any securities exchange on which any of the Company's securities may be
registered; copies of any orders in any material proceedings to which the
Company or any of its Subsidiaries is a party, issued by any governmental
agency, Federal or state, having jurisdiction over the Company or any of its
Subsidiaries; and, except at such times as the Company is a reporting company
under Section 13 or 15(d) of the Exchange Act or has complied with the
requirements for the exemption from registration under the Exchange Act set
forth in Rule 12g-3-2(b), such financial or other information as any holder of
the Notes or prospective purchaser of the Notes may reasonably request;

As soon as available, a copy of each other report submitted to the Company or
any Subsidiary by independent accountants retained by the Company or any
Subsidiary in connection with any interim or special audit made by them of the
books of the Company or any Subsidiary;

Annually following any change in the composition of the Company's Subsidiaries
from that set forth in Annex II, as theretofore updated pursuant to this
paragraph, an updated list setting forth the information specified in Annex II;

If at any time (but only so long as) the Company provides consolidating
financial statements to any holder of Indebtedness, copies of such consolidating
financial statements; and

Such additional information as you or such other Institutional Holder of the
Notes may reasonably request concerning the Company and its Subsidiaries.

Inspection of Properties and Records

. The Company will allow, and will cause each Subsidiary to allow, any
representative of you or any other Institutional Holder, so long as you or such
other Institutional Holder holds any Note, to visit and inspect any of its
properties, to examine its books of record and account and to discuss its
affairs, finances and accounts with its officers and its public accountants (and
by this provision the Company authorizes such accountants to discuss with you or
such Institutional Holder its affairs, finances and accounts). Such visitations
and inspections shall take place at such reasonable times and as often as you or
such Institutional Holder may reasonably request, provided that, if at the time
thereof any Default or Event of Default has occurred and is continuing, such
visitations and inspections shall be at the Company's expense. Any proprietary
or other confidential, competitively sensitive information obtained by you or
any other Institutional Holder in the course of any visitation or inspection
shall not be disclosed to any Person unless required by law.

ERISA

.

All assumptions and methods used to determine the actuarial valuation of
employee benefits, both vested and unvested, under any Plan, and each such Plan,
whether now existing or adopted after the date hereof, will comply in all
material respects with ERISA and other applicable laws.

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The Company will not at any time permit any Plan established, maintained or
contributed to by it or any Subsidiary or an "affiliate" (as defined in Section
407(d)(7) of ERISA) of the Company to:

engage in any "prohibited transaction" as such term is defined in Section 4975
of the Code or in Section 406 of ERISA;

incur any "accumulated funding deficiency" as such term is defined in Section
302 of ERISA, whether or not waived; or

be terminated under circumstances which are likely to result in the imposition
of a lien on the property of the Company or any Subsidiary pursuant to Section
4068 of ERISA, if and to the extent such termination is within the control of
the Company;

if the event or condition described in clause (i), (ii) or (iii) above is likely
to subject the Company, any Subsidiary or ERISA affiliate to liabilities which,
individually or in the aggregate, could have a Material Adverse Effect.

Upon request, the Company will furnish you or any other Institutional Holder a
copy of the annual report of each Plan (Form 5500) required to be filed with the
Internal Revenue Service no later than 30 days after the later of the date such
report has been filed with the Internal Revenue Service or the date the copy is
requested.

Promptly upon the occurrence thereof, the Company will give you and each other
Institutional Holder written notice of (i) a reportable event (within the
meaning of Section 4043(b) of ERISA and applicable regulations) with respect to
any Plan; (ii) the institution of any steps by the Company, any Subsidiary, any
ERISA affiliate, the PBGC or any other Person to terminate any Plan; (iii) the
institution of any steps by the Company, any Subsidiary or any ERISA affiliate
to withdraw from any Plan; (iv) a prohibited transaction in connection with any
Plan; (v) any material increase in the contingent liability of the Company, any
Subsidiary or any ERISA affiliate with respect to any liability under any
employee welfare benefit plan (as defined in Section (3)(1) of ERISA) which has
been or is maintained by the Company, any Subsidiary or any ERISA affiliate for
the purpose of providing post-retirement welfare benefits to plan participants
and their beneficiaries; or (vi) the taking of any action by the Internal
Revenue Service, the Department of Labor or the PBGC with respect to any of the
foregoing which would result in any material liability to the Company or any of
its Subsidiaries.

Compliance with Laws

.

The Company will comply, and will cause each Subsidiary to comply, with all
laws, rules and regulations, including Environmental Laws, relating to its or
their respective businesses, other than laws, rules and regulations the failure
to comply with which or the sanctions and penalties resulting therefrom,
individually or in the aggregate, would not have a Material Adverse Effect or
would not result in the creation of a Lien which, if incurred in the

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ordinary course of business, would not be permitted by Section 7.6 on any
property of the Company or any Subsidiary; provided, however, that the Company
and its Subsidiaries shall not be required to comply with laws, rules and
regulations the validity or applicability of which are being contested in good
faith and by appropriate proceedings and as to which the Company has established
adequate reserves on its books in accordance with GAAP.

Promptly upon the occurrence thereof, the Company will give you and each other
Institutional Holder notice of the institution of any proceedings against, or
the receipt of notice of potential liability or responsibility of, the Company
or any Subsidiary for violation, or the alleged violation, of any Environmental
Law which violation could give rise to a material liability of the Company and
its Subsidiaries taken as a whole.

Acquisition of Notes

. Neither the Company nor any Subsidiary or Affiliate, directly or indirectly,
will repurchase or offer to repurchase any Notes unless the offer is made to
repurchase Notes pro rata from all holders at the same time and on the same
terms. The Company will forthwith cancel any Notes in any manner or at any time
acquired by the Company or any Subsidiary or Affiliate and such Notes shall not
be deemed to be outstanding for any of the purposes of this Agreement or the
Notes.

Private Placement Number

. The Company consents to the filing of copies of the Notes with S&P to obtain a
private placement number.

Parity
. Until such time as the Company's 6.67% Senior Notes due November 30, 2003 have
been repaid in full,

This Agreement incorporates each financial or restrictive covenant imposed on
the Company or any Subsidiary as of the Closing Date by any of the Banks that is
more restrictive than, or not covered by, the financial and restrictive
covenants contained in this Agreement.

In the event that any of the Banks shall impose upon the Company or any
Subsidiary any additional or more restrictive financial or negative covenant
than is imposed upon the Company or any Subsidiary under this Agreement, or the
Company or any Subsidiary grants any such Bank a more favorable financial or
negative covenant than is granted under this Agreement, the Company shall
promptly so notify and furnish a copy thereof to each holder of a Note, and this
Agreement shall be deemed to be amended automatically to incorporate such
additional or more restrictive financial covenant as to the Company or any
Subsidiary or such more favorable financial covenant as to any holder of a Note.
Notwithstanding the foregoing, this Agreement shall not be so amended in the
event that such covenants are contained in any agreement pursuant to which the
Company or any Subsidiary may incur Indebtedness not in excess of $5,000,000
under the terms thereof; provided, however, that the Indebtedness that the
Company or any Subsidiary may incur under all such agreements may not exceed
$15,000,000 in the aggregate and, provided further, that this sentence shall not
apply unless, on or prior to September 30, 2002, each of the Senior Loan
Documents is amended to include a provision that, in the reasonable judgment of
the holders of the Notes, is substantially similar.

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So long as no Default or Event of Default exist, if the Banks subsequently amend
a financial or negative covenant deemed to be incorporated in this Agreement by
virtue of Section 6.12(a) or (b) to make it less restrictive as to the Company
or any Subsidiary or less favorable as to the Banks, then the Company shall
promptly so notify and furnish a copy of such subsequent amendment to each
holder of a Note, and this Agreement shall be deemed to be amended automatically
to incorporate such subsequent amendment of the financial or negative covenant;
provided, however, that notwithstanding anything contained in this Section
6.12(c) no amendment to this Agreement will be made pursuant to this Section
6.12(c) if such amendment would make a financial or negative covenant contained
in this Agreement (as then in effect without taking into account any amendments
previously made pursuant to Section 6.12(a) or (b) above) less restrictive as to
the Company or any Subsidiary or less favorable to any holder of a Note.

NEGATIVE COVENANTS

The Company agrees that, for so long as any amount remains unpaid on any Note:

Debt to EBITDA Ratio.

The Company will not permit the Debt to EBITDA Ratio to exceed 2.75 to 1.00 as
of the end of any fiscal quarter.

Priority Debt.

The Company will not and will not permit any Subsidiary to incur or have
outstanding at any time Priority Debt, except for (a) Priority Debt outstanding
on the Closing Date and described in the attached
Annex VI
; and (b) additional Priority Debt not in excess of $15,000,000.

Interest Coverage Ratio.

The Company will not permit the Interest Coverage Ratio to be less than 2.00 to
1.00 as of the end of any fiscal quarter.

Consolidated Tangible Net Worth

. The Company will not permit at any time its Consolidated Tangible Net Worth to
be less than $50,000,000 plus the cumulative sum of 40% of Consolidated Net
Income (without reduction for any losses) for each of its fiscal years ending
after July 3, 1993; provided, however, that for purposes of this Section 7.4, to
the extent the Company elects (in accordance with Financial Accounting Standards
Board Statement No. 141 and No. 142) to write off goodwill reflected on its
books as of the date of this Agreement, the amount of such write off (not in
excess of $10,000,000), to the extent deducted in calculating Consolidated Net
Income, shall be added back to Consolidated Net Income.

Indebtedness

. The Company will not, and will not permit any Subsidiary to, permit to exist,
create, assume, incur, guarantee or otherwise be or become liable for, directly
or indirectly, any Indebtedness other than:

the Notes;

Outstanding Indebtedness of the Company and its Subsidiaries described in the
attached Annex V, which is the only Indebtedness the Company has outstanding;

Indebtedness of a Subsidiary owed to the Company or a Wholly-Owned Subsidiary
and of the Company owed to a Wholly-Owned Subsidiary; and

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Additional Indebtedness, provided that at the time of incurring such additional
Indebtedness and after giving effect thereto and to the application of the
proceeds therefrom, the Consolidated Indebtedness then to be outstanding does
not exceed 65% of Consolidated Total Capitalization.

Liens

. The Company will not, and will not permit any Subsidiary to, permit to exist,
create, assume or incur, directly or indirectly, any Lien on its properties or
assets, whether now owned or hereafter acquired, except:

    Liens existing on property or assets of the Company or any Subsidiary as of
    the date of this Agreement that are described in the attached Annex III and
    Liens resulting from extensions, renewals or replacements of such Liens,
    provided that there is no increase in the Indebtedness secured thereby at
    the time of renewal and any new Lien attaches only to the same property
    theretofore subject to such earlier Lien;

    Liens for taxes, assessments or governmental charges not then due and
    delinquent or the validity of which is being contested in good faith and as
    to which the Company has established adequate reserves on its books;

    Liens arising in connection with court proceedings, provided the execution
    of such Liens is effectively stayed, such Liens are being contested in good
    faith by appropriate proceedings and the Company has established adequate
    reserves therefor on its books;

    Liens arising in the ordinary course of business and not incurred in
    connection with the borrowing of money (including encumbrances in the nature
    of zoning restrictions, easements, rights and restrictions of record on the
    use of real property, defects in title and landlord's, lessor's, mechanics'
    and materialmen's liens) that in the aggregate do not materially interfere
    with the conduct of the business of the Company and its Subsidiaries taken
    as a whole or materially impair the value of the property or assets subject
    thereto;

    Liens securing Indebtedness of a Subsidiary to the Company or to a
    Wholly-Owned Subsidiary or Liens securing Indebtedness of the Company to a
    Wholly-Owned Subsidiary;

    Liens (i) existing on property at the time of its acquisition by the Company
    or a Subsidiary and not created in contemplation thereof, whether or not the
    Indebtedness secured by such Lien is assumed by the Company or a Subsidiary;
    or (ii) on property created substantially contemporaneously with the date of
    acquisition or within 180 days of the acquisition or completion of
    construction thereof to secure or provide for all or a portion of the
    purchase price or cost of construction of such property; or (iii) existing
    on property of a Person at the time such Person is merged or consolidated
    with, or substantially all of its assets are acquired by, the Company or a
    Subsidiary and not created in contemplation thereof; provided in the case of
    clauses (i), (ii) and (iii) that such Liens do not extend to other property
    of the Company or any Subsidiary and that the aggregate principal amount of
    Indebtedness secured by each such Lien does not exceed 100% of the fair
    market value of all property subject thereto;

 a. Liens arising in connection with transactions for the sale of receivables
    permitted under Section 7.12; and

    

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    Liens not otherwise permitted by paragraphs (a) through (g) above incurred
    subsequent to the Closing Date to secure Indebtedness, provided that at the
    time of incurring such additional Indebtedness and after giving effect
    thereto and to the application of the proceeds therefrom, all covenants and
    conditions of this agreement shall be in compliance, including without
    limitation Section 7.2(b).

Restricted Payments

.
(a) The Company will not, except as hereinafter provided:

declare or pay any dividends, either in cash or property, on any shares of its
capital stock (except dividends or other distributions payable solely in shares
of common stock of the Company);

directly or indirectly, or through any Subsidiary, purchase, redeem, retire or
otherwise acquire any shares of capital stock of the Company or any warrants,
rights or options to purchase or acquire any shares of its capital stock; or

make any other payment or distribution, either directly or indirectly, or
through any Subsidiary, in respect of its capital stock;

(all such non-permitted declarations, payments, purchases, redemptions,
retirements, acquisitions, distributions or investments being hereinafter
referred to as "Restricted Payments") unless, after giving effect thereto, (x)
the aggregate amount of Restricted Payments made after June 27, 1992 to and
including the date of making the Restricted Payment in question would not exceed
the sum of: (A) $2,000,000; (B) 50% of cumulative Consolidated Net Income since
June 27, 1992 (less 100% thereof in case of a deficit); (C) the net cash
proceeds received by the Company from the sale of any shares of its capital
stock or warrants to acquire shares of its capital stock or any Indebtedness
that is converted into shares of its capital stock subsequent to June 27, 1992;
and (y) no Default or Event of Default would exist; and (z) the Company could
incur at least $1.00 of additional Indebtedness under Sections 7.1 and 7.5(d).

For purposes of this Section 7.7(a), (1) the amount of any Restricted Payment
which is payable or distributable in property other than cash or shares of
capital stock of the Company shall be deemed to be the greater of the book value
or fair market value (as determined in good faith by the Board of Directors of
the Company) of such property as of the date of the declaration or payment of
such Restricted Payment and (2) to the extent the Company elects (in accordance
with Financial Accounting Standards Board Statement No. 141 and No. 142) to
write off goodwill reflected on its books as of the date of this Agreement, the
amount of such write off (not in excess of $10,000,000), to the extent deducted
in calculating Consolidated Net Income, shall be added back to Consolidated Net
Income.

(b) Notwithstanding the limitations in clause (ii) of the foregoing
paragraph (a), the Company may purchase or redeem its common stock for cash in
an amount not to exceed $10,000,000; provided that after giving effect to such
purchase or redemption the Company shall not be in default in the observance or
performance of any of the covenants or conditions contained in this Agreement,
including the other limitations in paragraph (a) of this Section 7.7. On the
date of any such purchase or redemption of its common stock, the Company shall
give notice to each holder of the Notes by telecopy, telegram, telex or other
same-day written communication of the number of shares of common stock of the
Company purchased or redeemed and the amount of consideration paid therefor.

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Investments

. The Company will not, directly or indirectly, and will not permit any
Subsidiary to, make any Investment, other than:

Investments in Subsidiaries or in Persons which through such Investments become
Subsidiaries;

Investments in Joint Ventures permitted by Section 7.9;

Investments in direct or indirect obligations of, or obligations unconditionally
guaranteed by, the United States of America or an agency thereof;

Investments in commercial paper maturing within 270 days or less from the date
of issuance and rated in one of the two highest rating classifications by S&P or
Moody's; and

Investments in certificates of deposit of commercial banks located in the United
States of America and having capital, surplus and undivided profits of at least
$150,000,000 and whose long-term debt securities are rated A or better by S&P or
the equivalent by Moody's.

Joint Ventures

.

The Company will not, and will not permit any Subsidiary to, make any Investment
in a Joint Venture if, after giving effect thereto, the then outstanding
Investments of the Company and its Subsidiaries in all Joint Ventures would
exceed 50% of Consolidated Tangible Net Worth.

The Company will not permit the Net Worth of Joint Ventures in which the Company
or any Subsidiary directly or indirectly owns an interest to be less than a
negative $500,000 individually or a negative $1,000,000 in the aggregate.

Sale and Leaseback Transactions

. The Company will not, and will not permit any Subsidiary to, effect any Sale
and Leaseback Transaction unless (i) such Sale and Leaseback Transaction occurs
within 365 days of the date of acquisition of property acquired after the date
of this Agreement or completion of construction on property acquired after the
date of this Agreement, whichever occurs later, (ii) if such Sale and Leaseback
Transaction involves a Capitalized Lease, such Capitalized Lease is permitted
under Sections 7.1 and 7.5 hereof and (iii) such Sale and Leaseback Transaction
is permitted under Section 7.12.

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Merger or Consolidation

. The Company will not, and will not permit any Subsidiary to, merge or
consolidate with, or sell all or substantially all of its assets to, any Person,
except that:

The Company may merge into or consolidate with, or sell all or substantially all
of its assets to, any Person or permit any Person to merge into it, provided
that immediately after giving effect thereto,

The Company is the successor corporation or, if the Company is not the successor
corporation, the successor corporation is a solvent corporation organized under
the laws of a state of the United States of America having substantially all of
its assets in the United States of America and expressly assumes in writing the
Company's obligations under the Notes and this Agreement;

There shall exist no Default or Event of Default; and

The Company or such successor corporation could incur at least $1.00 of
additional Indebtedness under Sections 7.1 and 7.5(d); and

Any Subsidiary may (i) merge into the Company or a Wholly-Owned Subsidiary or
(ii) sell, transfer or lease all or any part of its assets to the Company or a
Wholly-Owned Subsidiary or (iii) merge into any Person which, as a result of
such merger, becomes a Wholly-Owned Subsidiary, or (iv) merge with any Person
which does not become a Subsidiary as a result of such merger so long as such
merger is otherwise permitted by Section 7.12; provided in each instance set
forth in clauses (i) through (iv) that immediately before and after giving
effect thereto there shall exist no Default or Event of Default and the Company
could incur at least $1.00 of additional Indebtedness under Sections 7.1 and
7.5(d); provided further that, if the Company is the party to a merger of the
type described in clause (iv), the successor is a solvent corporation organized
under the laws of a state of the United States of America and expressly assumes
the Company's obligations under the Notes and this Agreement.

Sale of Assets

. The Company will not, and will not permit any Subsidiary to, sell, lease,
transfer or otherwise (including by way of merger) dispose of (collectively, a
"Disposition") any assets, including any shares of capital stock of Subsidiaries
or any Sale and Leaseback Transaction, in one or a series of transactions, other
than in the ordinary course of business, to any Person, except to the Company or
a Wholly-Owned Subsidiary, (i) if, in any fiscal year, after giving effect to
such Disposition, the aggregate net book value of assets subject to Dispositions
during such fiscal year would exceed 10% of Consolidated Total Assets as of the
end of the immediately preceding fiscal year or (ii) if, after giving effect to
such Disposition, the aggregate net book value of assets subject to Dispositions
during the period commencing on the Closing Date and ending on the date of such
Disposition would exceed 35% of Consolidated Total assets as of the end of the
immediately preceding fiscal year or (iii) if a Default or Event of Default
exists;
provided
, that such Disposition shall not be subject to or included in the foregoing
limitation and computation in clause (i) if the net proceeds of such Disposition
are (x) reinvested in productive assets of a similar nature and at least
equivalent value within 12 months of such Disposition, or (y) applied to reduce
Indebtedness of the Company or its Subsidiaries, including the Notes (other than
Indebtedness that by its terms is subordinate to the Notes), on a

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pro rata basis, and in the case of those proceeds applied to reduce the Notes,
the procedures for optional prepayments set forth in Sections 2.2(a) and 2.3
shall apply; and provided further that clause (i) above shall not apply to the
sale of receivables of the Company or any Subsidiary without recourse to
Donnelly Receivables Corporation, a Michigan corporation ("Donnelly
Receivables"), a special purpose entity all of the outstanding shares of which
are owned directly by the Company, for the purpose of allowing Donnelly
Receivables to provide for the securitization of such receivables, provided that
(A) the investment of any person or persons arising as a result of the purchase
of an interest in the receivables, when aggregated with the remaining unpaid
investment of such other person or persons in respect of all such prior
purchases shall not exceed $75,000,000; (B) such purchases of interests in the
receivables are for all cash consideration representing reasonably equivalent
value whether payable immediately or on a deferred basis and (C) such sale from
the Company to Donnelly Receivables qualifies for and is treated by the Company
as a true sale under Financial Accounting Standards Board Statement No. 125 and
GAAP.

Disposition of Stock or Indebtedness of Subsidiaries

. The Company will not, and will not permit any Subsidiary to, issue, sell or
transfer the capital stock or Indebtedness of a Subsidiary to any Person other
than the Company or a Wholly-Owned Subsidiary if such issuance, sale or transfer
would cause it to cease to be a Subsidiary, unless (i) all shares of capital
stock of such Subsidiary and all Indebtedness of such Subsidiary owned by the
Company and by every other Subsidiary shall simultaneously be sold, transferred
or otherwise disposed of (except that the Company or a Subsidiary need not
simultaneously sell, transfer or otherwise dispose of all shares of capital
stock of one or more other Subsidiaries if the aggregate net book value of the
assets of all such Subsidiaries does not exceed $15,000,000), (ii) such
Subsidiary does not thereafter own any shares of capital stock or Indebtedness
of the Company or another Subsidiary and (iii) such sale would not be prohibited
under Section 7.12.

Transactions with Affiliates

. The Company will not, and will not permit any Subsidiary to, enter into any
transaction (including the furnishing of goods or services) with an Affiliate,
except in the ordinary course of business as presently conducted and on terms
and conditions no less favorable to the Company or such Subsidiary than would be
obtained in a comparable arm's-length transaction with a Person not an
Affiliate.

Consolidated Tax Returns

. The Company will not file, or consent to the filing of, any consolidated
Federal income tax return with any Person other than a Subsidiary, except to the
extent that the Company is required under the Code to do otherwise.

Nature of Business

. The Company will not, and will not permit any Subsidiary to, enter into any
business which is substantially different from that presently conducted by them.

EVENTS OF DEFAULT AND REMEDIES THEREFOR

Nature of Events

. An "Event of Default" shall exist if any one or more of the following occurs:

Any default in the payment of interest when due on any of the Notes which is not
remedied within 3 days;

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Any default in the payment of the principal of any of the Notes or the
Make-Whole Amount, if any, at maturity, upon acceleration of maturity or at any
date fixed for prepayment;

Any default (i) in the payment of the principal of, or interest or premium on,
any other Indebtedness of the Company and its Subsidiaries aggregating in excess
of $1,000,000 as and when due and payable (whether by lapse of time,
declaration, call for redemption or otherwise) and the continuation of such
default beyond the period of grace, if any, allowed with respect thereto, or
(ii) (other than a payment default) under any mortgages, agreements or other
instruments of the Company and its Subsidiaries under or pursuant to which such
Indebtedness aggregating in excess of $1,000,000 is issued and the continuation
of such default beyond the period of grace, if any, allowed with respect
thereto, or (iii) with respect to any combination of the foregoing involving
Indebtedness in excess of $1,000,000.

Any default in the observance or performance of any of the covenants or
conditions contained in Sections 6.8 and Sections 7.1 through 7.15 which is not
remedied within 10 days;

Any default in the observance or performance of Section 7.16 or any other
covenant or provision of this Agreement which is not remedied within 30 days
after written notice thereof to the Company by any holder of a Note;

Any representation or warranty made by the Company in this Agreement, or made by
the Company in any written statement or certificate furnished by the Company in
connection with the issuance and sale of the Notes or furnished by the Company
pursuant to this Agreement, proves incorrect as of the date of the issuance or
making thereof;

Any judgment, writ or warrant of attachment or any similar process in an
aggregate amount in excess of $1,000,000 shall be entered or filed against the
Company or any Subsidiary or against any property or assets of either and remain
unpaid, unvacated, unbonded or unstayed (through appeal or otherwise) for a
period of 60 days after the Company or any Subsidiary receives notice thereof;

The Company or any Subsidiary shall

generally not pay its debts as they become due or admit in writing its inability
to pay its debts generally as they become due;

file a petition in bankruptcy or for reorganization or for the adoption of an
arrangement under the Federal Bankruptcy Code, or any similar applicable
bankruptcy or insolvency law, as now or in the future amended (herein
collectively called "Bankruptcy Laws"); file an answer or other pleading
admitting or failing to deny the material allegations of such a petition; fail
to obtain the dismissal of such a petition within 60 days of its filing or be
subject to an order for relief or a decree approving such a petition; or file an
answer or other pleading seeking, consenting to or acquiescing in relief
provided for under the Bankruptcy Laws;

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make an assignment of all or a substantial part of its property for the benefit
of its creditors;

seek or consent to or acquiesce in the appointment of a receiver, liquidator,
custodian or trustee of it or for all or a substantial part of its property;

be finally adjudicated bankrupt or insolvent;

be subject to the entry of a court order, which shall not be vacated, set aside
or stayed within 60 days of the date of entry, (A) appointing a receiver,
liquidator, custodian or trustee of it or for all or a substantial part of its
property, or (B) for relief pursuant to an involuntary case brought under, or
effecting an arrangement in, bankruptcy or (C) for a reorganization pursuant to
the Bankruptcy Laws or (D) for any other judicial modification or alteration of
the rights of creditors; or

be subject to the assumption of custody or sequestration by a court of competent
jurisdiction of all or a substantial part of its property, which custody or
sequestration shall not be suspended or terminated within 60 days from its
inception.

Remedies on Default

. When any Event of Default described in paragraphs (a) through (g) of
Section 8.1 has occurred and is continuing, the holder or holders of at least
25% in aggregate principal amount of the Notes then outstanding may, by notice
to the Company, declare the entire principal together with the Make-Whole Amount
(to the extent permitted by law) and all interest accrued on all Notes to be,
and such Notes shall thereupon become, forthwith due and payable, without any
presentment, demand, protest or other notice of any kind, all of which are
expressly waived. Notwithstanding the foregoing, (i) when any Event of Default
described in paragraph (a) or (b) of Section 8.1 has occurred and is continuing,
any holder may by notice to the Company declare the entire principal, together
with the Make-Whole Amount (to the extent permitted by law) and all interest
accrued on the Notes then held by such holder to be, and such Notes shall
thereupon become, forthwith due and payable, without any presentment, demand,
protest or other notice of any kind, all of which are expressly waived, and
(ii) when any Event of Default described in paragraph (h) of Section 8.1 has
occurred, then the entire principal, together with the Make-Whole Amount (to the
extent permitted by law) and all interest accrued on all outstanding Notes shall
immediately become due and payable without presentment, demand or notice of any
kind. Upon the Notes or any of them becoming due and payable as aforesaid, the
Company will forthwith pay to the holders of such Notes the entire principal of
and interest accrued on such Notes, plus the Make-Whole Amount (to the extent
permitted by law) which shall be calculated on the Determination Date.

Annulment of Acceleration of Notes

. The provisions of Section 8.2 are subject to the condition that if the
principal of and accrued interest on the Notes have been declared immediately
due and payable by reason of the occurrence of any Event of Default described in
paragraphs (a) through (h), inclusive, of Section 8.1, the holder or holders of
at least 76% in aggregate principal amount of the Notes then outstanding may, by
written instrument filed with the Company, rescind and annul such declaration
and the consequences thereof, provided that (i) at the time such declaration is
annulled and rescinded no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement, (ii) all arrears of

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interest upon all the Notes and all other sums payable under the Notes and under
this Agreement (except any principal or interest on the Notes which has become
due and payable solely by reason of such declaration under Section 8.2) shall
have been duly paid and (iii) each and every Default or Event of Default shall
have been cured or waived; and provided further, that no such rescission and
annulment shall extend to or affect any subsequent Default or Event of Default
or impair any right consequent thereto.

Other Remedies

. If any Event of Default shall be continuing, any holder of Notes may enforce
its rights by suit in equity, by action at law, or by any other appropriate
proceedings, whether for the specific performance (to the extent permitted by
law) of any covenant or agreement contained in this Agreement or in the Notes or
in aid of the exercise of any power granted in this Agreement, and may enforce
the payment of any Note held by such holder and any of its other legal or
equitable rights.

Conduct No Waiver; Collection Expenses

. No course of dealing on the part of any holder of Notes, nor any delay or
failure on the part of any holder of Notes to exercise any of its rights, shall
operate as a waiver of such rights or otherwise prejudice such holder's rights,
powers and remedies. If the Company fails to pay, when due, the principal of,
the Make-Whole Amount, if any, or the interest on, any Note, or fails to comply
with any other provision of this Agreement, the Company will pay to each holder,
to the extent permitted by law, on demand, such further amounts as shall be
sufficient to cover the cost and expenses, including but not limited to
reasonable attorneys' fees, incurred by such holders of the Notes in collecting
any sums due on the Notes or in otherwise enforcing any of their rights incident
to an Event of Default.

Remedies Cumulative

. No right or remedy conferred upon or reserved to any holder of Notes under
this Agreement is intended to be exclusive of any other right or remedy, and
every right and remedy shall be cumulative and in addition to every other right
or remedy given under this Agreement or now or hereafter existing under any
applicable law. Every right and remedy given by this Agreement or by applicable
law to any holder of Notes may be exercised from time to time and as often as
may be deemed expedient by such holder, as the case may be.

Notice of Default

. With respect to Defaults, Events of Default or claimed defaults, the Company
will give the following notices:

The Company promptly, but in any event within 5 days, will furnish to each
holder of a Note written notice of the occurrence of a Default or an Event of
Default. Such notice shall specify the nature of such default, the period of
existence thereof and what action the Company has taken or is taking or proposes
to take with respect thereto.

If the holder of any Note or of any other evidence of Indebtedness of the
Company or any Subsidiary gives any notice or takes any other action with
respect to a claimed default, the Company will forthwith give written notice
thereof to each holder of the then outstanding Notes, describing the notice or
action and the nature of the claimed default.

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AMENDMENTS, WAIVERS AND CONSENTS

Matters Subject to Modification

. Any term, covenant, agreement or condition of this Agreement may, with the
consent of the Company, be amended, or compliance therewith may be waived
(either generally or in a particular instance and either retroactively or
prospectively), if the Company shall have obtained the consent in writing of the
holder or holders of at least 66-2/3% in aggregate principal amount of
outstanding Notes; provided, however, that, without the written consent of the
holder or holders of all of the Notes then outstanding, no such waiver,
modification, alteration or amendment shall be effective which will (i) change
the time of payment (including any required prepayment or optional prepayment)
of the principal of or the interest on any Note, (ii) change the principal
amount thereof or the Make-Whole Amount, or change the rate of interest thereon,
(iii) change any provision of any instrument affecting the preferences between
holders of the Notes or between holders of the Notes and other creditors of the
Company, or (iv) change any of the provisions of Section 8.2, Section 8.3 or
this Section 9.

For the purpose of determining whether holders of the requisite principal amount
of Notes have made or concurred in any waiver, consent, approval, notice or
other communication under this Agreement, Notes held in the name of, or owned
beneficially by, the Company, any Subsidiary or any Affiliate thereof, shall not
be deemed outstanding.

Solicitation of Holders of Notes

. The Company will not solicit, request or negotiate for or with respect to any
proposed waiver or amendment of any of the provisions of this Agreement or the
Notes unless each holder of the Notes (irrespective of the amount of Notes then
owned by it) shall concurrently be informed thereof by the Company and shall be
afforded the opportunity of considering the same and shall be supplied by the
Company with sufficient information to enable it to make an informed decision
with respect thereto. Executed or true and correct copies of any waiver or
consent effected pursuant to the provisions of this Section 9 shall be delivered
by the Company to each holder of outstanding Notes forthwith following the date
on which the same shall have been executed and delivered by the holder or
holders of the requisite percentage of outstanding Notes. 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, to any holder of the
Notes as consideration for or as an inducement to the entering into by any
holder of the Notes of any waiver or amendment of any of the terms and
provisions of this Agreement unless such remuneration is concurrently paid, on
the same terms, ratably to each holder of the then outstanding Notes.

Binding Effect

. Any such amendment or waiver shall apply equally to all the holders of the
Notes and shall be binding upon them, upon each future holder of any Note and
upon the Company whether or not such Note shall have been marked to indicate
such amendment or waiver. No such amendment or waiver shall extend to or affect
any obligation not expressly amended or waived or impair any right related
thereto.

FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT

Form of Notes

. Each Note initially delivered under this Agreement will be in the form of a
fully registered Note in the form attached as Exhibit A. The Notes are issuable
only in fully registered form and in denominations of at least $200,000 (or the
remaining outstanding balance thereof, if less than $200,000).

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Note Register

. The Company shall cause to be kept at its principal office a register (the
"Note Register") for the registration and transfer of the Notes. The names and
addresses of the holders of Notes, the transfer thereof and the names and
addresses of the transferees of the Notes shall be registered in the Note
Register. The Company may deem and treat the person in whose name a Note is so
registered as the holder and owner thereof for all purposes and shall not be
affected by any notice to the contrary, until due presentment of such Note for
registration of transfer as provided in this Section 10.

Issuance of New Notes upon Exchange or Transfer

. Upon surrender for exchange or registration of transfer of any Note at the
office of the Company designated for notices in accordance with Section 11.2,
the Company shall execute and deliver, at its expense, one or more new Notes of
any authorized denominations requested by the holder of the surrendered Note,
each dated the date to which interest has been paid on the Notes so surrendered
(or, if no interest has been paid, the date of such surrendered Note), but in
the same aggregate unpaid principal amount as such surrendered Note, and
registered in the name of such person or persons as shall be designated in
writing by such holder. Every Note surrendered for registration of transfer
shall be duly endorsed, or be accompanied by a written instrument of transfer
duly executed, by the holder of such Note or by his attorney duly authorized in
writing. The Company may condition its issuance of any new Note in connection
with a transfer by any Person on compliance with Section 3.2, by Institutional
Holders on compliance with Section 2.5 and on the payment to the Company of a
sum sufficient to cover any stamp tax or other governmental charge imposed in
respect of such transfer.

Replacement of Notes

. Upon receipt of evidence satisfactory to the Company of the loss, theft,
mutilation or destruction of any Note, and in the case of any such loss, theft
or destruction upon delivery of a bond of indemnity in such form and amount as
shall be reasonably satisfactory to the Company or in the event of such
mutilation upon surrender and cancellation of the Note, the Company, without
charge to the holder thereof, will make and deliver a new Note, of like tenor in
lieu of such lost, stolen, destroyed or mutilated Note. If any such lost, stolen
or destroyed Note is owned by you or any other Institutional Holder, then the
affidavit of an authorized officer of such owner setting forth the fact of such
loss, theft or destruction and of its ownership of the Note at the time of such
loss, theft or destruction shall be accepted as satisfactory evidence thereof,
and no further indemnity shall be required as a condition to the execution and
delivery of a new Note, other than a written agreement of such owner (in form
reasonably satisfactory to the Company) to indemnify the Company.

MISCELLANEOUS

Expenses

. The Company agrees to pay directly all expenses in connection with the
preparation, execution and delivery of this Agreement and the transactions
contemplated by this Agreement, including, but not limited to, out-of-pocket
expenses, charges and disbursements of special counsel, photocopying and
printing costs and charges for shipping the Notes, adequately insured, to you at
your home office or at such other address as you may designate, and all similar
expenses (including the fees and expenses of counsel) relating to any

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amendments, waivers or consents in connection with this Agreement or the Notes,
including, but not limited to, any such amendments, waivers or consents
resulting from any work-out, renegotiation or restructuring relating to the
performance by the Company of its obligations under this Agreement and the
Notes. The Company also agrees that it will pay and save you harmless against
any and all liability with respect to stamp and other documentary taxes, if any,
which may be payable, or which may be determined to be payable in connection
with the execution and delivery of this Agreement or the Notes (but not in
connection with a transfer of any Notes), whether or not any Notes are then
outstanding. The obligations of the Company under this Section 11.1 shall
survive the retirement of the Notes.

Notices

. Except as otherwise expressly provided herein, all notices provided for in
this Agreement shall be in writing and delivered or sent by registered or
certified mail, return receipt requested, by overnight courier, or by facsimile,
but all other communications may be sent by regular mail, in each case (i) if to
you, to the address set forth below your name in Schedule I, or to such other
address as you may in writing designate, (ii) if to any other holder of the
Notes, to such address as the holder may designate in writing to the Company,
and (iii) if to the Company, to Donnelly Corporation, 49 West Third Street,
Holland, Michigan 49423-2813, Attention: Treasurer, or to such other address as
the Company may in writing designate.

Reproduction of Documents

. This Agreement and all documents relating hereto, including, without
limitation, (i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received by you at the closing of the purchase of the
Notes (except the Notes themselves), and (iii) financial statements,
certificates and other information previously or hereafter furnished to you, may
be reproduced by you by any photographic, photostatic, microfilm, micro-card,
miniature photographic or other similar process, and you may destroy any
original document so reproduced. The Company agrees and stipulates that any such
reproduction which is legible 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 you in the
regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence;
provided that nothing herein contained shall preclude the Company from objecting
to the admission of any reproduction on the basis that such reproduction is not
accurate, has been altered or is otherwise incomplete.

Successors and Assigns

. This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.

Law Governing

. This Agreement shall be governed by and construed in accordance with the laws
of the State of Illinois.

Headings

. The headings of the sections and subsections of this Agreement are inserted
for convenience only and do not constitute a part of this Agreement.

Counterparts

. This Agreement may be executed simultaneously in one or more counterparts,
each of which shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument, and it shall not be necessary
in making proof of this Agreement to produce or account for more than one such
counterpart or reproduction thereof permitted by Section 11.3.

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Reliance on and Survival of Provisions

. All written covenants, representations and warranties made by the Company
herein and in any certificates delivered pursuant to this Agreement, whether or
not in connection with a closing, (i) shall be presumed to have been relied upon
by you, notwithstanding any investigation heretofore or hereafter made by you or
on your behalf and (ii) shall survive the delivery of this Agreement and the
Notes.

Integration and Severability

. This Agreement embodies the entire agreement and understanding between you and
the Company, and supersedes all prior agreements and understandings relating to
the subject matter hereof. In case any one or more of the provisions contained
in this Agreement or in any Note, or application thereof, shall be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this Agreement and in
any Note, and any other application thereof, shall not in any way be affected or
impaired thereby.

(The remainder of this page is intentionally left blank.)

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IN WITNESS WHEREOF, the Company and the Purchasers have caused this Agreement to
be executed and delivered by their respective officer or officers thereunto duly
authorized.

DONNELLY CORPORATION

By:

Name:

Title:

By:

Name:

Title:

 

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JOHN HANCOCK LIFE INSURANCE COMPANY

By:

Name:

Title:

 

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

By:

Name:

Title:

INVESTORS PARTNER LIFE INSURANCE COMPANY

By:

Name:

Title:

 

MARITIME LIFE ASSURANCE COMPANY
By: John Hancock Life Insurance Company, as Investment Manager

By:

Name:

Title:

 

MELLON BANK, N.A., solely in its capacity as
Trustee for the Bell Atlantic Master Trust (as
directed by John Hancock Life Insurance Company),
and not in its individual capacity

By:

Name:

Title:

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EXHIBIT A

 

DONNELLY CORPORATION

7.60% SENIOR NOTE

Due May 2, 2012

 

 

THIS NOTE MAY BE SUBJECT TO A HOME OFFICE PAYMENT AGREEMENT AND ACCORDINGLY ANY
PROSPECTIVE PURCHASER SHOULD FIRST VERIFY THE UNPAID PRINCIPAL AMOUNT WITH THE
COMPANY.

 

 

Registered Note No. R-__ ,

$______________ PPN: 257870 C@2

 

DONNELLY CORPORATION, a Michigan corporation (the "Company"), for value
received, promises to pay to ____________________ or registered assigns, on May
2, 2012, the principal amount of ____________ Dollars ($__________) and to pay
interest (computed on the basis of a 360-day year of twelve 30-day months) on
the principal amount from time to time remaining unpaid hereon at the rate of
7.60% per annum from the date hereof until maturity, payable on May 2 and
November 2 in each year, commencing November 2, 2002, and at maturity, and to
pay interest on any overdue principal, on any overdue Make-Whole Amount and (to
the extent legally enforceable) on any overdue installment of interest at a per
annum rate of 9.60% until paid. Payments of the principal of, the Make-Whole
Amount, if any, and the interest on this Note shall be made in lawful money of
the United States of America in the manner and at the place provided in
Section 2.5 of the Note Agreement hereinafter defined.

This Note is issued under and pursuant to the terms and provisions of the Note
Agreement, dated as of May 15, 2002, entered into by the Company with the
Purchasers named in Schedule I thereto (the "Note Agreement"), and this Note and
any holder hereof are entitled to all of the benefits provided for by such Note
Agreement or referred to therein. Reference is made to the Note Agreement for a
statement of such benefits.

As provided in the Note Agreement, upon surrender of this Note for registration
of transfer, duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder hereof or its attorney duly authorized in
writing, a new Note for a like unpaid principal amount will be issued to, and
registered in the name of, the transferee upon the payment of the taxes or other
governmental charges, if any, that may be imposed in connection therewith. The
Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Company shall not be affected by any notice to the contrary.

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This Note may be declared due prior to its expressed maturity date, voluntary
prepayments may be made hereon and certain prepayments are required to be made
hereon all in the events, on the terms and in the manner as provided in the Note
Agreement. Such prepayments include certain required prepayments on May 2 and
November 2 of each year commencing May 2, 2006 through May 2, 2012, inclusive,
with the remaining principal payable on May 2, 2012, and certain optional
prepayments with a Make-Whole Amount or premium.

Should the indebtedness represented by this Note or any part thereof be
collected in any proceeding provided for in the Note Agreement or be placed in
the hands of attorneys for collection, the Company agrees to pay, in addition to
the principal, Make-Whole Amount or premium, if any, and interest due and
payable hereon, all costs of collecting this Note, including reasonable
attorneys' fees and expenses.

This Note and the Note Agreement are governed by and construed in accordance
with the laws of the State of Illinois.

 

DONNELLY CORPORATION

 

 

By:

Name:

Title:

 

By:

Name:

Title:

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