Exhibit 4.1


 


EXECUTION VERSION


 










 


OWENS-BROCKWAY
GLASS CONTAINER INC.


 


Issuer


 


and


 


The Guarantors
set forth in Annex A attached hereto


 










 


INDENTURE


 


dated as of May 12,
2009


 










 


U.S. Bank
National Association


 


Trustee


 






 





















 


TABLE OF
CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1. DEFINITIONS AND INCORPORATION BY
  REFERENCE

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
  Certain
  Definitions

  	
  1

  
	
  Section 1.02.

  	
  Other
  Definitions

  	
  20

  
	
  Section 1.03.

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
  21

  
	
  Section 1.04.

  	
  Rules of
  Construction

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2. THE SECURITIES

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  Unlimited in
  Amount, Form and Dating

  	
  21

  
	
  Section 2.02.

  	
  Execution
  and Authentication

  	
  23

  
	
  Section 2.03.

  	
  Registrar
  and Paying Agent

  	
  23

  
	
  Section 2.04.

  	
  Paying Agent
  to Hold Money in Trust

  	
  24

  
	
  Section 2.05.

  	
  Holder Lists

  	
  24

  
	
  Section 2.06.

  	
  Transfer and
  Exchange

  	
  24

  
	
  Section 2.07.

  	
  Replacement
  Notes

  	
  36

  
	
  Section 2.08.

  	
  Outstanding
  Notes

  	
  37

  
	
  Section 2.09.

  	
  Temporary
  Notes

  	
  37

  
	
  Section 2.10.

  	
  Cancellation

  	
  37

  
	
  Section 2.11.

  	
  Defaulted
  Interest

  	
  38

  
	
  Section 2.12.

  	
  Special
  Record Dates

  	
  38

  
	
  Section 2.13.

  	
  CUSIP and
  ISIN Numbers

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3. REDEMPTION

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Notices to
  Trustee

  	
  39

  
	
  Section 3.02.

  	
  Selection of
  Notes to Be Redeemed

  	
  39

  
	
  Section 3.03.

  	
  Notice of
  Redemption

  	
  39

  
	
  Section 3.04.

  	
  Effect of
  Notice of Redemption

  	
  40

  
	
  Section 3.05.

  	
  Deposit of
  Redemption Price

  	
  40

  
	
  Section 3.06.

  	
  Notes
  Redeemed in Part

  	
  41

  
	
  Section 3.07.

  	
  Optional
  Redemption

  	
  41

  
	
  Section 3.08.

  	
  Mandatory
  Redemption

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4. COVENANTS

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Payment of Securities

  	
  42

  
	
  Section 4.02.

  	
  Maintenance
  of Office or Agency

  	
  42

  
	
  Section 4.03.

  	
  Commission
  Reports

  	
  43

  
	
  Section 4.04.

  	
  Compliance
  Certificate

  	
  44

  
	
  Section 4.05.

  	
  Taxes

  	
  44

  
	
  Section 4.06.

  	
  Stay,
  Extension and Usury Laws

  	
  44

  
	
  Section 4.07.

  	
  Corporate
  Existence

  	
  44

  
	
  Section 4.08.

  	
  [Intentionally
  Omitted]

  	
  45

  
	
  Section 4.09.

  	
  Fall-Away
  Event

  	
  45

  
	
  Section 4.10.

  	
  Offer to
  Repurchase Upon a Change of Control

  	
  46

  



 

















 


	
  Section 4.11.

  	
  Asset Sales

  	
  47

  
	
  Section 4.12.

  	
  Restricted
  Payments

  	
  50

  
	
  Section 4.13.

  	
  Incurrence
  of Indebtedness and Issuance of Preferred Stock

  	
  53

  
	
  Section 4.14.

  	
  Liens

  	
  57

  
	
  Section 4.15.

  	
  Dividend and
  Other Payment Restrictions Affecting Restricted Subsidiaries

  	
  58

  
	
  Section 4.16.

  	
  Transactions
  with Affiliates

  	
  59

  
	
  Section 4.17.

  	
  Payments for
  Consent

  	
  61

  
	
  Section 4.18.

  	
  Designation
  of Restricted and Unrestricted Subsidiaries

  	
  61

  
	
  Section 4.19.

  	
  Limitations
  on Issuances of Guarantees of Indebtedness

  	
  61

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5. SUCCESSORS

  	
  61

  
	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  When OI
  Group May Merge, Etc.

  	
  61

  
	
  Section 5.02.

  	
  Successor
  Corporation Substituted

  	
  62

  
	
  Section 5.03.

  	
  Assignment
  of Obligations

  	
  63

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6. DEFAULTS AND
  REMEDIES

  	
  63

  
	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
  Events of
  Default

  	
  63

  
	
  Section 6.02.

  	
  Acceleration

  	
  65

  
	
  Section 6.03.

  	
  Other
  Remedies

  	
  65

  
	
  Section 6.04.

  	
  Waiver of
  Past Defaults

  	
  66

  
	
  Section 6.05.

  	
  Control by
  Majority

  	
  66

  
	
  Section 6.06.

  	
  Limitation
  on Suits

  	
  66

  
	
  Section 6.07.

  	
  Rights of
  Holders to Receive Payment

  	
  67

  
	
  Section 6.08.

  	
  Collection
  Suit by Trustee

  	
  67

  
	
  Section 6.09.

  	
  Trustee
  May File Proofs of Claim

  	
  67

  
	
  Section 6.10.

  	
  Priorities

  	
  67

  
	
  Section 6.11.

  	
  Undertaking
  for Costs

  	
  68

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7. TRUSTEE

  	
  68

  
	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Duties of
  Trustee

  	
  68

  
	
  Section 7.02.

  	
  Rights of
  Trustee

  	
  69

  
	
  Section 7.03.

  	
  Individual
  Rights of Trustee

  	
  71

  
	
  Section 7.04.

  	
  Trustee’s
  Disclaimer

  	
  71

  
	
  Section 7.05.

  	
  Notice of
  Defaults

  	
  71

  
	
  Section 7.06.

  	
  Reports by
  Trustee to Holders

  	
  71

  
	
  Section 7.07.

  	
  Compensation
  and Indemnity

  	
  71

  
	
  Section 7.08.

  	
  Replacement
  of Trustee

  	
  72

  
	
  Section 7.09.

  	
  Successor
  Trustee by Merger, Etc.

  	
  73

  
	
  Section 7.10.

  	
  Eligibility;
  Disqualification

  	
  73

  
	
  Section 7.11.

  	
  Preferential
  Collection of Claims Against Company

  	
  73

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8. SATISFACTION AND
  DISCHARGE; DEFEASANCE

  	
  73

  
	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Satisfaction
  and Discharge of Indenture

  	
  73

  
	
  Section 8.02.

  	
  Application
  of Trust Funds; Indemnification

  	
  74

  



 


v

















 


	
  Section 8.03.

  	
  Legal
  Defeasance of Notes

  	
  75

  
	
  Section 8.04.

  	
  Covenant
  Defeasance

  	
  77

  
	
  Section 8.05.

  	
  Repayment to
  Company

  	
  78

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9. SUPPLEMENTS,
  AMENDMENTS AND WAIVERS

  	
  78

  
	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
  Without
  Consent of Holders

  	
  78

  
	
  Section 9.02.

  	
  With Consent
  of Holders

  	
  79

  
	
  Section 9.03.

  	
  Revocation
  and Effect of Consents

  	
  80

  
	
  Section 9.04.

  	
  Notation on
  or Exchange of Notes

  	
  80

  
	
  Section 9.05.

  	
  Trustee to
  Sign Amendments, Etc.

  	
  81

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10. GUARANTEE

  	
  81

  
	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
  Guarantee

  	
  81

  
	
  Section 10.02.

  	
  Limitation
  on Liability

  	
  82

  
	
  Section 10.03.

  	
  Execution
  and Delivery of Guarantee

  	
  83

  
	
  Section 10.04.

  	
  Successors and Assigns

  	
  83

  
	
  Section 10.05.

  	
  No Waiver

  	
  83

  
	
  Section 10.06.

  	
  Right of
  Contribution

  	
  83

  
	
  Section 10.07.

  	
  No
  Subrogation

  	
  84

  
	
  Section 10.08.

  	
  Additional
  Guarantors; Reinstatement of Guarantees

  	
  84

  
	
  Section 10.09.

  	
  Modification

  	
  84

  
	
  Section 10.10.

  	
  Release of
  Guarantor

  	
  85

  
	
  Section 10.11.

  	
  Merger,
  Consolidation and Sale of Assets of a Guarantor

  	
  85

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11. MISCELLANEOUS

  	
  86

  
	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Indenture
  Subject to Trust Indenture Act

  	
  86

  
	
  Section 11.02.

  	
  Notices

  	
  86

  
	
  Section 11.03.

  	
  Communication
  by Holders with Other Holders

  	
  87

  
	
  Section 11.04.

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
  87

  
	
  Section 11.05.

  	
  Statements
  Required in Certificate or Opinion

  	
  87

  
	
  Section 11.06.

  	
  Rules by
  Trustee and Agents

  	
  88

  
	
  Section 11.07.

  	
  Legal
  Holidays

  	
  88

  
	
  Section 11.08.

  	
  No Recourse
  Against Others

  	
  88

  
	
  Section 11.09.

  	
  Counterparts

  	
  88

  
	
  Section 11.10.

  	
  Governing
  Law

  	
  89

  
	
  Section 11.11.

  	
  Severability

  	
  89

  
	
  Section 11.12.

  	
  Effect of
  Headings, Table of Contents, Etc.

  	
  89

  
	
  Section 11.13.

  	
  Successors
  and Assigns

  	
  89

  
	
  Section 11.14.

  	
  No
  Interpretation of Other Agreements

  	
  89

  



 


vi

















 


CROSS-REFERENCE
TABLE*


 


	
  Trust Indenture

  Act Section

  	
   

  	
  

  Indenture Section

  
	
  310

  	
  (a)(1)

  	
   

  	
  7.09; 7.10

  
	
   

  	
  (a)(2)

  	
   

  	
  7.10

  
	
   

  	
  (a)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
   

  	
  7.10

  
	
   

  	
  (b)

  	
   

  	
  7.03, 7.08; 7.10

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  311

  	
  (a)

  	
   

  	
  7.11

  
	
   

  	
  (b)

  	
   

  	
  7.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  312

  	
  (a)

  	
   

  	
  2.05

  
	
   

  	
  (b)

  	
   

  	
  11.03

  
	
   

  	
  (c)

  	
   

  	
  11.03

  
	
  313

  	
  (a)

  	
   

  	
  7.06

  
	
   

  	
  (b)

  	
   

  	
  7.06

  
	
   

  	
  (c)

  	
   

  	
  7.06; 11.02

  
	
   

  	
  (d)

  	
   

  	
  7.06

  
	
  314

  	
  (a)

  	
   

  	
  4.03

  
	
   

  	
  (c)(1)

  	
   

  	
  11.04

  
	
   

  	
  (c)(2)

  	
   

  	
  11.04

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (e)

  	
   

  	
  11.05

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  315

  	
  (a)

  	
   

  	
  7.01(b)(ii); 7.02

  
	
   

  	
  (b)

  	
   

  	
  7.02; 7.05; 11.02

  
	
   

  	
  (c)

  	
   

  	
  7.01(a); 7.02

  
	
   

  	
  (d)

  	
   

  	
  7.01(d); 7.02

  
	
   

  	
  (e)

  	
   

  	
  6.11

  
	
  316

  	
  (a)(last
  sentence)

  	
   

  	
  2.08

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.07

  
	
   

  	
  (c)

  	
   

  	
  2.12; 9.03

  
	
  317

  	
  (a)(1)

  	
   

  	
  6.08

  
	
   

  	
  (a)(2)

  	
   

  	
  6.09

  
	
   

  	
  (b)

  	
   

  	
  2.04

  
	
  318

  	
  (a)

  	
   

  	
  11.01

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)

  	
   

  	
  11.01

  



 






N.A. means not applicable.


 


* THIS
CROSS-REFERENCE TABLE IS NOT PART OF THIS INDENTURE.


 


vii

















 


INDENTURE dated
as of May 12, 2009 among Owens-Brockway Glass Container Inc., a Delaware
corporation (the “Company”), the
Guarantors (as defined herein) and U.S. Bank National Association, a national
banking association, as Trustee (the “Trustee”).


 


The Company
and the Guarantors have duly authorized the execution and delivery of this
Indenture to provide for the issuance by the Company of securities to be
designated as the 73/8% Senior Notes due 2016 in an
unlimited aggregate principal amount (the “Notes”),
on the terms set forth herein.


 


Each party
agrees as follows for the benefit of the other party and for the equal and
ratable benefit of the Holders of the Notes:


 


ARTICLE 1.



DEFINITIONS AND INCORPORATION

BY REFERENCE


 


Section 1.01.                         Certain Definitions.


 


“144A Global Security” means a Global Security
bearing the Global Security Legend, the Private Placement Legend and the OID
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.


 


“Acquired Debt” means, with respect to any
specified Person: (1) Indebtedness of any other Person existing at the
time such other Person is merged with or into or became a Restricted Subsidiary
of such specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging with or
into, or becoming a Restricted Subsidiary of, such specified Person; and (2) Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person.


 


“Additional Interest” means the payment of
additional interest as set forth in the Registration Rights Agreement.


 


“Affiliate” of any specified Person means any
other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For purposes of
this definition, “control,” as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise. For purposes of this
definition, the terms “controlling,” “controlled by” and “under common control
with” shall have correlative meanings.


 


“Agent” means any Registrar, Paying Agent,
authenticating agent or co-Registrar.


 


“Applicable Procedures” means, with respect to
any transfer or exchange of or for beneficial interests in any Global Security,
the rules and procedures of the Depositary, Euroclear and Clearstream that
apply to such transfer or exchange.


 

















 


“Asset Sale” means: (1) the sale, lease,
conveyance or other disposition of any assets; provided
that the sale, conveyance or other disposition of all or substantially all of
the assets of OI Group and its Restricted Subsidiaries taken as a whole shall
be governed by Article 5 and not by Section 4.11; and (2) the
issuance of Equity Interests by any of OI Group’s Restricted Subsidiaries or
the sale of Equity Interests in any of OI Group’s Restricted Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to be
Asset Sales: (1) any single transaction or series of related transactions
that involves assets or Equity Interests having a Fair Market Value of less
than $10.0 million; (2) a transfer of assets between or among OI Group and
its Restricted Subsidiaries; (3) an issuance of Equity Interests by a
Restricted Subsidiary of OI Group to OI Group or to another Restricted
Subsidiary of OI Group; (4) the sale or lease of equipment, inventory,
accounts receivable or other assets in the ordinary course of business; (5) the
sale, lease, conveyance or other disposition of any assets securing the Credit
Agreement in connection with the enforcement of the security interests
contained therein pursuant to the terms of the Intercreditor Agreement; (6) the
sale or other disposition of cash or Cash Equivalents; (7) a Restricted
Payment that is permitted by Section 4.12; and (8) the exchange of
assets held by OI Group or a Restricted Subsidiary of OI Group for assets held
by any Person or entity (including Equity Interests of such Person or entity), provided that (i) the assets received
by OI Group or such Restricted Subsidiary of OI Group in any such exchange
shall immediately constitute, be part of, or be used in a Permitted Business;
and (ii) any such assets received are of a comparable Fair Market Value to
the assets exchanged as determined in good faith by OI Group.


 


“Board Resolution” means (1) with respect
to a corporation, a copy of a resolution certified by the Secretary or an
Assistant Secretary of such corporation to have been duly adopted by the Board
of Directors or pursuant to authorization by the Board of Directors and (2) with
respect to any other Person, a copy of a resolution or similar authorization
certified by the secretary or assistant secretary or a Person serving such a
similar function to have been duly adopted by the board, committee or Person
serving a similar function as a board of directors and in each case to be in
full force and effect on the date of such certification (and delivered to the
Trustee, if appropriate).


 


“Board of Directors” means: (1) with
respect to a corporation, the board of directors of the corporation; (2) with
respect to a partnership, the board of directors of the general partner of the
partnership; and (3) with respect to any other Person, the board or
committee of such Person serving a similar function.


 


“Broker-Dealer” means any broker or dealer
registered with the Commission under the Exchange Act.


 


“Business Days” means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in New York City, New York or Toledo, Ohio are authorized or obligated by law
or executive order to close.


 


“Capital Lease Obligation” means, at the time
any determination thereof is to be made, the amount of the liability in respect
of a capital lease that would at that time be required to be capitalized on a
balance sheet in accordance with GAAP.


 


2

















 


“Capital
Stock” means: (1) in the case of a corporation,
corporate stock; (2) in the case of an association or business entity, any
and all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;  (3) in
the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and (4) any other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing
Person.


 


“Cash Equivalents” means: (1) United
States dollars; (2) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or instrumentality
thereof and (a) backed by the full faith and credit of the United States
or (b) having a rating of at least AAA from S&P or at least Aaa from
Moody’s, in each case maturing not more than one year from the date of
acquisition; (3) securities issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year of the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from either S&P or Moody’s; (4) certificates of deposit and eurodollar
time deposits with maturities of one year or less from the date of acquisition,
bankers’ acceptances with maturities not exceeding one year and overnight bank
deposits, in each case, with any lender under the Credit Agreement or any
domestic commercial bank having capital and surplus of not less than $250.0
million; (5) repurchase and reverse repurchase obligations for underlying
securities of the types described in clauses (2) and (4) above
entered into with any financial institution meeting the qualifications
specified in clause (4) above; (6) commercial paper having the
highest rating obtainable from Moody’s or S&P and in each case maturing
within one year from the date of creation thereof; and (7) money market
funds at least 95% of the assets of which constitute Cash Equivalents of the
kinds described in clauses (1) through (6) of this definition or that
has a rating of at least AAA from S&P or at least Aaa from Moody’s.


 


“Change of Control” means the occurrence of
any of the following: (1) OI Inc. or OI Group becomes aware of (by way of
a report or any other filing pursuant to Section 13(d) of the
Exchange Act, proxy, vote, written notice or otherwise) the acquisition by any
Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act, or any successor provision), including any group acting for
the purpose of acquiring, holding or disposing of securities (within the
meaning of Rule 13d-5(b)(1) under the Exchange Act), in a single
transaction or in a related series of transactions, by way of merger,
consolidation or other business combination or purchase of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act, or any successor
provision) of 35% or more of the total voting power of the Voting Stock of OI
Inc.; or (2) the first day on which a majority of the members of the Board
of Directors of OI Inc. are not Continuing Directors; or (3) the first day
on which OI Inc. fails to own 100% of the issued and outstanding Equity
Interests of OI Group.


 


“Clearstream” means Clearstream Banking, S.A.


 


“Collateral Documents” means, collectively,
the Intercreditor Agreement, the Pledge Agreement and the Security Agreement,
each as in effect on the Issue Date and as amended, amended and restated,
modified, renewed, replaced or restructured from time to time and the Mortgages
each as in effect on the Issue Date and any additional Mortgages created from
time to time, and as amended, amended and restated, modified, renewed or
replaced from time to time.


 


3

















 


“Commission” means the Securities and Exchange Commission.


 


“Company” means the party named as such above until a
successor replaces it pursuant to this Indenture and thereafter means the
successor.


 


“Company
Order” means a written
order signed in the name of the Company by two Officers, one of whom must be
the Company’s principal executive officer, principal financial officer or
principal accounting officer.


 


“Consolidated
Cash Flow” means, with
respect to any specified Person for any period, the Consolidated Net Income of
such Person for such period plus:
(1) an amount equal to any extraordinary loss realized by such Person or
any of its Restricted Subsidiaries in connection with any sale or other
disposition of assets, to the extent such losses were deducted in computing
such Consolidated Net Income; plus (2) provision
for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was
deducted in computing such Consolidated Net Income; plus (3) consolidated interest expense of such Person
and its Restricted Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including without limitation amortization of debt
issuance costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers’ acceptance financings, and net of the effect of all payments made or received
pursuant to Hedging Obligations), to the extent that any such expense was
deducted in computing such Consolidated Net Income; plus (4) depreciation, amortization (including
amortization of goodwill and other intangibles but excluding amortization of
prepaid cash expenses that were paid in a prior period) and other non-cash
charges and expenses (excluding any amortization of a prepaid cash expense that
was paid in a prior period) of such Person and its Restricted Subsidiaries for
such period to the extent that such depreciation, amortization and other
non-cash charges and expenses were deducted in computing such Consolidated Net
Income; minus (5) an amount
equal to any extraordinary gain realized by such Person or any of its
Restricted Subsidiaries in connection with any sale or other disposition of
assets, to the extent such gains were included in computing such Consolidated
Net Income; minus (6) pension
expenses, retiree medical expenses and any other material non cash items
increasing Consolidated Net Income for such period that are disclosed in such
Person’s financial statements, other than accrual of revenue in the ordinary
course of business, in each case without duplication, on a consolidated basis
and determined in accordance with GAAP; minus
(7) net cash payments to OI Inc. by OI Group for (i) claims
of persons for exposure to asbestos containing products and expenses related
thereto and (ii) dividends on any outstanding preferred stock of OI Inc.,
in each case without duplication, on a consolidated basis and determined in
accordance with GAAP.


 


Notwithstanding the
preceding, the provision for taxes based on the income or profits of, and the
depreciation, amortization and other non-cash charges and expenses of, a
Restricted Subsidiary of OI Group shall be added to Consolidated Net Income to
compute Consolidated Cash Flow of OI Group only to the extent that a
corresponding amount would be permitted at the date of determination to be
dividended to OI Group by such Restricted Subsidiary without prior governmental
approval (that has not been obtained), and would not be 


 


4

















 


prohibited,
directly or indirectly, by the operation of the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
stockholders, other than agreements, instruments, judgments, decrees, orders,
statutes, rules and government regulations existing on January 24,
2002.


 


“Consolidated
Net Income” means,
with respect to any specified Person for any period, the aggregate of the Net
Income of such Person and its Restricted Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP; provided that: (1) the Net Income
(but not loss) of any Person that is not a Restricted Subsidiary or that is
accounted for by the equity method of accounting shall be included only to the
extent of the amount of dividends or distributions paid in cash to the
specified Person or a Wholly Owned Restricted Subsidiary of the specified
Person; (2) the Net Income of any Restricted Subsidiary shall be excluded
to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, is prohibited, directly or indirectly, by operation
of the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders, other than agreements, instruments,
judgments, decrees, orders, statutes, rules and government regulations
existing on January 24, 2002; (3) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded; (4) the cumulative effect of a
change in accounting principles under GAAP shall be excluded; (5) all
extraordinary, unusual or nonrecurring gains and losses (including without
limitation any one-time costs incurred in connection with acquisitions)
(together with any related provision for taxes) shall be excluded; (6) any
gain or loss (together with any related provision for taxes) realized upon the
sale or other disposition of any property, plant or equipment of the specified
Person or its Restricted Subsidiaries (including pursuant to any sale and
leaseback arrangement) which is not sold or otherwise disposed of in the
ordinary course of business and any gain or loss (together with any related
provision for taxes) realized upon the sale or other disposition by the
specified Person or any Restricted Subsidiary of the specified Person of any
Capital Stock of any Person or any Asset Sale shall be excluded to the extent
that any such gain or loss exceeds $5.0 million with respect to any one
occurrence or $15.0 million in the aggregate with respect to gains or losses
during any twelve month period; (7) the Net Income of any Unrestricted
Subsidiary shall be excluded, whether or not distributed to the specified
Person or one of its Subsidiaries; and (8) any deduction for minority
owners’ interest in earnings of Subsidiaries shall be excluded.


 


“Continuing
Directors” means, as
of any date of determination, any member of the Board of Directors of OI Inc.,
who:  (1) was a member of such Board
of Directors on the Issue Date; or (2) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.


 


“Corporate Trust Office” shall mean the
corporate trust office of the Trustee, which shall initially be U.S. Bank
National Association, 60 Livingston Avenue, EP-MN-WS3C St. Paul, MN 55107-1419,
Attn:  Corporate Trust Administration and
such office of the Trustee located in the Borough of Manhattan, the City of New
York or such other address as to which the Trustee may give notice to the
Company.


 


5
















 


“Credit
Agreement” means the credit agreement, dated as of June 14,
2006, by and among the Borrowers named therein, OI Group, Owens-Illinois
General, Inc., as Borrower’s Agent, Deutsche Bank AG, New York Branch, as
Administrative Agent, and the Arrangers, the other Agents and the Lenders named
therein or party thereto, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, amended and restated, modified, renewed, refunded,
replaced, substituted or refinanced or otherwise restructured (including but
not limited to, the inclusion of additional borrowers thereunder) from time to
time.


 


“Credit Agreement Domestic Borrowers” means
the Company to the extent at the time of determination the Company is a
borrower under the Credit Agreement and any other Domestic Subsidiary of OI
Group that is, at the relevant time, a borrower under the Credit Agreement.


 


“Credit Facilities” means (1) one or more
debt facilities (including, without limitation, the Credit Agreement) or
commercial paper facilities, in each case with banks or other lenders providing
for revolving credit loans, term loans, bankers acceptances, receivables
financing (including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated,
modified, renewed, refunded, replaced, refinanced or otherwise restructured in
whole or in part from time to time; and (2) notes, debentures or other
financing instruments or any combination thereof incurred after the Issue Date
(“Non-Bank Refinancing”),
including any refinancing thereof, to the extent such Non-Bank Refinancing
replaces, refinances or otherwise restructures Indebtedness under Credit
Facilities.


 


“Default” means any event that is, or with the
passage of time or the giving of notice or both would be, an Event of Default.


 


“Definitive Security” means a certificated
Note registered in the name of the Holder thereof and issued in accordance with
Section 2.06 hereof, except that such Note shall not bear the Global
Security Legend and shall not have a “Schedule of Exchanges of Interests in the
Global Note” attached thereto.


 


“Depositary” means, with respect to the Notes
issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depositary for such Notes by the Company,
which Depositary shall be a clearing agency registered under the Exchange Act.


 


“Designated Noncash Consideration” means the
noncash consideration received by OI Group or one of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
Designated Noncash Consideration pursuant to an Officers’ Certificate setting
forth the basis of such valuation, executed by Officers of OI Group or the
Company, less the amount of cash or Cash Equivalents received in connection
with a subsequent sale of such Designated Noncash Consideration.


 


“Disqualified Stock” means any Capital Stock
that, by its terms (or by the terms of any security into which it is
convertible, or for which it is exchangeable, in each case at the 


 


6

















 


option of the Holder thereof), or upon the happening of any event,
matures or is mandatorily redeemable (other than as a result of a change of
control or asset sale), pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the Holder thereof (other than as a result of a change
of control or asset sale), in whole or in part, on or prior to the date that is
91 days after the date on which the Notes mature or are no longer outstanding.
Notwithstanding the preceding sentence, any Capital Stock that would constitute
Disqualified Stock solely because the Holders thereof have the right to require
OI Group or the Company to repurchase such Capital Stock upon the occurrence of
a change of control or an asset sale shall not constitute Disqualified Stock if
the terms of such Capital Stock provide that OI Group or the Company may not
repurchase or redeem any such Capital Stock pursuant to such provisions unless
such repurchase or redemption complies with Section 4.12.


 


 “Domestic Subsidiary”
means any Restricted Subsidiary of OI Group other than a Foreign Subsidiary.


 


“Equity Interests”
means Capital Stock and all warrants, options or other rights to acquire
Capital Stock (but excluding any debt security that is convertible into, or
exchangeable for, Capital Stock).


 


“Equity Offering” means any public or private
sale of common stock (other than Disqualified Stock) of OI Inc. (other than
public offerings with respect to common stock registered on Form S-8 or
otherwise relating to equity securities issuable under any employee benefit
plan of OI Inc.).


 


“Euroclear”
means Euroclear Bank
S.A./N.V., as operator of the Euroclear system.


 


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


 


“Exchange Offer” has the meaning set forth in
the Registration Rights Agreement.


 


“Exchange Offer Prospectus” means the Prospectus as defined
in the Registration Rights Agreement.


 


“Exchange Offer Registration Statement”
means, with respect to any Initial Securities, the exchange offer registration
statement as defined in the Registration Rights Agreement.


 


“Exchange Securities” means the Notes issued in exchange for
any Initial Securities in an Exchange Offer pursuant to Section 2.06(f).


 


“Existing Indebtedness” means the aggregate
principal or commitment amount of Indebtedness of OI Group and its Subsidiaries
(other than Indebtedness under the Credit Agreement) in existence on the Issue
Date, until such amounts are repaid or terminated.


 


7

















 


“Existing Senior Notes” means the Company’s 81/4%
Senior Notes due 2013 and its 63/4% Senior
Notes due 2014 and OI European Group B.V.’s 67/8% Senior
Notes due 2017.


 


“Fair
Market Value” means, with respect to any asset or
property, the price which could be negotiated in an arm’s-length transaction,
for cash, between a willing seller and a willing and able buyer, neither of
whom is under pressure or compulsion to complete the transaction.


 


“Fixed Charge Coverage Ratio” means with
respect to any specified Person and its Restricted Subsidiaries for any period,
the ratio of the Consolidated Cash Flow of such Person and its Restricted
Subsidiaries for such period to the Fixed Charges of such Person and its
Restricted Subsidiaries for such period. In the event that the specified Person
or any of its Restricted Subsidiaries incurs, assumes, guarantees, repays,
repurchases or redeems any Indebtedness or issues, repurchases or redeems
preferred stock subsequent to the commencement of the period for which the
Fixed Charge Coverage Ratio is being calculated and on or prior to the date on
which the event for which the calculation of the Fixed Charge Coverage Ratio is
made (the “Calculation Date”),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma
effect to such incurrence, assumption, Guarantee, repayment, repurchase or
redemption of Indebtedness, or such issuance, repurchase or redemption of
preferred stock, and the use of the proceeds therefrom as if the same had
occurred at the beginning of the applicable four-quarter reference period.  In addition, for purposes of calculating the
Fixed Charge Coverage Ratio: (1) acquisitions and dispositions that have
been made by the specified Person or any of its Restricted Subsidiaries,
including through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be given pro
forma effect as if they had occurred on the first day of the four-quarter
reference period and Consolidated Cash Flow for such reference period shall be
calculated on a pro forma basis in accordance with Regulation S-X under the
Securities Act; (2) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded; (3) the
Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the
obligations giving rise to such Fixed Charges will not be obligations of the
specified Person or any of its Subsidiaries following the Calculation Date; (4) the
consolidated interest expense attributable to interest on any Indebtedness
computed on a pro forma basis and (a) bearing a floating interest rate
shall be computed as if the rate in effect on the date of computation had been
the applicable rate for the entire period and (b) that was not outstanding
during the period for which the computation is being made but which bears, at
the option of such Person, a fixed or floating rate of interest, shall be
computed by applying at the option of such Person either the fixed or floating rate;
and (5) the consolidated interest expense attributable to interest on any
working capital borrowings under a revolving credit facility computed on a pro
forma basis shall be computed based upon the average daily balance of such
working capital borrowings during the applicable period.


 


“Fixed Charges” means, with respect to any
specified Person and its Restricted Subsidiaries for any period, the sum,
without duplication, of: (1) the consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or
accrued, 


 


8

















 


including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
attributable debt, commissions, discounts and other fees and charges incurred
in respect of letter of credit or bankers’ acceptance financings, and net of
the effect of all payments made or received pursuant to Hedging Obligations; plus (2) the consolidated interest of
such Person and its Restricted Subsidiaries that was capitalized during such
period; plus (3) interest
actually paid by the Company or any such Restricted Subsidiary under any
Guarantee of Indebtedness or other obligation of any other Person; plus (4) the product of (a) all
dividends, whether paid or accrued and whether or not in cash, on any series of
Disqualified Stock or preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividends on Equity Interests payable solely in Equity
Interests of OI Group (other than Disqualified Stock) or to OI Group or a
Restricted Subsidiary of OI Group, times (b) a fraction, the numerator of
which is one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rate of such Person, expressed
as a decimal, in each case, on a consolidated basis and in accordance with
GAAP.


 


 “Foreign Subsidiary” means any Restricted Subsidiary of OI
Group which is organized under the laws of a jurisdiction other than the United
States of America or any State thereof.


 


“GAAP” means
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
have been approved by a significant segment of the accounting profession, which
are in effect as of January 24, 2002.


 


“Global Note” means a Note issued to evidence
all or a part of the Notes that is executed by the Company and authenticated
and delivered by the Trustee to a Depositary or pursuant to such Depositary’s
instructions, all in accordance with this Indenture and pursuant to Sections
2.01, 2.06(b)(iv), 2.06(d)(ii) or 2.06(f), which shall be registered as to
principal and interest in the name of such Depositary or its nominee.


 


“Global Security” means a Note issued to
evidence all or a part of the Notes that is executed by the Company and
authenticated and delivered by the Trustee to a Depositary or pursuant to such
Depositary’s instructions, all in accordance with this Indenture and pursuant
to Section 2.01, which shall be registered as to principal and interest in
the name of such Depositary or its nominee.


 


“Global Security Legend” means the legend set forth in Section 2.06(g)(ii) which
is required to be placed on all Global Securities issued under this Indenture.


 


“Government Securities” means direct
obligations of, or obligations guaranteed by, the United States of America, and
the payment for which the United States pledges its full faith and credit.


 


9

















 


“Guarantee” means
a guarantee other than by endorsement of negotiable instruments for collection
in the ordinary course of business, direct or indirect, in any manner
including, without limitation, through letters of credit or reimbursement
agreements in respect thereof, of all or any part of any Indebtedness.


 


“Guarantors” means: (1) OI
Group; (2) each direct or indirect Domestic Subsidiary of OI Group (other
than the Company) that guarantees the Credit Agreement as of the Issue Date;
and (3) each future direct or indirect Domestic Subsidiary of OI Group
that guarantees the Credit Agreement and executes a Guarantee of the Notes in
accordance with the provisions of this Indenture; and their respective
successors and assigns.


 


“Hedging Obligations”
means, with respect to any specified Person, the obligations of such Person
under: (1) interest rate swap agreements, interest rate cap agreements,
interest rate collar agreements and other agreements or arrangements designed
to protect such Person against fluctuations in interest rates; (2) currency
exchange swap agreements, currency exchange cap agreements, currency exchange
collar agreements and other agreements or arrangements designed to protect such
Person against fluctuations in currency values; and (3) commodity swap
agreements; commodity cap agreements, commodity collar agreements and other
agreements or arrangements designed to protect such Person against fluctuations
in commodity prices.


 


“Holder” means a Person in whose name a Note
is registered on the Registrar’s books.


 


“Indebtedness”
means, with respect to any specified Person, any indebtedness of such Person,
whether or not contingent, in respect of: (1) borrowed money; (2) evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof); (3) banker’s acceptances;
(4)          representing Capital Lease
Obligations; (5) the balance deferred and unpaid of the purchase price of
any property, except any such balance that constitutes an accrued liability or
trade payable; or (6) representing any Hedging Obligations, if and to the
extent any of the preceding items (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of the specified
Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes the lesser of the
Fair Market Value on the date of incurrence of any asset of the specified
Person subject to a Lien securing the Indebtedness of others and the amount of
such Indebtedness secured and, to the extent not otherwise included, the
Guarantee by the specified Person of any indebtedness of any other Person. The
amount of any Indebtedness outstanding as of any date shall be: (1) the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount; and (2) the principal amount thereof, in the case of any
other Indebtedness.


 


“Indenture” means this Indenture, as amended or
supplemented from time to time.


 


“Indirect Participant” means a Person who
holds a beneficial interest in a Global Security through a Participant.


 


10

















 


“Initial Securities” means Notes issued on the
Issue Date pursuant to Section 2.02 hereof.


 


“Intercompany Indebtedness”
means any Indebtedness of OI Group or any Subsidiary of OI Group which, in the
case of OI Group, is owing to OI Inc. or any Subsidiary of OI Group and,
in the case of any Subsidiary of OI Group, is owing to OI Group or any other
Subsidiary of OI Group.


 


“Intercreditor
Agreement” means the Second Amended and Restated
Intercreditor Agreement, dated as of June 14, 2006, by and among Deutsche
Bank AG, New York Branch, as administrative agent for the lenders party to the
Credit Agreement, Deutsche Bank Trust Company Americas, as Collateral Agent and
any other parties thereto, as amended, amended and restated or otherwise
modified from time to time.


 


“Investment Grade Permitted Liens” means: (1) Liens
arising under the Collateral Documents other than Liens securing the OI Inc.
Senior Notes on the Issue Date; (2) Liens incurred after the Issue Date on
the assets (including shares of Capital Stock and Indebtedness) of OI Group or
any Domestic Subsidiary of OI Group; provided,
however, that the aggregate
amount of Indebtedness and other obligations at any time outstanding secured by
such Liens pursuant to clause (1) above and this clause (2) shall not
exceed the sum of $5.5 billion plus 50% of Tangible Assets acquired by OI
Group, the Company or any Domestic Subsidiary after January 24, 2002; (3) Liens
in favor of OI Group or any Domestic Subsidiary of OI Group; (4) Liens on
property or shares of capital stock of a Person existing at the time such
Person is merged with or into or consolidated with OI Group or any Domestic
Subsidiary of OI Group; provided that
such Liens were not incurred in connection with or in contemplation of such
merger or consolidation and do not extend to any assets other than those of the
Person merged into or consolidated with OI Group or the Domestic Subsidiary; (5) Liens
on property or shares of capital stock existing at the time of acquisition
thereof by OI Group or any Domestic Subsidiary of OI Group, provided that such Liens were not incurred
in connection with or in contemplation of such acquisition and do not extend to
any property other than the property so acquired by OI Group or the Domestic
Subsidiary; (6) Liens (including extensions and renewals thereof) upon
real or personal (whether tangible or intangible) property acquired after the
Issue Date, provided that: (a) such
Lien is created solely for the purpose of securing Indebtedness incurred to
finance all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment subject thereto and such Lien is
created prior to, at the time of or within 12 months after the later of the
acquisition, the completion of construction or the commencement of full
operation of such property, plant or equipment or to refinance any such
Indebtedness previously so secured; (b) the principal amount of the
Indebtedness secured by such Lien does not exceed 100% of such cost; and (c) any
such Lien shall not extend to or cover any property or assets other than such
item of property or assets and any improvements on such item; (7) Liens to
secure any Capital Lease Obligation or operating lease;  (8) Liens encumbering customary initial
deposits and margin deposits; (9) Liens securing Indebtedness under
Hedging Obligations; (10) Liens arising out of conditional sale, title
retention, consignment or similar arrangements for the sale of goods entered
into by OI Group or any of its Domestic Subsidiaries in the ordinary course of
business of OI Group and its Domestic Subsidiaries; (11) Liens on or sales of
receivables and customary cash reserves established in connection therewith;
(12) Liens securing OI Group’s or any of its Domestic Subsidiary’s obligations
in respect of bankers’ 


 


11

















 


acceptances issued or created to facilitate the purchase, shipment or
storage of inventory or other goods; and (13) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly instituted and
diligently concluded, provided that
any reserve or other appropriate provision as shall be required in conformity
with GAAP shall have been made therefor.


 


“Investment Grade Ratings” means a debt rating
of the Notes of BBB- or higher by S&P and Baa3 or higher by Moody’s or the
equivalent of such ratings by S&P or Moody’s or in the event S&P or
Moody’s shall cease rating the Notes and the Company shall select any other
Rating Agency, the equivalent of such ratings by such other Rating Agency.


 


“Investments” means, with respect to any
Person, all direct or indirect investments by such Person in other Persons in
the forms of loans (including Guarantees thereof), advances or capital
contributions (excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If OI Group or
any Restricted Subsidiary of OI Group sells or otherwise disposes of any Equity
Interests of any direct or indirect Restricted Subsidiary of OI Group such
that, after giving effect to any such sale or disposition, such Person is no
longer a Restricted Subsidiary of OI Group, OI Group shall be deemed to have
made an Investment on the date of any such sale or disposition equal to the
Fair Market Value of the Equity Interests of such Restricted Subsidiary not
sold or disposed of in an amount determined as provided in the final paragraph
of Section 4.12. The acquisition by OI Group or any Restricted Subsidiary
of OI Group of a Person that holds an Investment in a third Person shall be
deemed to be an Investment by OI Group or such Restricted Subsidiary in such
third Person in an amount equal to the Fair Market Value of the Investment held
by the acquired Person in such third Person in an amount determined as provided
in the final paragraph of Section 4.12.


 


“Issue Date” means May 12, 2009.


 


 “Lien” means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale or other title retention agreement, any
lease in the nature thereof, any agreement to give a security interest in and
any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction.


 


“Maturity” when used with respect to any Note,
means the date on which the principal of such Note or an installment of
principal becomes due and payable as therein or herein provided, whether at
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.


 


“Moody’s” means Moody’s Investors Service, Inc.
or any successor rating agency.


 


12

















 


“Mortgages” means
mortgages as defined under the Credit Agreement securing real property in the
United States of America.


 


“Net Income” means, with respect to any
specified Person, the net income (loss) of such Person, determined in
accordance with GAAP and before any reduction in respect of preferred stock
dividends.


 


“Net Proceeds” means the aggregate cash
proceeds received by OI Group or any of its Restricted Subsidiaries in respect
of any Asset Sale (including, without limitation, any cash received upon the
sale or other disposition of any non-cash consideration received in any Asset
Sale), net of any bona fide direct costs relating to such Asset Sale,
including, without limitation, reasonable legal, accounting and investment
banking fees, reasonable sales commissions, any reasonable relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, in
each case, after taking into account any available tax credits or deductions
and any tax sharing arrangements, and amounts required to be applied to the repayment
of Indebtedness that is paid with the proceeds of such Asset Sale and any
reasonable reserve for adjustment in respect of the sale price of such asset or
assets established in accordance with GAAP and for the after-tax cost of any
indemnification payments (fixed and contingent) attributable to sellers’
indemnities to the purchaser.


 


“Non-Recourse Debt” means Indebtedness: (1) as
to which neither OI Group nor any of its Restricted Subsidiaries (a) provides
credit support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness), (b) is directly or indirectly liable
as a guarantor or otherwise, or (c) constitutes the lender; (2) no
default with respect to which (including any rights that the Holders thereof
may have to take enforcement action against an Unrestricted Subsidiary) would
permit upon notice, lapse of time or both any Holder of any other Indebtedness
of OI Group or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and (3) as to which the lenders have been
notified in writing that they will not have any recourse to the stock or assets
of OI Group or any of its Restricted Subsidiaries.


 


“Non-U.S. Person” means a Person who is not a
U.S. Person.


 


“Notes” has the meaning set forth in the
recitals hereto.


 


“Obligations”
means any principal, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.


 


“Offering Memorandum” means the Offering
Memorandum, dated May 7, 2009 relating to the sale of the Initial
Securities.


 


“Officer” means the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, any Executive or Senior Vice President, any Vice-President,
the Treasurer, the Controller, the Secretary, any Assistant Treasurer or any
Assistant Secretary of OI Group or the Company, as the case may be.


 


13

















 


“Officers’ Certificate” means a certificate
signed by two Officers, one of whom must be the Chief Executive Officer, the
President, the Chief Financial Officer, the Treasurer or the principal accounting
officer of OI Group or the Company, as the case may be.


 


“Offshore Collateral Documents” means the
Offshore Security Agreements and Mortgages (as defined in the Credit Agreement)
securing real property located outside of the United States of America.


 


“Offshore Security Agreements” has the meaning
assigned to such term in the Credit Agreement.


 


“OI Group” means Owens-Illinois Group, Inc., a
Delaware corporation.


 


“OI Inc.” means Owens-Illinois, Inc., a Delaware
corporation.


 


“OI Inc. Ordinary Course Payments” means
dividends or other distributions by, or payments of Intercompany Indebtedness
from, OI Group to OI Inc. necessary to permit OI Inc. to pay any of the
following items which are then due and payable: (i) Permitted OI Inc. Debt
Obligations; (ii) claims of persons for exposure to asbestos-containing
products and expenses related thereto; (iii) consolidated tax liabilities
of OI Inc. and its Subsidiaries; and (iv) general administrative costs and
other on-going expenses of OI Inc. in the ordinary course of business
consistent with past practices.


 


“OI Inc. Senior Notes” means the Indebtedness
of OI Inc. outstanding as of any date pursuant to its $250.0 million aggregate
principal amount of 7.50% Senior Debentures due 2010 and $250.0 million aggregate
principal amount of 7.80% Senior Debentures due 2018.


 


“OID Legend” means the legend set forth in Section 2.06(g)(iv) to
be placed on all Notes issued or exchanged under this Indenture.


 


 “Opinion of Counsel” means a written opinion from legal counsel
who is reasonably acceptable to the Trustee.  
The counsel may be an employee of or counsel to the Company.


 


“Participant” means, with respect to the
Depositary, Euroclear or Clearstream, a Person who has an account with the
Depositary, Euroclear or Clearstream, respectively.


 


“Permitted Business” means any business
conducted or proposed to be conducted (as described in the offering memorandum)
by OI Group and its Restricted Subsidiaries on the Issue Date and other
businesses reasonably related or ancillary thereto.


 


“Permitted Investments” means: (1) any
Investment in the Company, OI Group or in a Restricted Subsidiary of OI Group; (2) any
Investment in cash or Cash Equivalents and, with respect to Foreign
Subsidiaries, short term Investments similar to Cash Equivalents customarily
used in the countries in which such Foreign Subsidiaries are located; (3) any
Investment by OI Group or any Restricted Subsidiary of OI Group in a Person, if
as a result of such Investment: (a) such Person becomes a Restricted Subsidiary
of OI Group; or (b) such Person is merged, consolidated or amalgamated
with or into, or transfers or conveys substantially all of its assets to, 


 


14

















 


or is liquidated into, OI Group or a Restricted Subsidiary of OI Group;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in compliance
with Section 4.11; (5) any acquisition of assets solely in exchange
for the issuance of Equity Interests (other than Disqualified Stock) of OI
Inc., the Company or OI Group; (6) Hedging Obligations; (7) advances
to employees, officers and directors not in excess of $2.0 million outstanding
at any one time, in the aggregate; (8) obligations of employees, officers
and directors, not in excess of $2.0 million outstanding at any one time, in
the aggregate, in connection with such employees’, officers’ or directors’
acquisition of shares of OI Inc. common stock, so long as no cash is actually
advanced to such employees, officers or directors in connection with the
acquisition of any such shares; (9) any Investment existing on the Issue
Date; and (10) other Investments in any Person having an aggregate Fair
Market Value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other such Investments outstanding at any such time, not to exceed $150.0
million.


 


“Permitted Liens”  means: (1) Liens arising under the
Collateral Documents other than Liens securing the OI Inc. Senior Notes on the
Issue Date; (2) Liens incurred after the Issue Date on the assets
(including shares of Capital Stock and Indebtedness) of OI Group or any
Restricted Subsidiary of OI Group; provided,
however, that the aggregate amount of Indebtedness and other
obligations at any time outstanding secured by such Liens pursuant to clause (1) above
and this clause (2) shall not exceed the sum of $5.5 billion plus 50% of
Tangible Assets acquired by OI Group, the Company or any Guarantor or that are
owned by any Restricted Subsidiary that becomes a Guarantor after January 24,
2002; (3) Liens in favor of OI Group or any Restricted Subsidiary of OI
Group; (4) Liens on property or shares of capital stock of a Person existing
at the time such Person is merged with or into or consolidated with OI Group or
any Restricted Subsidiary of OI Group; provided
that such Liens were not incurred in connection with or in contemplation of
such merger or consolidation and do not extend to any assets other than those
of the Person merged into or consolidated with OI Group or the Restricted
Subsidiary; (5) Liens on property or shares of capital stock existing at
the time of acquisition thereof by OI Group or any Restricted Subsidiary of OI
Group, provided that such Liens
were not incurred in connection with or in contemplation of such acquisition
and do not extend to any property other than the property so acquired by OI
Group or the Restricted Subsidiary; (6) Liens on property or shares of
capital stock of any Foreign Subsidiary, including shares of capital stock of
any Foreign Subsidiary owned by a Domestic Subsidiary, to secure Indebtedness
of a Foreign Subsidiary permitted to be incurred under this Indenture; (7) Liens
(including extensions and renewals thereof) upon real or personal (whether
tangible or intangible) property acquired after the Issue Date, provided that: (a) such Lien is
created solely for the purpose of securing Indebtedness incurred to finance all
or any part of the purchase price or cost of construction or improvement of
property, plant or equipment subject thereto and such Lien is created prior to,
at the time of or within 12 months after the later of the acquisition, the
completion of construction or the commencement of full operation of such
property, plant or equipment or to refinance any such Indebtedness previously
so secured; (b) the principal amount of the Indebtedness secured by such
Lien does not exceed 100% of such cost; and (c) any such Lien shall not
extend to or cover any property or assets other than such item of property or
assets and any improvements on such item; (8) Liens to secure any Capital
Lease Obligation or operating lease; (9) Liens encumbering customary
initial deposits and margin deposits; (10) Liens securing Indebtedness
under Hedging Obligations; (11) Liens arising out of conditional sale, title
retention,


 


15
















 


consignment or similar arrangements for the sale of goods entered into
by OI Group or any of its Restricted Subsidiaries in the ordinary course of
business of OI Group and its Restricted Subsidiaries; (12) Liens on or sales of
receivables and customary cash reserves established in connection therewith;
(13) Liens securing OI Group’s or any of its Restricted Subsidiaries’
obligations in respect of bankers’ acceptances issued or created to facilitate
the purchase, shipment or storage of inventory or other goods; and (14) Liens
for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded, provided
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor.


 


“Permitted OI Inc. Debt Obligations” means
Obligations with respect to the OI Inc. Senior Notes and any refinancings
thereof and up to $50.0 million of Industrial Revenue Bond financing.


 


“Permitted Refinancing Indebtedness” means any
Indebtedness of OI Group or any of its Restricted Subsidiaries issued in
exchange for, or the net proceeds of which are used to extend, refinance,
renew, replace, defease or refund such other Indebtedness of OI Group or any of
its Restricted Subsidiaries (other than Intercompany Indebtedness); provided that: (1) the principal
amount (or accreted value, if applicable) of such Permitted Refinancing
Indebtedness does not exceed for more than 60 days the principal or commitment
amount (or accreted value, if applicable) of the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus all accrued interest
thereon and the amount of any premiums necessary to accomplish such refinancing
and such expenses incurred in connection therewith); (2) such Permitted
Refinancing Indebtedness has a final maturity date later than the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (3) if
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Notes, such Permitted
Refinancing Indebtedness has a final maturity date later than the final
maturity date of, and is subordinated in right of payment to, the Notes on
terms at least as favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.


 


“Person” means
any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, limited liability
company or government or other entity.


 


“Pledge Agreement”
means the Second Amended and Restated Pledge Agreement, dated as of June 14,
2006, by and among OI Group, OI Packaging, and Deutsche Bank Trust Company
Americas, as Collateral Agent, as amended, amended and restated or otherwise
modified from time to time.


 


“Principal” of a Note means the principal
amount due on the Maturity of the Note plus the premium, if any, on the Note.


 


16

















 


“Private Placement Legend” means the legend
set forth in Section 2.06(g)(i) to be placed on all Notes issued
under this Indenture except where otherwise permitted by the provisions of this
Indenture.


 


“QIB” means a “qualified institutional buyer”
as defined in Rule 144A.


 


“Rating Agency” means any of: (1) S&P;
(2) Moody’s; or (3) if S&P or Moody’s or both shall not make a
rating of the Notes publicly available, a security rating agency or agencies,
as the case may be, nationally recognized in the United States, selected by the
Company, which shall be substituted for S&P or Moody’s or both, as the case
may be, and, in each case, any successors thereto.


 


“Registration
Rights Agreement” means the Registration Rights
Agreement, dated as of May 12, 2009, among the Company, the Guarantors
named therein and the Initial Purchasers (as defined therein) with respect to
the Notes and the Guarantees thereof, as amended or supplemented from time to
time.


 


“Regulation
S” means Regulation S promulgated under the Securities
Act.


 


“Regulation S Global Security” means a Regulation S Temporary
Global Security or Regulation S Permanent Global Security, as appropriate.


 


“Regulation
S Legend” means the legend set forth in Section 2.06(g)(iii) to
be placed on all Notes issued or exchanged under this Indenture pursuant to
Regulation S.


 


“Regulation S Permanent Global Security” means a permanent
Global Security bearing the Global Security Legend, the Private Placement
Legend, the Regulation S Legend and the OID Legend and deposited with or on
behalf of and registered in the name of the Depositary or its nominee, issued
in a denomination equal to the outstanding principal amount of the applicable
Regulation S Temporary Global Security upon expiration of the Restricted
Period.


 


“Regulation S Temporary Global Security” means
a temporary Global Security substantially in the form of Exhibit D-2
bearing the Global Security Legend, the Private Placement Legend, the
Regulation S Temporary Global Security Legend, the Regulation S Legend and the
OID Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee, issued in a denomination equal to the outstanding
principal amount of the Notes initially sold in reliance on Rule 903 of
Regulation S.


 


“Regulation S Temporary Global Security Legend”
means the legend set forth in Section 2.06(g)(iii) to be placed on
all Regulation S Temporary Global Securities issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.


 


“Restricted Definitive Security” means a
Definitive Security bearing the Private Placement Legend, the OID Legend and,
if applicable, the Regulation S Legend.


 


“Responsible
Officer” means, when used with respect to the Trustee, any officer
within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee 


 


17

















 


who
customarily performs functions similar to those performed by the persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person’s knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Indenture.


 


“Restricted Global Security” means a Global
Security bearing the Private Placement Legend, the OID Legend and, if
applicable, the Regulation S Legend.


 


“Restricted Investment” means an Investment
other than a Permitted Investment.


 


“Restricted Period” means, with respect to the
Notes, the 40-day restricted period as defined in Regulation S.


 


“Restricted Subsidiary”
of a Person means any Subsidiary of the referent Person that is not an
Unrestricted Subsidiary.


 


“Rule 144” means Rule 144
promulgated under the Securities Act.


 


“Rule 144A” means Rule 144A
promulgated under the Securities Act.


 


“Rule 903” means Rule 903
promulgated under the Securities Act.


 


“Rule 904” means Rule 904
promulgated under the Securities Act.


 


“S&P” means Standard & Poor’s Ratings
Services, a division of McGraw Hill Inc., a New York corporation, or any
successor rating agency.


 


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


 


“Security Agreement” means the Second Amended and Restated
Security Agreement, dated as of June 14, 2006, entered into by and among
OI Group, each of the direct and indirect subsidiaries of OI Group signatory
thereto, each additional grantor that may become a party thereof, and Deutsche
Bank Trust Company Americas, as Collateral Agent as amended, amended and
restated, or otherwise modified from time to time.


 


“Shelf Registration Statement” means the shelf
registration statement as defined in the Registration Rights Agreement.


 


“Significant Subsidiary”
means any Restricted Subsidiary of OI Group that would be a “significant
subsidiary” as defined in Article I, Rule 1-02 of Regulation S-X
promulgated pursuant to the Securities Act, as such Regulation is in effect as
of the Issue Date.


 


“Specified New Senior Debt” means Specified
New Senior Debt as defined in the Intercreditor Agreement.


 


“Stated Maturity”
means, with respect to any installment of interest or Principal on any series
of Indebtedness, the date on which such payment of interest or Principal was
scheduled to be paid in the original documentation governing such Indebtedness,
and shall not 


 


18

















 


include any contingent obligations to repay, redeem or repurchase any
such interest or Principal prior to the date originally scheduled for the
payment thereof.


 


“Subsidiary”
means, with respect to any specified Person: (1) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and (2) any partnership (a) the sole general
partner or the managing general partner of which is such Person or a Subsidiary
of such Person or (b) the only general partners of which are such Person
or one or more Subsidiaries of such Person (or any combination thereof).


 


“Tangible Assets” means the total consolidated
assets, less goodwill and
intangibles, of OI Group and its Restricted Subsidiaries, as shown on the most
recent balance sheet of OI Group.


 


“TIA” means the Trust Indenture Act of 1939, as
amended from time to time, and as in effect on the date of execution of this
Indenture; provided, however, that in the event the TIA is
amended after such date, “TIA”
means, to the extent required by such amendment, the Trust Indenture Act, as so
amended.


 


“Trustee” means the party named as such above until a
successor becomes such pursuant to this Indenture and thereafter means or
includes each party who is then a trustee hereunder.


 


“Trust Officer” means the Chairman of the
Board, the President or any other officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.


 


“Unrestricted
Definitive Securities” means one or more Definitive Securities that do not bear and are not
required to bear the Private Placement Legend.


 


“Unrestricted
Global Security” means a permanent Global Security that bears the Global Security Legend
and that has the “Schedule of Exchanges of Interests in the Global Note”
attached hereto, and that is deposited with or on behalf of and registered in
the name of the Depositary, representing Notes that do not and are not required
to bear the Private Placement Legend.


 


“Unrestricted
Securities” means
one or more Unrestricted Global Securities and/or Unrestricted Definitive
Securities, including, without limitation, the Exchange Securities.


 


“Unrestricted
Subsidiary”
means any Subsidiary of OI Group (other than the Company) that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary: (1) has no
Indebtedness other than Non-Recourse Debt; (2) is not party to any
agreement, contract, arrangement or understanding with OI Group or any
Restricted Subsidiary of OI Group unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to OI Group or
such Restricted Subsidiary than those that might be obtained at the time from
Persons who are 


 


19

















 


not Affiliates of OI Group; (3) is a
Person with respect to which neither OI Group nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for
additional Equity Interests or (b) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of
operating results; (4) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of OI Group or any of
its Restricted Subsidiaries; and (5) has at least one director on its
Board of Directors that is not a director or executive officer of OI Group or
any of its Restricted Subsidiaries and has at least one executive officer that
is not a director or executive officer of OI Group or any of its Restricted
Subsidiaries.  Any designation of a
Restricted Subsidiary of OI Group as an Unrestricted Subsidiary shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
Board Resolution giving effect to such designation and an Officers’ Certificate
certifying that such designation complied with the preceding conditions and was
permitted by Section 4.12. If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements as an Unrestricted Subsidiary, it
shall thereafter cease to be an Unrestricted Subsidiary for purposes of this
Indenture and any Indebtedness of such Subsidiary shall be deemed to be
incurred by a Restricted Subsidiary of OI Group as of such date and, if such
Indebtedness is not permitted to be incurred as of such date under Section 4.13,
OI Group shall be in default of such covenant.


 


“Voting
Stock” of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such
Person.


 


“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the
number of years obtained by dividing: (1) the sum of the products obtained
by multiplying (a) the amount of each then remaining installment, sinking
fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment; by (2) the then outstanding principal amount
of such Indebtedness.


 


“Wholly Owned Restricted Subsidiary” of any specified Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors’ qualifying shares) shall at
the time be owned by such Person and/or by one or more Wholly Owned Restricted
Subsidiaries of such Person.


 


Section 1.02.                         Other Definitions.


 


	
  Term

  	
   

  	
  Defined in Section

  
	
   

  	
   

  	
   

  
	
  “Additional Securities”

  	
   

  	
  2.01

  
	
  “Bankruptcy Law”

  	
   

  	
  6.01

  
	
  “Custodian”

  	
   

  	
  6.01

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Legal Holiday”

  	
   

  	
  11.07

  
	
  “Obligations”

  	
   

  	
  10.01

  
	
  “Paying Agent”

  	
   

  	
  2.03

  
	
  “Payment Default”

  	
   

  	
  6.01

  
	
  “Place of Payment”

  	
   

  	
  2.01

  
	
  “redemption price”

  	
   

  	
  3.03

  
	
  “Registrar”

  	
   

  	
  2.03

  



 


20

















 


Section 1.03.                         Incorporation by Reference of
Trust Indenture Act.


 


Whenever this
Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture. The following TIA terms used in
this Indenture have the following meanings:


 


“indenture
securities” means the Notes.


 


“indenture Holder”
means a Holder.


 


“indenture to be
qualified” means this Indenture.


 


“indenture trustee”
or “institutional trustee” means
the Trustee.


 


“obligor”
on the Notes means the Company and any successor obligor on the Notes.


 


All other
terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by Commission rule under the TIA
have the meanings so assigned to them.


 


Section 1.04.                         Rules of Construction.


 


Unless the
context otherwise requires:


 


(i)                                     a
term has the meaning assigned to it;


 


(ii)                                  an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;


 


(iii)                               “or”
is not exclusive;


 


(iv)                              words
in the singular include the plural, and in the plural include the singular; and


 


(v)                                 provisions
apply to successive events and transactions.


 


ARTICLE 2.


 


THE SECURITIES


 


Section 2.01.                         Unlimited in Amount, Form and
Dating.


 


The aggregate
principal amount of Notes that may be authenticated and delivered under this
Indenture is unlimited.


 


21

















 


The Company
may issue additional Notes after Notes have been issued (“Additional Securities”).  The Notes together with any Additional
Securities would be treated as a single series for all purposes under the
Indenture, including without limitation, waivers, amendments, redemptions and
offers to the purchase.


 


The Principal of and any interest
on the Notes shall be payable at the office or agency of the Company designated
in the form of Note (each such place herein called the “Place of Payment”); provided,
however, that payment of interest may be made at the option of the
Company by check mailed to the address of the Person entitled thereto as such
address shall appear in the register of Notes referred to in Section 2.03.


 


Global and Definitive Securities.  Notes may be issued as Global Securities or
as Definitive Securities and shall be in substantially the form of Exhibit D-1
or D-2 attached hereto.  Each
Global Security shall represent such of the outstanding Notes as shall be
specified therein and each shall provide that it shall represent the aggregate
principal amount of such outstanding Notes from time to time endorsed thereon
and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Security to
reflect the amount of any increase or decrease in the aggregate principal
amount of outstanding Notes represented thereby shall be made by the Trustee or
the Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06.


 


Temporary Global Securities.  Notes offered and sold in reliance on
Regulation S shall be issued initially in the form of the Regulation S
Temporary Global Security, which shall be deposited on behalf of the purchasers
of the Notes represented thereby with the Trustee, at its Corporate Trust
Office, as custodian for the Depositary, and registered in the name of the
Depositary or the nominee of the Depositary for the accounts of designated
agents holding on behalf of Euroclear or Clearstream, duly executed by the
Company and authenticated by the Trustee as hereinafter provided.  The Restricted
Period shall terminate upon the receipt by the Trustee of (i) a written
certificate from the Depositary, together with copies of certificates from
Euroclear and Clearstream certifying that they have received certification of
non-United States beneficial ownership of 100% of the aggregate principal
amount of the Regulation S Temporary Global Security (except to the extent of any
beneficial owners thereof who acquired an interest therein during the
Restricted Period pursuant to another exemption from registration under the
Securities Act and who will take delivery of a beneficial ownership interest in
a 144A Global Security bearing a Private Placement Legend and an OID Legend,
all as contemplated by Section 2.06(a)(ii)), and (ii) an Officers’
Certificate from the Company. Following the termination of the Restricted
Period, beneficial interests in the Regulation S Temporary Global Security
shall be exchanged for beneficial interests in Regulation S Permanent Global
Securities pursuant to the Applicable Procedures. Simultaneously with the
authentication of Regulation S Permanent Global Securities, the Trustee shall
cancel the Regulation S Temporary Global Security. The aggregate principal
amount of the Regulation S Temporary Global Security and the Regulation S
Permanent Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary or its
nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.


 


22

















 


Euroclear and Clearstream Procedures Applicable.  The provisions of the “Operating Procedures
of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear”
and the “General Terms and Conditions of Clearstream” and “Customer Handbook”
of Clearstream shall be applicable to transfers of beneficial interests in the
Regulation S Temporary Global Security and the Regulation S Permanent Global
Securities that are held by Participants through Euroclear or Clearstream.


 


The Notes may have notations,
legends or endorsements required by law, stock exchange rule or
usage.  Each Note shall be dated the date
of its authentication.


 


Section 2.02.                        Execution and Authentication.


 


Two Officers shall sign the
Notes for the Company by manual or facsimile signature.


 


If an Officer whose signature
is on a Note no longer holds that office at the time the Note is authenticated,
the Note shall nevertheless be valid.


 


A Note shall not be valid
until authenticated by the manual signature of the Trustee.  The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.


 


The Trustee shall
authenticate Notes for original issue upon a Company Order.


 


The Trustee may appoint an
authenticating agent acceptable to the Company to authenticate Notes.  An authenticating agent may authenticate
Notes whenever the Trustee may do so. 
Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. 
An authenticating agent has the same rights as an Agent to deal with the
Company or an Affiliate of the Company.


 


Section 2.03.                        Registrar and Paying Agent.


 


The Company shall maintain an
office or agency where the Notes may be presented for registration of transfer
or for exchange (the “Registrar”)
and an office or agency where Notes may be presented for payment (a “Paying Agent”).  The Registrar shall keep a register of the
Notes and of their transfer and exchange. 
The Company may appoint one or more co-Registrars and one or more
additional paying agents for the Notes. 
The term “Paying Agent”
includes any additional paying agent. 
The Company may change any Paying Agent, Registrar or co-Registrar
without prior notice to any Holder.  The
Company shall notify the Trustee in writing of the name and address of any
Agent not a party to this Indenture.


 


If the Company fails to
maintain a Registrar or Paying Agent the Notes, the Trustee shall act as
such.  The Company or any of its
Affiliates may act as Paying Agent, Registrar or co-Registrar.


 


The Company hereby appoints
the Trustee as the initial Registrar and Paying Agent for the Notes unless
another Registrar or Paying Agent, as the case may be, is appointed prior to
the time the Notes are first issued.


 


23

















 


Section 2.04.                        Paying Agent to Hold Money in
Trust.


 


Whenever the Company has one
or more Paying Agents it shall, prior to each due date of the Principal of or
interest on, any Notes, deposit with a Paying Agent a sum sufficient to pay the
Principal or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such Principal or interest, and (unless such
Paying Agent is the Trustee) the Company shall promptly notify the Trustee of
its action or failure so to act.


 


The Company shall require
each Paying Agent other than the Trustee to agree in writing that such Paying
Agent shall hold in trust for the benefit of the Holders of the Notes, or the
Trustee, all money held by the Paying Agent for the payment of Principal or
interest on the Notes, and that such Paying Agent shall notify the Trustee of
any Default by the Company or any other obligor of the Notes in making any such
payment and at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held
in trust by such Paying Agent.  If the Company
or an Affiliate acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders of the Notes all money held by it as
Paying Agent.  The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee.  Upon so doing, the Paying Agent (if other
than the Company or an Affiliate of the Company) shall have no further
liability for such money.  Upon any
bankruptcy or reorganization proceedings relating to the Company, the Trustee
shall serve as Paying Agent for the Notes.


 


Section 2.05.                        Holder Lists.


 


The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Holders and shall otherwise comply with TIA
Section 312(a).  If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders relating
to such interest payment date or request, as the case may be.


 


Section 2.06.                        Transfer and Exchange.


 


(a)           Transfer and Exchange of Global Securities.
A Global Security may not be transferred as a whole except by the Depositary to
a nominee of the Depositary, by a nominee of the Depositary to the Depositary
or to another nominee of the Depositary, or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary.
Global Securities will not be exchanged by the Company for Definitive
Securities unless (i) the Company delivers to the Trustee notice from the
Depositary that it is unwilling or unable to continue to act as Depositary or
that it is no longer a clearing agency registered under the Exchange Act and,
in either case, a successor Depositary is not appointed by the Company within
120 days after the date of such notice from the Depositary; (ii) the
Company in its sole discretion determines that the Global Securities (in whole
but not in part) should be exchanged for Definitive Securities and delivers a
written notice to such effect to the Trustee (provided
that in no event shall the Regulation S Temporary Global Security be exchanged
by the Company for Definitive Securities prior to (x) the expiration of
the Restricted Period and (y) the receipt by the 


 


24

















 


Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under
the Securities Act; or (iii) an Event of Default shall have occurred and
be continuing with respect to the Notes and the Trustee has received a request
from DTC or any Holder to issue Definitive Securities. Upon the occurrence of
any of the preceding events in (i), (ii) or (iii) above, Definitive
Securities shall be issued in such names as the Depositary shall instruct the
Trustee. Global Securities also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.09.
Every Note authenticated and delivered in exchange for, or in lieu of, a Global
Security or any portion thereof, pursuant to this Section 2.06 or Section 2.07
or 2.09, shall be authenticated and delivered in the form of, and shall be, a
Global Security. A Global Security may not be exchanged for another Note other
than as provided in this Section 2.06(a),
however, beneficial interests in a Global Security may be transferred and
exchanged as provided in Section 2.06(b),
(c) or (f).


 


(b)           Transfer and Exchange of Beneficial Interests in Global Securities.
The transfer and exchange of beneficial interests in the Global Securities
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Securities shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Securities also shall
require compliance with either subparagraph (i) or (ii) below, as
applicable, as well as one or more of the other following subparagraphs, as
applicable:


 


(i)            Transfer of Beneficial
Interests in the Same Global Security. Beneficial interests in any Restricted Global
Security may be transferred to Persons who take delivery thereof in the form of
a beneficial interest in the same Restricted Global Security in accordance with
the transfer restrictions set forth in the Private Placement Legend; provided, however, that
prior to the expiration of the Restricted Period, transfers of beneficial
interests in the Temporary Regulation S Global Security may not be made to a
U.S. Person or for the account or benefit of a U.S. Person (other than an
initial purchaser). Beneficial interests in any Unrestricted Global Security
may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Security. No written orders or
instructions shall be required to be delivered to the Registrar to effect the
transfers described in this Section 2.06(b)(i).


 


(ii)           All Other Transfers and
Exchanges of Beneficial Interests in Global Securities. In
connection with all transfers and exchanges of beneficial interests in any
Global Security that is not subject to Section 2.06(b)(i) above, the
transferor of such beneficial interest must deliver to the Registrar (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in another
Global Security in an amount equal to the beneficial interest to be transferred
or exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to be
credited with such increase.  Upon
consummation of an Exchange Offer for a series of Global Securities in
accordance with Section 2.06(f), the requirements of this Section 2.06(b)(ii) shall
be deemed to have been satisfied upon receipt by the Registrar of the necessary
instructions provided for in the Exchange Offer Prospectus.  Upon satisfaction of all of the requirements
for transfer or exchange of beneficial interests in Global Securities


 


25
















 


contained in this Indenture and
the Notes or otherwise applicable under the Securities Act, the Trustee shall
adjust the Principal amount of the relevant Global Security(s) pursuant to
Section 2.06(h).


 


(iii)                             Transfer of Beneficial Interests to Another Restricted Global Security.
A beneficial interest in any Restricted Global Security may be transferred to a
Person who takes delivery thereof in the form of a beneficial interest in
another Restricted Global Security if the transfer complies with the requirements
of Section 2.06(b)(ii) above and the Registrar receives the
following:


 


(A)      if
the transferee will take delivery in the form of a beneficial interest in a
144A Global Security, then the transferor must deliver a certificate in the
form of Exhibit A hereto, including the certifications in item (1) thereof;
and


 


(B)        if
the transferee will take delivery in the form of a beneficial interest in a
Regulation S Temporary Global Security or a Regulation S Global Security,
then the transferor must deliver a certificate in the form of Exhibit A
hereto, including the certifications in item (2) thereof.


 


(iv)                            Transfer and Exchange of Beneficial Interests in a
Restricted Global Security for Beneficial Interests in an Unrestricted Global
Security. A beneficial interest in any Restricted Global Security
may be exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Security or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Security
if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) above
and:


 


(A)      such
exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the holder of the beneficial
interest to be transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies that it is not (1) a broker-dealer, (2) a
Person participating in the distribution of the Exchange Securities or (3) a
Person who is an affiliate (as defined in Rule 144) of the Company;


 


(B)        such
transfer is effected pursuant to the Shelf Registration Statement in accordance
with the Registration Rights Agreement;


 


(C)        such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or


 


(D)       the
Registrar receives the following:


 


(1)          if the holder of such beneficial interest in a Restricted
Global Security proposes to exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Security, a certificate from such holder in
the form of Exhibit B hereto, including the certifications in item (1)(a) thereof;
or


 


26

















 


(2)          if the holder of such beneficial interest in a Restricted
Global Security proposes to transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Security, a certificate from such holder in the form of Exhibit A
hereto, including the certifications in item (4) thereof;


 


and, in each
such case set forth in this subparagraph (D), if the Registrar so requests or
if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.


 


If any such
transfer is effected pursuant to subparagraph (B) or (D) above at a
time when an Unrestricted Global Security has not yet been issued, the Company
shall issue and, upon receipt of a Company Order in accordance with Section 2.02,
the Trustee shall authenticate one or more Unrestricted Global Securities in an
aggregate principal amount equal to the aggregate principal amount of
beneficial interests transferred pursuant to subparagraph (B) or (D) above.


 


Beneficial
interests in an Unrestricted Global Security cannot be exchanged for, or
transferred to Persons who take delivery thereof in the form of, a beneficial
interest in a Restricted Global Security.


 


(c)                                  Transfer and Exchange of
Beneficial Interests in Global Securities for Definitive Securities. A beneficial interest in a
Global Security may not be exchanged for a Definitive Security except under the
circumstances described in Section 2.06(a). A beneficial interest in a
Global Security may not be transferred to a Person who takes delivery thereof
in the form of a Definitive Security except under the circumstances described
in Section 2.06(a).


 


(d)                                 Transfer and Exchange of
Definitive Securities for Beneficial Interests in Global Securities.


 


(i)                                     Restricted Definitive Securities to Beneficial Interests in Restricted
Global Securities.  If any
Holder of a Restricted Definitive Security proposes to exchange such Restricted
Definitive Security for a beneficial interest in a Restricted Global Security
or to transfer such Restricted Definitive Securities to a Person who takes
delivery thereof in the form of a beneficial interest in a Restricted Global
Security, then, upon receipt by the Registrar of the following documentation:


 


(A)      if
the Holder of such Restricted Definitive Security proposes to exchange such
Restricted Definitive Security for a beneficial interest in a Restricted Global
Security, a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (2)(a) thereof;


 


(B)        if
such Restricted Definitive Security is being transferred to a QIB in accordance
with Rule 144A, a certificate to the effect set forth in Exhibit A
hereto, including the certifications in item (1) thereof;


 


27

















 


(C)        if
such Restricted Definitive Security is being transferred to a Non-U.S. Person
in an offshore transaction in accordance with Rule 903 or Rule 904, a
certificate to the effect set forth in Exhibit A hereto, including the
certifications in item (2) thereof;


 


(D)       if
such Restricted Definitive Security is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in
accordance with Rule 144, a certificate to the effect set forth in Exhibit A
hereto, including the certifications in item (3)(a) thereof;


 


(E)         if
such Restricted Definitive Security is being transferred to the Company or any
of its Subsidiaries, a certificate to the effect set forth in Exhibit A
hereto, including the certifications in item (3)(b) thereof, or


 


(F)         if
such Restricted Definitive Security is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate to the
effect set forth in Exhibit A hereto, including the certifications in item
(3)(c) thereof,


 


the Trustee
shall cancel the Restricted Definitive Security, and increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Security, in the case of clause (B) above,
the 144A Global Security, and in the case of clause (C) above, the
Regulation S Global Security.


 


(ii)                                Restricted Definitive Securities to Beneficial Interests in
Unrestricted Global Securities. A Holder of a Restricted Definitive
Security may exchange such Restricted Definitive Security for a beneficial
interest in an Unrestricted Global Security or transfer such Restricted
Definitive Security to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Security only if:


 


(A)      such
exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer, certifies that it is
not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Securities or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;


 


(B)        such
transfer is effected pursuant to the Shelf Registration Statement in accordance
with the Registration Rights Agreement;


 


(C)        such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or


 


(D)       the
Registrar receives the
following:


 


28

















 


(1)          if the Holder of such Definitive Securities proposes to
exchange such Definitive Securities for a beneficial interest in the
Unrestricted Global Security, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (1)(b) thereof; or


 


(2)          if the Holder of such Definitive Securities proposes to
transfer such Definitive Securities to a Person who shall take delivery thereof
in the form of a beneficial interest in the Unrestricted Global Security, a
certificate from such Holder in the form of Exhibit A hereto, including
the certifications in item (4) thereof;


 


and, in each
such case set forth in this subparagraph (D), if the Registrar so requests or
if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer required
in order to maintain compliance with the Securities Act.


 


Upon
satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii),
the Trustee shall cancel the Definitive Securities and increase or cause to be
increased the aggregate Principal amount of the Unrestricted Global Security.


 


(iii)                             Unrestricted Definitive Securities to Beneficial Interests in
Unrestricted Global Securities. A Holder of an Unrestricted
Definitive Security may exchange such Unrestricted Definitive Security for a
beneficial interest in an Unrestricted Global Security or transfer such
Unrestricted Definitive Securities to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Security at any
time. Upon receipt of a request for such an exchange or transfer, the Trustee
shall cancel the applicable Unrestricted Definitive Security and increase or
cause to be increased the aggregate Principal amount of one of the Unrestricted
Global Securities.


 


If any such
exchange or transfer from a Definitive Security to a beneficial interest is
effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at
a time when an Unrestricted Global Security has not yet been issued, the
Company shall issue and, upon receipt of a Company Order in accordance with Section 2.02,
the Trustee shall authenticate one or more Unrestricted Global Securities in an
aggregate Principal amount equal to the Principal amount of Definitive
Securities so transferred.


 


(e)                                Transfer and Exchange of Definitive
Securities for Definitive Securities. Upon request by a Holder of Definitive Securities and such
Holder’s compliance with the provisions of this Section 2.06(e), the
Registrar shall register the transfer or exchange of Definitive
Securities.  Prior to such registration
of transfer or exchange, the requesting Holder shall present or surrender to
the Registrar the Definitive Securities duly endorsed or accompanied by a
written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by its attorney, duly authorized in writing. In
addition, the requesting 


 


29

















 


Holder shall provide any additional certifications, documents and
information, as applicable, required pursuant to the following provisions of
this Section 2.06(e).


 


(i)                                     Restricted Definitive Securities to Restricted Definitive Securities.  Any Restricted Definitive Security may be
transferred to and registered in the name of Persons who take delivery thereof
in the form of a Restricted Definitive Security if the Registrar receives the
following:


 


(A)      if
the transfer will be made pursuant to Rule 144A, then the transferor must
deliver a certificate in the form of Exhibit A hereto, including the
certifications in item (1) thereof,


 


(B)        if
the transfer will be made pursuant to Rule 903 or Rule 904, then the
transferor must deliver a certificate in the form of Exhibit A hereto,
including the certifications in item (2) thereof, and


 


(C)        if
the transfer will be made pursuant to any other exemption from the registration
requirements of the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit A hereto, including the certifications
required by item (3) thereof.


 


(ii)                                  Restricted Definitive Securities to Unrestricted Definitive Securities.
Any Restricted Definitive Security may be exchanged by the Holder thereof for
an Unrestricted Definitive Security or transferred to a Person or Persons who
take delivery thereof in the form of an Unrestricted Definitive Security if:


 


(A)      such
exchange or transfer is effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer, certifies that it is
not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Securities or (3) a Person who is an
affiliate (as defined in Rule 144) of the Company;


 


(B)        any
such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;


 


(C)        any
such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or


 


(D)       the
Registrar receives the following:


 


(1)          if the Holder of such Restricted Definitive Securities
proposes to exchange such Restricted Definitive Securities for an Unrestricted
Definitive Security, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (1)(c) thereof; or


 


30

















 


(2)          if the Holder of such Restricted Definitive Securities
proposes to transfer such Restricted Definitive Securities to a Person who
shall take delivery thereof in the form of an Unrestricted Definitive Security,
a certificate from such Holder in the form of Exhibit A hereto, including
the certifications in item (4) thereof;


 


and, in each
such case set forth in this subparagraph (D), if the Registrar so requests, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such exchange or transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.


 


(iii)                             Unrestricted Definitive Securities to Unrestricted Definitive
Securities.  A Holder of
Unrestricted Definitive Securities may transfer such Unrestricted Definitive
Securities to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Security. Upon receipt of a request to register such a
transfer, the Registrar shall register the Unrestricted Definitive Securities
pursuant to the instructions from the Holder thereof.


 


(f)                                    Exchange Offer. Upon the occurrence of the
Exchange Offer with respect to Initial Securities in accordance with the
Registration Rights Agreement, the Company shall issue and, upon receipt of a
Company Order in accordance with Section 2.02, the Trustee shall,
authenticate (i) one or more Unrestricted Global Securities in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Securities tendered for acceptance by
Persons that certify in the applicable Letters of Transmittal that (x) they
are not broker-dealers, (y) they are not participating in a distribution
of the Exchange Securities and (z) they are not affiliates (as defined in Rule 144)
of the Company, and accepted for exchange in the Exchange Offer and (ii) Definitive
Securities in an aggregate principal amount equal to the principal amount of
the Restricted Definitive Securities accepted for exchange in the Exchange
Offer. Concurrently with the issuance of such Unrestricted Global Securities and
Definitive Securities, the Trustee shall cause the aggregate principal amount
of the applicable Restricted Global Securities to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Securities so accepted
Definitive Securities in the appropriate Principal amount.


 


(g)                                 Legends. The following legends shall
appear on the face of all Global Securities and Definitive Securities issued
under this Indenture unless specifically stated otherwise in the applicable
provisions of this Indenture.


 


(i)                                     Private Placement Legend.


 


(1)          Except
as permitted by subparagraph (B) below, each Global Security and each
Definitive Security (and all Notes issued in exchange therefor or substitution
thereof) shall bear the legend in substantially the following form:


 


31

















 


“THIS NOTE AND
THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘SECURITIES ACT’’), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE, THE GUARANTEES
ENDORSED HEREON NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM OR
NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER
OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON, BY ITS ACCEPTANCE HEREOF,
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE
WHICH IS [IN THE CASE OF RULE 144A NOTES: ONE
YEAR] [IN THE CASE OF REGULATION S NOTES: 40
DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE
AND THE GUARANTEES ENDORSED HEREON (OR ANY PREDECESSOR OF THIS NOTE AND THE
GUARANTEES ENDORSED HEREON) (THE ‘‘RESALE RESTRICTION TERMINATION DATE’’), ONLY
(A) TO THE COMPANY, OI GROUP OR ANY SUBSIDIARY THEREOF, (B) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR
SO LONG AS THE NOTES AND THE GUARANTEES ENDORSED THEREON ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (‘‘RULE 144A’’), TO A
PERSON IT REASONABLY BELIEVES IS A ‘‘QUALIFIED INSTITUTIONAL BUYER’’ AS DEFINED
IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF AND
IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT
TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER (1) PURSUANT TO CLAUSE (D) PRIOR TO THE
END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO
THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (2) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE 


 


32

















 


TRUSTEE. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.


 


(2)          Notwithstanding
the foregoing, any Global Security or Definitive Security issued pursuant to
subparagraph (b)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of
this Section 2.06 or any Global Security or Definitive Security initially
issued by the Company pursuant to an effective registration statement under the
Securities Act (and all Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.


 


(ii)                                  Global Security Legend. 
Each Global Security shall bear a legend in substantially the following
form:


 


“THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF
THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS
HEREON AS MAY BE REQUIRED PURSUANT TO THE INDENTURE, (II) THIS GLOBAL
SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF
THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.10 OF THE INDENTURE AND (IV) THIS
GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE COMPANY.


 


UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.  UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”) TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.


 


BY ACCEPTANCE OF THIS NOTE, EACH PURCHASER AND SUBSEQUENT TRANSFEREE OF
THIS NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED AND
WARRANTED THAT EITHER (A) 


 


33

















 


NO PORTION OF THE ASSETS USED BY SUCH
PURCHASER OR TRANSFEREE TO ACQUIRE OR HOLD THIS NOTE OR ANY INTEREST HEREIN
CONSTITUTES ASSETS OF ANY EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (‘‘ERISA’’))
WHICH IS SUBJECT TO TITLE I OF ERISA, ANY PLAN, INDIVIDUAL RETIREMENT ACCOUNT
OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE ‘‘CODE’’), OR PROVISIONS UNDER ANY
FEDERAL, STATE, LOCAL, NON-UNITED STATES OR OTHER LAWS OR REGULATIONS THAT ARE
SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, ‘‘SIMILAR LAWS’’),
OR ANY ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE ‘‘PLAN ASSETS’’
OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT OR (B) THE ACQUISITION AND
HOLDING OF THIS NOTE OR ANY INTEREST HEREIN WILL NOT CONSTITUTE A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE OR ANY SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.”


 


(iii)                               Regulation S Legends. 
The Regulation S Temporary Global Security shall bear a legend in
substantially the following form:


 


“THE RIGHTS
ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL SECURITY, AND THE CONDITIONS
AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED SECURITIES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL SECURITY SHALL BE
ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.”


 


All Notes
issued or exchanged under this Indenture pursuant to Regulation S shall bear a
legend in substantially the following form:


 


“BY ITS
ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON,
NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON, AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT.”


 


(iv)                              OID Legend.  All Notes
issued or exchanged under the Indenture shall bear a legend in substantially
the following form:


 


“THIS NOTE IS
ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ.
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. A HOLDER MAY OBTAIN THE
ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO
MATURITY FOR SUCH NOTE BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO
OWENS-ILLINOIS GROUP, INC. 


 


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AT THE
FOLLOWING ADDRESS: ONE MICHAEL OWENS WAY, PERRYSBURG, OHIO 43551, ATTENTION:
GENERAL COUNSEL.”


 


(h)                                 Cancellation and/or Adjustment of
Global Securities.
At such time as all beneficial interests in a particular Global Security have
been exchanged for Definitive Securities or a particular Global Security has
been redeemed, repurchased or canceled in whole and not in part, each such
Global Security shall be returned to or retained and canceled by the Trustee in
accordance with Section 2.10. At any time prior to such cancellation, if
any beneficial interest in a Global Security is exchanged for or transferred to
a Person who will take delivery thereof in the form of a beneficial interest in
another Global Security or for Definitive Securities, the principal amount of
Notes represented by such Global Security shall be reduced accordingly and an
endorsement shall be made on such Global Security by the Trustee or by the
Depositary at the direction of the Trustee to reflect such reduction; and if
the beneficial interest is being exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another
Global Security, such other Global Security shall be increased accordingly and
an endorsement shall be made on such Global Security by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.


 


(i)                                     General Provisions Relating to
Transfers and Exchanges.


 


(i)                                     Where Notes are presented to the Registrar or
a co-Registrar with a request to register a transfer or to exchange them for an
equal principal amount of Notes of other authorized denominations, the
Registrar shall register the transfer or make the exchange if its requirements
for such transactions are met.  To permit
registrations of transfers and exchanges, the Company shall issue and the
Trustee shall authenticate Global Securities and Definitive Securities at the
Registrar’s request.


 


(ii)                                  No service charge shall be made for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.09, 3.06 or
9.04).


 


(iii)                               All
Global Securities and Definitive Securities issued upon any registration of
transfer or exchange of Global Securities or Definitive Securities shall be the
valid obligations of the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Global Securities or Definitive
Securities surrendered upon such registration of transfer or exchange.


 


(iv)                              The
Company and the Registrar shall not be required (A) to issue, to register
the transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 and ending at the close of business on the
day of selection, (B) to register the transfer of or to exchange any Note
so selected for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part or (c) to register the transfer of or
to exchange a Note between a record date and the next succeeding Interest
Payment Date.


 


35
















 


(v)                                 Prior
to due presentment for the registration of a transfer of any Note, the Trustee,
any Agent and the Company may deem and treat the Person in whose name any Note
is registered as the absolute owner of such Note for the purpose of receiving
payment of Principal of and interest on such Notes and for all other purposes,
and none of the Trustee, any Agent or the Company shall be affected by notice
to the contrary.


 


(vi)                              The
Trustee shall authenticate Global Securities and Definitive Securities in
accordance with the provisions of Section 2.02.


 


(vii)                           All
certifications, certificates and Opinions of Counsel required to be submitted
to the Registrar pursuant to this Section 2.06 to effect a registration of
transfer or exchange may be submitted by facsimile.


 


(viii)                        Each
Holder of a Note agrees to indemnify the Company and the Trustee against any
liability that may result from the transfer, exchange or assignment of such
Holder’s Note in violation of any provision of this Indenture and/or applicable
United States federal or state securities law.


 


The Trustee
shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any Note
(including any transfers between or among Depositary Participants or beneficial
owners of interests in any Global Security) other than to require delivery of
such certificates and other documentation or evidence as are expressly required
by, and to do so if and when expressly required by the terms of, this
Indenture, and to examine the same to determine substantial compliance as to
form with the express requirements hereof.


 


Notes issued
in global form shall be substantially in the form of Exhibits D-1 or D-2
attached hereto (including the Global Security Legend thereon and the “Schedule
of Exchanges of Interests in the Global Note” attached thereto).  Notes issued in definitive form shall be
substantially in the form of Exhibit D-1 attached hereto (but without the
Global Security Legend thereon and without the “Schedule of Exchanges of
Interests in the Global Note” attached thereto).


 


Section 2.07.                         Replacement Notes.


 


If a mutilated Note is
surrendered to the Trustee or if the Holder of a Note claims that the Note has
been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Note if the Company’s and the Trustee’s
requirements are met. The Trustee or the Company may require an indemnity bond
to be furnished which is sufficient in the judgment of both to protect the
Company, the Trustee, and any Agent from any loss which any of them may suffer
if a Note is replaced. The Company may charge such Holder for its expenses in
replacing a Note.


 


Every replacement Note is an
obligation of the Company and shall be entitled to all the benefit of this
Indenture equally and proportionately with any and all other Notes.


 


36

















 


Section 2.08.                         Outstanding Notes.


 


The Notes outstanding at any
time are all the Notes authenticated by the Trustee, except for those cancelled
by it, those delivered to it for cancellation, and those described in this Section 2.08
as not outstanding.  Except as set forth
in the final paragraph of this Section 2.08, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note.


 


If a Note is replaced
pursuant to Section 2.07, it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Note is held by a bona fide
purchaser.


 


If Notes are considered paid
under Section 4.01, they cease to be outstanding and interest on them
ceases to accrue.


 


In determining
whether the Holders of the required principal amount of Notes have concurred in
any direction, waiver or consent, Notes owned by the Company, or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company, shall be considered as though not outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Notes as to
which a Trust Officer of the Trustee has actual knowledge are so owned shall be
so disregarded.  Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company shall not be deemed
to be outstanding for purposes of Section 3.07.


 


Section 2.09.                         Temporary Notes.


 


Until definitive Notes are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Notes upon a written order of the Company signed by two Officers of
the Company.  Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes.  Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate definitive Notes in exchange for
temporary Notes.


 


Holders of temporary Notes
shall be entitled to all of the benefits of this Indenture.


 


Section 2.10.                         Cancellation.


 


The Company at any time may
deliver Notes to the Trustee for cancellation. 
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment.  The Trustee shall cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and the Trustee shall destroy cancelled Notes and provide a
certificate of destruction to the Company. 
The Company may not issue new Notes to replace Notes that it has paid or
that have been delivered to the Trustee for cancellation.


 


37

















 


Section 2.11.                         Defaulted Interest.


 


If the Company fails to make
a payment of interest on the Notes, it shall pay such defaulted interest plus
(to the extent lawful) any interest payable on the defaulted interest, in any
lawful manner. It may elect to pay such defaulted interest, plus any such
interest payable on it, to the Persons who are Holders of such Notes on which
the interest is due on a subsequent special record date, which special record
date shall be fixed in the following manner. 
The Company shall notify the Trustee in writing of the amount of
defaulted interest proposed to be paid on each Note and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money in the currency or currency unit in which the Notes
are payable, equal to the aggregate amount proposed to be paid in respect of
such defaulted interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
defaulted interest.  Thereupon the
Company shall fix a special record date for the payment of such defaulted
interest which shall be not more than 15 days and not less than 10 days prior
to the date of the proposed payment.  The
Company shall cause notice of the proposed payment of such defaulted interest
and the special record date therefor to be mailed, first-class postage prepaid,
to each Holder of Notes at the address as it appears in the register of Notes
referred to in Section 2.03, not less than 10 days prior to such special
record date.  Notice of the proposed
payment of such defaulted interest and the special record date therefor having
been so mailed, defaulted interest shall be paid to the Persons in whose names
the Notes are registered at the close of business on such special record date.


 


Section 2.12.                         Special Record Dates.


 


(a)                                  The Company may, but shall not
be obligated to, set a record date for the purpose of determining the identity
of Holders entitled to consent to any supplement, amendment or waiver permitted
by this Indenture.  If a record date is
fixed, the Holders of Notes outstanding on such record date, and no other
Holders, shall be entitled to consent to such supplement, amendment or waiver
or revoke any consent previously given, whether or not such Holders remain
Holders after such record date.  No
consent shall be valid or effective for more than 90 days after such record
date unless consents from Holders of the principal amount of Notes required
hereunder for such amendment or waiver to be effective shall have also been
given and not revoked within such 90-day period.


 


(b)                                 The Company may, but shall not
be obligated to, fix any day as a record date for the purpose of determining
the Holders of Notes entitled to join in the giving or making of any notice of
Default, any declaration of acceleration, any request to institute proceedings
or any other similar direction.  If a
record date is fixed, the Holders of Notes outstanding on such record date, and
no other Holders, shall be entitled to join in such notice, declaration,
request or direction, whether or not such Holders remain Holders after such
record date; provided, however, that no such
action shall be effective hereunder unless taken on or prior to the date 90
days after such record date.


 


(c)                                  The Company, in the event of
defaulted interest, shall set a special record date in accordance with Section 2.11.


 


38

















 


Section 2.13.                         CUSIP and ISIN Numbers.


 


The Company in
issuing Notes may use “CUSIP” or “ISIN” numbers or both numbers, and, if so
used, the Trustee shall use such “CUSIP” or “ISIN” numbers or both numbers in
notices as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on such Notes or as contained in
any notice and that reliance may be placed only on the other identification
numbers printed on such Notes, and any such action relating to such notice
shall not be affected by any defect in or omission of such numbers in such
notice.  The Company shall promptly
notify the Trustee of any change in the “CUSIP” or “ISIN” numbers.


 


ARTICLE 3.



REDEMPTION


 


Section 3.01.                         Notices to Trustee.


 


If the Company
elects to redeem Notes pursuant to Section 3.07 hereof or any change of
control provisions hereof, it shall notify the Trustee of the redemption date
and the principal amount of Notes to be redeemed.


 


The Company
shall give the notice provided for in this Section at least 45 days before
the redemption date (unless a shorter notice period shall be satisfactory to
the Trustee), which notice shall specify the provisions of such Notes pursuant
to which the Company elects to redeem such Notes.


 


Section 3.02.                         Selection of Notes to Be
Redeemed.


 


If less than
all of the outstanding Notes are to be redeemed at any time, the Trustee shall
select Notes for redemption as follows:


 


(1)                                  if
the Notes are listed, in compliance with the requirements of the principal
national securities exchange on which the Notes are listed (as certified to the
Trustee by the Company); or


 


(2)                                  if
the Notes are not so listed, on a pro rata basis, by lot or by such method as
the Trustee shall deem fair and appropriate.


 


Notes and portions
thereof that the Trustee selects shall be in amounts of $2,000 and integral
multiples of $1,000 in excess thereof. Provisions of this Indenture that apply
to Notes called for redemption also apply to portions of Notes called for
redemption.  The Trustee shall notify the
Company promptly in writing of the Notes or portions of Notes to be called for
redemption.


 


Section 3.03.                         Notice of Redemption.


 


At least 10
days but not more than 60 days before a redemption date, the Company shall mail
a notice of redemption to each Holder whose Notes are to be redeemed at


 


39

















 


the address of such Holder as it appears in the Register of Notes
referred to in Section 2.03. 
Notices of redemption shall not be conditional.


 


If any Note is
to be redeemed in part only, the notice of redemption that relates to that Note
shall state the portion of the principal amount thereof to be redeemed. A new
Note in principal amount equal to the unredeemed portion of the original Note
shall be issued in the name of the Holder thereof upon cancellation of the
original Note.


 


The notice
shall identify the Notes to be redeemed and shall state:


 


(1)                                  the
redemption date;


 


(2)                                  the
redemption price fixed in accordance with the terms of the Notes to be
redeemed, plus accrued interest, if any, to the date fixed for redemption (the “redemption price”);


 


(3)                                  if
any Note is being redeemed in part, the portion of the principal amount of such
Note to be redeemed and that, after the redemption date, upon surrender of such
Note, a new Note or Notes in principal amount equal to the unredeemed portion
shall be issued;


 


(4)                                  the
name and address of the Paying Agent;


 


(5)                                  that
Notes called for redemption must be surrendered to the Paying Agent to collect
the redemption price;


 


(6)                                  that,
unless the Company defaults in payment of the redemption price, interest on
Notes called for redemption ceases to accrue on and after the redemption date;
and


 


(7)                                  the
CUSIP number or ISIN number, if any, of the Notes to be redeemed.


 


At the Company’s
request, the Trustee shall give the notice of redemption in the Company’s name
and at its expense.  The notice mailed in
the manner herein provided shall be conclusively presumed to have been duly
given whether or not the Holder receives such notice.  In any case, failure to give such notice by
mail or any defect in the notice of the Holder of any Note shall not affect the
validity of the proceeding for the redemption of any other Note.


 


Section 3.04.                         Effect of Notice of Redemption.


 


Once notice of
redemption is mailed in accordance with Section 3.03, Notes called for
redemption become due on the date fixed for redemption.  Upon surrender to the Paying Agent, such
Notes shall be paid at the redemption price. 
On and after the redemption date, interest ceases to accrue on the Notes
or portions of them called for redemption.


 


Section 3.05.                         Deposit of Redemption Price.


 


On or before
10:00 a.m. New York City time on the redemption date, the Company shall
deposit with the Paying Agent (or, if the Company or any Affiliate is the
Paying Agent, shall segregate and hold in trust) money sufficient to pay the
redemption price of all


 


40

















 


Notes called for redemption on that date other than Notes that have
previously been delivered by the Company to the Trustee for cancellation.  The Paying Agent shall return to the Company
any money not required for that purpose.


 


Section 3.06.                         Notes Redeemed in Part.


 


Upon surrender
of a Note that is redeemed in part, the Company shall issue and the Trustee
shall authenticate for the Holder at the expense of the Company a new Note
equal in principal amount to the unredeemed portion of the Note surrendered.


 


Section 3.07.                         Optional Redemption.


 


The Notes are
redeemable at the Company’s option prior to May 15, 2016, as described in
this Section 3.07.


 


(a)                                  At
any time prior to May 15, 2012, the Company may redeem on any one or more
occasions up to 40% of the aggregate principal amount of the Notes (calculated
after giving effect to any issuance of Additional Securities) issued under this
Indenture at a redemption price of 107.375% of the principal amount thereof
plus accrued and unpaid interest and Additional Interest, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings by
OI Inc. to the extent the net cash proceeds thereof are contributed to the
Company or used to purchase from the Company Capital Stock (other than
Disqualified Stock) of the Company; provided that:


 


(1)                                  at
least 60% of the aggregate principal amount of the Notes (calculated after
giving effect to any issuance of Additional Securities) issued under this
Indenture remains outstanding immediately after the occurrence of such
redemption of Notes (excluding Notes held by OI Inc. and its Subsidiaries); and


 


(2)                                  the
redemption must occur within 60 days of the date of the closing of such Equity
Offering.


 


(c)                                  At
any time prior to May 15, 2016, the Company may redeem all or a part of
the Notes, upon not less than 10 nor more than 60 days’ prior notice mailed by
first-class mail to each Holder’s registered address, at a redemption price
equal to the greater of:


 


(1)                                  100%
of the principal amount of the Notes to be redeemed; and


 


(2)                                  the
present value at the redemption date (in each case, discounted from the
applicable scheduled payment date) of (1) 100% of the principal amount of
the Notes to be redeemed plus (2) the
remaining scheduled payments of interest from the redemption date through
maturity (but excluding accrued and unpaid interest to the redemption date),
computed using a discount rate equal to the Treasury Rate (determined on the
second Business Day immediately preceding the date of redemption) plus 50 basis
points, plus, in either case,
accrued and unpaid interest and Additional Interest, if any, to, the date of
redemption (subject to the right of Holders of record on the


 


41

















 


relevant record date to receive
interest due on the Notes on the relevant Interest Payment Date).


 


‘‘Treasury
Rate’’ means, as of any redemption date, the yield to maturity as of such
redemption date of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical
Release H.15(519) that has become publicly available at least two Business Days
prior to the redemption date (or, if such statistical release is no longer
published, any publicly available source of similar market data)) most nearly
equal to the period from the redemption date to May 15, 2016; provided, however, that
if the period from the redemption date to May 15, 2016 is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.


 


Section 3.08.                         Mandatory Redemption.


 


The Company
shall not be required to make mandatory redemption or sinking fund payments
with respect to the Notes.


 


ARTICLE 4.



COVENANTS


 


Section 4.01.                         Payment of Securities.


 


The Company
shall pay or cause to be paid the Principal of and interest on the Notes on the
dates and in the manner provided in this Indenture and the Notes. Principal and
interest shall be considered paid on the date due if the Paying Agent, if other
than the Company or an Affiliate, holds as of 10:00 a.m. Eastern Time on
that date immediately available funds designated for and sufficient to pay all
Principal and interest then due.  The
Company shall pay Additional Interest, if any, in the same manner on the dates
and in the amounts set forth in the Registration Rights Agreement.


 


To the extent
lawful, the Company shall pay interest on overdue Principal and overdue
installments of interest at the rate per annum borne by the Notes.


 


Section 4.02.                         Maintenance of Office or Agency.


 


The Company
shall maintain in the Borough of Manhattan, The City of New York, an office or
agency (which may be an office of the Trustee or an affiliate of the Trustee or
Registrar) where Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee. The Company may also from
time to time designate one or more other offices or agencies where the Notes
may be presented or surrendered for any or all such 


 


42

















 


purposes and may from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, The
City of New York for such purposes. The Company shall give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency. The Company hereby designates the
Corporate Trust Office of the Trustee as one such office or agency of the
Company in accordance with Section 2.03.


 


Section 4.03.                         Commission Reports.


 


Whether or not required by the Commission, so long as any Notes are
outstanding, OI Group shall furnish to the Holders of any Notes, within
the time periods specified in the Commission’s rules and regulations:


 


(1)                                  all
quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if
OI Group were required to file such Forms, including a “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and,
with respect to the annual information only, a report on the annual financial
statements by OI Group’s independent registered public accountants; and


 


(2)                                  all
current reports that would be required to be filed with the Commission on Form 8-K
if OI Group were required to file such reports.


 


In addition,
whether or not required by the Commission, OI Group shall file a copy
of all of the information and reports referred to in clauses (1) and (2) above
with the Commission for public availability within the time periods specified
in the Commission’s rules and regulations (unless the Commission shall not
accept such a filing) and make such information available to securities
analysts and prospective investors upon request. In addition, for so long as
any Notes remain outstanding, the Company and the Guarantors of the Notes shall
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act.


 


OI Group shall
deliver to the Trustee within 15 days after it files them with the Commission
copies of the annual reports and of the information, documents, and other
reports (or copies of such portions of any of the foregoing as the Commission
may by rules and regulations prescribe) that OI Group is required to file
with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act; provided, however, the
Company shall not be required to deliver to the Trustee any materials for which
OI Group has sought and received confidential treatment by the Commission. OI
Group also shall comply with the other provisions of TIA Section 314(a).


 


Delivery of
such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company’s or the Guarantors’
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers’ Certificates).  The Trustee is


 


43

















 


under no duty to examine such reports, information or documents to ensure
the compliance with the provisions of this Indenture or to ascertain the
correctness of the information or statements contained therein.  The Trustee is entitled to assume such
compliance and correctness unless a Responsible Officer of the Trustee is informed
in writing otherwise.


 


Section 4.04.                         Compliance Certificate.


 


The Company
shall deliver to the Trustee, within 120 days after the end of each fiscal year
of the Company, an Officers’ Certificate stating that in the course of the
performance by the signers of their duties as officers of the Company, they
would normally have knowledge of any failure by the Company to comply with all
conditions, or default by the Company with respect to any covenants, under this
Indenture, and further stating whether or not they have knowledge of any such
failure or default and, if so, specifying each such failure or default and the
nature thereof. For purposes of this Section, such compliance shall be
determined without regard to any period of grace or requirement of notice
provided for in this Indenture.


 


The Company
shall, so long as any of the Notes are outstanding, deliver to the Trustee,
forthwith upon becoming aware of any Default or Event of Default, an Officers’
Certificate specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.


 


Section 4.05.                         Taxes.


 


The Company
shall pay prior to delinquency, all material taxes, assessments, and
governmental levies except as contested in good faith by appropriate
proceedings.


 


Section 4.06.                         Stay, Extension and Usury Laws.


 


The Company
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay, extension or usury law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.


 


Section 4.07.                         Corporate Existence.


 


Subject to Article 5,
OI Group shall do or cause to be done all things necessary to preserve and keep
in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in accordance with
the respective organizational documents (as the same may be amended from time
to time) of each Subsidiary and (ii) the rights (charter and statutory),
licenses and franchises of OI Group and its Subsidiaries; provided, however, that OI Group shall not
be required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Subsidiaries, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the


 


44

















 


conduct of the business of OI Group and its Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
Holders.


 


Section 4.08.                         [Intentionally Omitted]


 


Section 4.09.                         Fall-Away Event.


 


If at any time
the Notes have achieved the Investment Grade Ratings, OI Group and the
Restricted Subsidiaries of OI Group shall thereafter no longer be subject to
the covenants under Sections 4.11, 4.12, 4.13, 4.14 (other than the provisions
described in the next paragraph), 4.15, 4.16 and 4.17, clause (4) of the
first paragraph of Section 5.01 and Section 10.08 (collectively, the “Extinguished Covenants”) (even if the
Notes subsequently cease to have the Investment Grade Ratings), provided that if upon the receipt by the
Notes of the Investment Grade Ratings, a Default or Event of Default has
occurred and is continuing under this Indenture, the Company shall continue to
be subject to the Extinguished Covenants until such time as no Default or Event
of Default is continuing.


 


Notwithstanding
the foregoing, at the time OI Group and the Restricted Subsidiaries are no
longer subject to the Extinguished Covenants, the following covenant shall
apply to OI Group and its Domestic Subsidiaries: neither OI Group nor any of
its Domestic Subsidiaries shall create, incur, or permit to exist, any Lien on
any of their respective assets, whether now owned or hereafter acquired, in
order to secure any Indebtedness of either of OI Group or any of its Domestic
Subsidiaries, without effectively providing that the Notes shall be equally and
ratably secured until such time as such Indebtedness is no longer secured by
such Lien, except: (i) Liens on cash and Cash Equivalents securing
obligations in respect of letters of credit in accordance with the terms of the
Credit Agreement; (ii) Liens existing on the Issue Date; (iii) Liens
granted after the Issue Date on any assets of OI Group or any of its Domestic
Subsidiaries securing Indebtedness of OI Group or any of its Domestic
Subsidiaries created in favor of the Holders of the Notes; (iv) Liens
securing Indebtedness which is incurred to extend, renew or refinance
Indebtedness which is secured by Liens permitted to be incurred under this
Indenture; provided that such Liens do not extend
to or cover any assets of OI Group or any of its Domestic Subsidiaries other
than the assets securing the Indebtedness being extended, renewed or refinanced
and that the principal or commitment amount of such Indebtedness does not
exceed the principal or commitment amount of the Indebtedness being extended,
renewed or refinanced at the time of such extension, renewal or refinancing, or
at the time the Lien was issued, created or assumed or otherwise permitted; (v) Investment
Grade Permitted Liens; or (vi) Liens created in substitution of or as
replacement for any Liens permitted by the preceding clauses (i) through (v) or
this clause (vi), provided that, based on a good
faith determination of an officer of the Company, the assets encumbered under
any such substitute or replacement Lien is substantially similar in value to
the assets encumbered by the otherwise permitted Lien which is being replaced.
Upon the assignment of the Company’s obligations under this Indenture to OI
Inc. as described in Section 5.03 of this Indenture, the limitations
described in this paragraph shall apply to Liens securing Indebtedness of OI
Inc. and its Domestic Subsidiaries in lieu of Liens securing Indebtedness of OI
Group and its Domestic Subsidiaries, and references to OI Group or the Company
in the definition of “Investment Grade Permitted Liens” shall become references
to OI Inc., unless the context otherwise requires.


 


45
















 


So long as the
Credit Agreement is in effect, if the Notes are secured pursuant to the
preceding paragraph, the Notes shall be considered equally and ratably secured
if they are secured pursuant to terms and provisions, including any collateral
or other exclusions or exceptions described therein, no less favorable to the
holders of Notes than those set forth in, or contemplated by, the Credit
Agreement with respect to any Specified New Senior Debt.


 


Section 4.10.                         Offer to Repurchase Upon a
Change of Control.


 


If a Change of
Control occurs, unless the Company has exercised its right to redeem the Notes
under Section 3.07, each Holder of Notes shall have the right to require
the Company to repurchase all or any part (equal to $2,000 or integral
multiples of $1,000 in excess thereof) of that Holder’s Notes pursuant to a
change of control offer on the terms set forth in this Indenture (a “Change of Control Offer”). In the Change
of Control Offer, the Company shall offer a payment in cash equal to 101% of
the aggregate principal amount of Notes repurchased plus accrued and unpaid
interest and Additional Interest, if any, thereon, to the date of purchase (the
“Change of Control Payment”).
Within 30 days following any Change of Control, the Company shall mail a notice
to each Holder at its registered address. 
The notice shall contain all instructions and materials necessary to
enable such Holder to tender Notes pursuant to the Change of Control Offer.  Any Change of Control Offer shall be made to
all Holders.  The notice, which shall
govern the terms of the Change of Control Offer, shall state: (1) that the
Change of Control Offer is being made pursuant to this Section 4.10; (2) the
Change of Control Payment and the date on which Notes tendered and accepted for
payment shall be purchased, which date shall be no earlier than 30 days and no
later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”); (3) that
any Note not tendered or accepted for payment shall continue to accrete or accrue
interest; (4) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Change of Control Offer shall
cease to accrete or accrue interest after the Change of Control Payment Date; (5) that
Holders electing to have a Note purchased pursuant to any Change of Control
Offer shall be required to surrender the Note, with the form entitled “Option
of Holder to Elect Purchase” on the reverse of the Note completed, or transfer
by book-entry transfer, to the Company, a depositary, if appointed by the
Company, or the Paying Agent at the address specified in the notice at least
three days before the Change of Control Payment Date; (6) that Holders
shall be entitled to withdraw their election if the Company, the depositary or
the Paying Agent, as the case may be, receives, not later than the Change of
Control Payment Date, a notice setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Note purchased; (7) that
Notes and portions of Notes purchased shall be in amounts equal to $2,000 or
integral multiples of $1,000 in excess thereof, except that if all of the Notes
of a Holder are to be purchased, the entire outstanding amount of Notes held by
such Holder, even if not a multiple of $1,000, shall be purchased; and (8) that
Holders whose Notes were purchased only in part shall be issued new Notes equal
in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer), which unpurchased portion must be equal to
$1,000 in principal amount or an integral multiple thereof.  The Company shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the Change of Control provisions of this


 


46

















 


Indenture, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
the Change of Control provisions of this Indenture by virtue of such conflict.


 


On the Change
of Control Payment Date, the Company shall, to the extent lawful:


 


(1)                                  accept
for payment all Notes or portions thereof properly tendered pursuant to the
Change of Control Offer;


 


(2)                                  deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions thereof so tendered; and


 


(3)                                  deliver
or cause to be delivered to the Trustee the Notes so accepted together with an
Officers’ Certificate stating the aggregate principal amount of Notes or
portions thereof being purchased by the Company.


 


The Paying
Agent shall promptly mail to each Holder of Notes so tendered the Change of
Control Payment for such Notes, and the Trustee shall promptly authenticate and
mail (or cause to be transferred by book entry) to each Holder a new Note equal
in principal amount to any unpurchased portion of the Notes surrendered, if
any; provided that each such new
Note shall be in a principal amount of equal to $2,000 or an integral multiple
of $1,000 in excess thereof.


 


The Company
shall publicly announce the results of the Change of Control Offer on or as
soon as practicable after the Change of Control Payment Date.


 


The provisions
set forth above that require the Company to make a Change of Control Offer
following a Change of Control shall be applicable regardless of whether or not
any other provisions of this Indenture are applicable.


 


Notwithstanding
anything to the contrary in this Section 4.10, the Company shall not be
required to make a Change of Control Offer upon a Change of Control if a third
party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in this Section 4.10
and purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.


 


Section 4.11.                         Asset Sales.


 


OI Group shall
not, and shall not permit any of its Restricted Subsidiaries to, consummate an
Asset Sale unless:


 


(4)                                  OI
Group (or the Restricted Subsidiary, as the case may be) receives consideration
at the time of such Asset Sale at least equal to the Fair Market Value of the
assets or Equity Interests issued or sold or otherwise disposed of;


 


47

















 


(5)                                  such
Fair Market Value is determined in good faith by OI Group and a certification
to that effect is set forth in an Officers’ Certificate delivered to the
Trustee; and


 


(6)                                  at
least 75% of the consideration therefor received by OI Group or such Restricted
Subsidiary is in the form of cash. For purposes of this provision, each of the
following shall be deemed to be cash:


 


(a)                                  any
liabilities (as shown on OI Group’s or such Restricted Subsidiary’s most recent
balance sheet) of OI Group or any Restricted Subsidiary of OI Group (other than
liabilities that are by their terms subordinated to the Notes or any Guarantee
of the Notes) that are assumed by the transferee of any such assets which
assumption releases OI Group or such Restricted Subsidiary from further
liability;


 


(b)                                 any
securities, notes or other obligations received by OI Group or any such
Restricted Subsidiary from such transferee that are converted within 180 days
by OI Group or such Restricted Subsidiary into cash (to the extent of the cash
received in that conversion); and


 


(c)                                  any
Designated Noncash Consideration received by OI Group or any Restricted
Subsidiary of OI Group in such Asset Sale having an aggregate Fair Market
Value, taken together with all other Designated Noncash Consideration received
pursuant to this clause (c) that is at that time outstanding, not to
exceed 5.0% of Tangible Assets at the time of the receipt of such Designated
Noncash Consideration (with the Fair Market Value of each item of Designated
Noncash Consideration being measured at the time received and without giving
effect to subsequent changes in value);


 


provided, that the 75% limitation referred to
in clause (3) above shall not apply to any Asset Sale in which the cash
portion of such consideration received therefor on an after-tax basis,
determined in accordance with clause (3) above, is equal to or greater
than what the after-tax net proceeds would have been had such transaction
complied with such 75% limitation.


 


Within 360
days after the receipt of any Net Proceeds from an Asset Sale, OI Group or such
Restricted Subsidiary may apply such Net Proceeds at its option:


 


(1)                                  to
repay senior Indebtedness of the Company or any Guarantor (including the
Existing Senior Notes issued by OI European Group B.V.) and, if the senior
Indebtedness of the Company or any Guarantor repaid is revolving credit
Indebtedness, to correspondingly reduce commitments with respect thereto, if
the terms of such revolving credit Indebtedness would require such a commitment
reduction; provided, however,
that a non-Guarantor Restricted Subsidiary may use the Net Proceeds from an
Asset Sale to


 


48

















 


repay senior
Indebtedness of OI Group or any Restricted Subsidiary of OI Group;


 


(2)                                  to
make payments required to be made with respect to the outstanding OI Inc.
Senior Notes;


 


(3)                                  to
acquire all or substantially all of the assets of, or a majority of the Voting
Stock of, a Permitted Business;


 


(4)                                  to
make a capital expenditure in or that is used or useful in a Permitted
Business;


 


(5)                                  to
acquire other long-term assets in or that are used or useful in a Permitted
Business; or


 


(6)                                  to
make an Investment in any one or more businesses (provided
that such Investment in any business may be in the form of the acquisition of
Capital Stock so long as it results in OI Group or a Restricted Subsidiary of
OI Group, as the case may be, owning a majority of the Capital Stock of such
business), properties or assets that replace the businesses, properties and
assets that are the subject of such Asset Sale; provided,
however, that any such business,
properties and assets of OI Group or a Guarantor that are the subject of an
Asset Sale are invested in one or more businesses, properties or assets that
constitute or are owned or shall be owned by a Guarantor or a Restricted
Subsidiary that becomes a Guarantor.


 


Pending the
final application of any such Net Proceeds, OI Group or the applicable
Restricted Subsidiary may temporarily reduce revolving credit borrowings or
otherwise invest such Net Proceeds in any manner that is not prohibited by this
Indenture.


 


Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the
preceding paragraph shall constitute “Excess
Proceeds.”  When the aggregate
amount of Excess Proceeds exceeds $25.0 million, the Company shall make an
offer (an “Asset Sale Offer”) to
all Holders of Notes and all Holders of other Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth in this Indenture with respect to offers
to purchase or redeem with the proceeds of sales of assets (including the
Existing Senior Notes issued by the Company) to purchase the maximum principal
amount of Notes and such other pari passu
Indebtedness that may be purchased out of the Excess Proceeds. The offer price
in any Asset Sale Offer shall be equal to 100% of principal amount plus accrued
and unpaid interest and Additional Interest, if any, to the date of purchase,
and shall be payable in cash. If any Excess Proceeds remain after consummation
of an Asset Sale Offer, the Company may use such Excess Proceeds for any
purpose not otherwise prohibited by this Indenture. If the aggregate principal
amount of Notes and such other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on
a pro rata basis based on the principal amount of


 


49

















 


Notes and such other pari passu
Indebtedness tendered. Upon completion of each Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero.


 


The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with each repurchase of Notes
pursuant to an Asset Sale Offer. To the extent that the provisions of any
securities laws or regulations conflict with the Asset Sales provisions of this
Indenture, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under the
Asset Sale provisions of this Indenture by virtue of such conflict.


 


Section 4.12.                         Restricted Payments.


 


OI Group shall
not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly:


 


(1)                                  declare
or pay any dividend or make any other distribution on account of OI Group’s or
any of its Restricted Subsidiaries’ Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation
involving OI Group or any of its Restricted Subsidiaries) or to the direct or
indirect holders of OI Group’s or any of its Restricted Subsidiaries’ Equity
Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of OI Group or such
Restricted Subsidiaries); provided
that the foregoing shall not limit or preclude: (a) the declaration or
payment of dividends or distributions to OI Group, the Company or any
Guarantor; (b) the declaration or payment of dividends or distributions to
holders of Equity Interests of a Guarantor (other than OI Group or a Subsidiary
of OI Group) on a pro rata basis with all other holders; or (c) the
declaration or payment of dividends or distributions by non-Guarantor
Restricted Subsidiaries to the holders of their Equity Interests on a pro rata
basis;


 


(2)                                  purchase,
redeem or otherwise acquire or retire for value (including, without limitation,
in connection with any merger or consolidation involving OI Group or any of its
Restricted Subsidiaries) any Equity Interests of OI Group or any direct or
indirect parent of OI Group;


 


(3)                                  purchase,
redeem, defease or otherwise acquire or retire for value any Indebtedness that
is subordinated to the Notes or the Guarantees of the Notes, except for (a) payments
of or related to Intercompany Indebtedness (other than Intercompany
Indebtedness owing to OI Inc. by OI Group), (b) a payment of interest or
Principal at the Stated Maturity thereof (other than Intercompany Indebtedness
owing to OI Inc. by OI Group) or (c) the purchase, repurchase, defeasance,
acquisition or retirement for value of Indebtedness of a Foreign Subsidiary by
a Foreign Subsidiary; or


 


50

















 


(4)                                  make
any Restricted Investment (all such payments and other actions set forth in
clauses (1) through (4) being collectively referred to as “Restricted Payments”),


 


unless, at the
time of and after giving effect to such Restricted Payment:


 


(1)                                  no
Default or Event of Default shall have occurred and be continuing or would
occur as a consequence thereof; and


 


(2)                                  OI
Group would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.13; and


 


(3)                                  such
Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by OI Group and its Restricted Subsidiaries after the Issue Date
(excluding Restricted Payments permitted by clauses (2), (3), (4), (6) and
(7) of the next succeeding paragraph), is less than the sum, without
duplication, of:


 


(a)                                  50%
of the Consolidated Net Income of OI Group for the period (taken as one
accounting period) from April 1, 2007 to the end of OI Group’s most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit), plus


 


(b)                                 100%
of the aggregate net cash proceeds and the Fair Market Value of marketable
securities received by OI Group since the Issue Date as a contribution to its
common equity capital or from the issue or sale of Equity Interests of OI Group
(other than Disqualified Stock) or from the issue or sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable debt securities
of OI Group that have been converted into or exchanged for such Equity
Interests (other than Equity Interests (or Disqualified Stock or debt
securities) sold to a Subsidiary of OI Group); plus


 


(c)                                  to
the extent that any Restricted Investment that was made after the Issue Date is
sold or otherwise liquidated, the cash plus the Fair Market Value of any marketable
securities received upon the sale or liquidation of such Restricted Investment
(less the cost of disposition, if any); plus


 


(d)                                 $15.0
million.


 


51

















 


So long as
(solely with respect to clauses (2), (3), (5) and (7) below) no Event
of Default has occurred and is continuing or would be caused thereby, the
preceding provisions shall not prohibit:


 


(1)                                  the
payment of any dividend within 60 days after the date of declaration thereof,
if at said date of declaration such payment would have complied with the
provisions of this Indenture;


 


(2)                                  the
redemption, repurchase, retirement, defeasance or other acquisition of any
Indebtedness of OI Group or any Restricted Subsidiary of OI Group or of any
Equity Interests of OI Group in exchange for, or out of the net cash proceeds
of the substantially concurrent sale (other than to a Subsidiary of OI Group)
of, Equity Interests of OI Group (other than Disqualified Stock); provided that the amount of any such net
cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause (3)(b) of
the preceding paragraph;


 


(3)                                  the
defeasance, redemption, repurchase or other acquisition of the OI Inc. Senior Notes;


 


(4)                                  the
defeasance, redemption, repurchase or other acquisition of subordinated
Indebtedness of OI Group (other than the OI Inc. Senior Notes) or any
Restricted Subsidiary of OI Group with the net cash proceeds from an incurrence
of Permitted Refinancing Indebtedness;


 


(5)                                  the
repurchase, redemption or other acquisition or retirement (or dividends or
distributions to OI Inc. or payments of Intercompany Indebtedness, in each
case, to finance such repurchase, retirement or other acquisition) for value of
any Equity Interests of OI Inc., OI Group or any Restricted Subsidiary of OI
Group held by any member of OI Inc.’s, OI Group’s or any Restricted Subsidiary
of OI Group’s management; provided
that the aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests shall not exceed $5.0 million in any twelve-month
period;


 


(6)                                  any
OI Inc. Ordinary Course Payment; and


 


(7)                                  dividends
or distributions to OI Inc. or payments of Intercompany Indebtedness to allow
OI Inc. to pay cash dividends on any shares of preferred stock of OI Inc.
issued after the Issue Date in an amount not to exceed $25.0 million in any
twelve month-period.


 


The amount of
all Restricted Payments (other than cash) shall be the Fair Market Value on the
date of the Restricted Payment of the asset(s) or securities proposed to
be transferred or issued to or by OI Group or such Restricted Subsidiary, as
the case may be, pursuant to the Restricted Payment. The Fair Market Value of
any assets or securities that are required to be valued by this Section 4.12
shall be determined in good faith by OI Group.


 


52

















 


Section 4.13.                         Incurrence of Indebtedness and
Issuance of Preferred Stock.


 


OI Group shall
not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable, contingently or otherwise, (collectively, “incur”) with respect to any Indebtedness
(including Acquired Debt), and OI Group shall not issue any Disqualified Stock
and OI Group shall not permit any of its Restricted Subsidiaries to issue any
Disqualified Stock or preferred stock; provided,
however, that OI Group and any of its Restricted Subsidiaries may incur
Indebtedness (including Acquired Debt) and may issue Disqualified Stock or
preferred stock, if the Fixed Charge Coverage Ratio for OI Group’s most
recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock or preferred
stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred, or the
Disqualified Stock or preferred stock had been issued, as the case may be, at
the beginning of such four-quarter period.


 


The first
paragraph of this Section 4.13 shall not prohibit the incurrence of any of
the following items of Indebtedness (collectively, “Permitted Debt”):


 


(1)                                  the
incurrence by OI Group or its Restricted Subsidiaries of Indebtedness under
Credit Facilities (and the incurrence of Guarantees thereof) in an aggregate principal
amount at any one time outstanding (with letters of credit being deemed to have
a principal amount equal to the maximum potential liability of the Company and
its Restricted Subsidiaries thereunder) not to exceed $4.5 billion (of which
not more than $2.75 billion of such Indebtedness shall be incurred by
Restricted Subsidiaries (for the avoidance of doubt, other than the Company)
that are not Guarantors);


 


(2)                                  the
incurrence by OI Group and any Restricted Subsidiary of OI Group of the
Existing Indebtedness;


 


(3)                                  the
incurrence by OI Group, the Company and the Guarantors of Indebtedness
represented by the Notes and the related Guarantees to be issued on the Issue
Date and the Exchange Securities and the related Guarantees to be issued
pursuant to the Registration Rights Agreement;


 


(4)                                  the
incurrence by OI Group or any of its Restricted Subsidiaries of Indebtedness
represented by Capital Lease Obligations, in an aggregate principal amount at
any time outstanding, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any Indebtedness incurred pursuant to this
clause (4), not to exceed 3.0% of Tangible Assets;


 


(5)                                  the
incurrence by OI Group or any of its Restricted Subsidiaries of Indebtedness
incurred to finance all or any part of the purchase price or


 


53

















 


cost of construction or
improvement of property, plant or equipment used in the business of OI Group or
such Restricted Subsidiary, in an aggregate principal amount at any time
outstanding, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any Indebtedness incurred pursuant to this clause
(5), not to exceed 5.0% of Tangible Assets, as measured after giving effect to
such transaction;


 


(6)                                  provided that so long as no Default shall
have occurred or be continuing or would be caused thereby, the incurrence by OI
Group or any of its Restricted Subsidiaries of Indebtedness in exchange for, or
the proceeds of which are or shall be used to refund, refinance or replace the
OI Inc. Senior Notes;


 


(7)                                  the
incurrence by OI Group or any of its Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are or
shall be used to refund, refinance or replace Indebtedness (other than
Intercompany Indebtedness) that was permitted to be incurred under the first
paragraph of this Section 4.13 or clauses (2), (3), (6) or (7) of
this paragraph;


 


(8)                                  the
incurrence by OI Group or any of its Restricted Subsidiaries of Intercompany
Indebtedness between or among OI Group and any of its Restricted Subsidiaries
and with respect to OI Group only, between OI Group and OI Inc.; provided, however, that:


 


(a)                                  if
OI Group, the Company or any Guarantor is the obligor on such Indebtedness,
such Indebtedness must be expressly subordinated to the prior payment in full
in cash of all Obligations with respect to the Notes, in the case of the
Company, or the Guarantees of the Notes, in the case of OI Group or a
Guarantor;


 


(b)                                 any
incurrence by OI Group of Intercompany Indebtedness to OI Inc. after the Issue
Date shall be in exchange for cash loans or advances from OI Inc. in the
ordinary course of business consistent with past practices; and


 


(c)                                  (i) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than OI Group or a Restricted
Subsidiary thereof and (ii) any sale or other transfer of any such
Indebtedness to a Person that is not either OI Group or a Restricted Subsidiary
thereof, shall be deemed, in each case, to constitute an incurrence of such
Indebtedness by OI Group or such Restricted Subsidiary, as the case may be,
that was not permitted by this clause (8);


 


(9)                                  the
incurrence by OI Group or any of its Restricted Subsidiaries of Hedging
Obligations;


 


54

















 


(10)                            provided that so long as no Default shall
have occurred or be continuing or would be caused thereby, the incurrence by
any Foreign Subsidiary of OI Group of Indebtedness in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding, not to
exceed $300.0 million, in addition to the $2.75 billion of Indebtedness that
may be incurred under clause (1) of this paragraph;


 


(11)                            (i) the
Guarantee by the Company or any of the Guarantors of Indebtedness of OI Group
or any Restricted Subsidiary of OI Group and (ii) the Guarantee by any
Foreign Subsidiary of Indebtedness of OI Group or any Restricted Subsidiary of
OI Group, in each case, that was permitted to be incurred by another provision
of this Section 4.13;


 


(12)                            the
accrual of interest, the accretion or amortization of original issue discount,
the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms and the payment of dividends on Disqualified
Stock in the form of additional shares of the same class of Disqualified Stock
shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.13
or an issuance of Disqualified Stock; provided,
in each such case, that the amount thereof is included in Fixed Charges of OI
Group as accrued;


 


(13)                            the
incurrence by OI Group or any of its Restricted Subsidiaries of additional
Indebtedness in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (13), not to exceed $300.0 million;


 


(14)                            Indebtedness
arising from agreements of OI Group or a Restricted Subsidiary of OI Group
providing for indemnification, adjustment of purchase price or similar
obligations, in each case, incurred or assumed in connection with the
disposition of any business, assets or a Subsidiary, other than Guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or a Subsidiary for the purpose of financing such acquisition;
provided, however, that (i) such
Indebtedness is not reflected on the balance sheet of OI Group or any such
Restricted Subsidiary of OI Group (contingent obligations referred to in a
footnote to financial statements and not otherwise reflected on the balance
sheet shall not be deemed to be reflected on such balance sheet for purposes of
this clause (i)) and (ii) the maximum assumable liability in respect of
all such Indebtedness that is permitted to be incurred pursuant to this clause
(14) shall at no time exceed the gross proceeds including noncash proceeds (the
Fair Market Value of such noncash proceeds being measured at the time received
and without giving effect to any subsequent changes in value) actually received
by OI Group and its Restricted Subsidiaries in connection with such
disposition;


 


55
















 


(15)                           the incurrence
by OI Group or any of its Restricted Subsidiaries of Indebtedness incurred or
deemed incurred or cash consideration received from the sale of accounts
receivable by OI Group or any of its Restricted Subsidiaries or a special
purpose vehicle established by any of them to purchase and sell such
receivables;


 


(16)                           obligations in
respect of performance and surety bonds and completion guarantees provided by
OI Group or any of its Restricted Subsidiaries in the ordinary course of
business;


 


(17)                           Indebtedness
incurred by OI Group or any of its Restricted Subsidiaries constituting
reimbursement obligations with respect to letters of credit issued in the
ordinary course of business, including without limitation letters of credit in
respect of workers’ compensation claims, or other Indebtedness with respect to
reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing
of such letters of credit or the incurrence of such Indebtedness, such obligations
are reimbursed within 30 days following such drawing or incurrence; and


 


(18)                           the incurrence
by OI Group or any of its Restricted Subsidiaries of Acquired Debt, in an
aggregate principal amount at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (18), not to exceed 5.0% of
Tangible Assets, as measured after giving effect to the transaction for which
the Acquired Debt was incurred.


 


The Company shall not incur
any Indebtedness (including Permitted Debt) after the Issue Date that is
contractually subordinated in right of payment to any other Indebtedness of the
Company unless such Indebtedness is also contractually subordinated in right of
payment to the Notes on substantially similar terms; provided, however, that no Indebtedness of the Company shall
be deemed to be contractually subordinated in right of payment to any other
Indebtedness of the Company solely by virtue of being unsecured.


 


OI Group shall not, and
shall not permit any Guarantor to, incur any Indebtedness (including Permitted
Debt) after the date of this Indenture that is contractually subordinated in
right of payment to any other Indebtedness of OI Group or the Guarantors, as the
case may be, unless such Indebtedness is also contractually subordinated in
right of payment to the obligations under the Notes or Guarantees of the Notes
on substantially similar terms; provided,
however, that no Indebtedness of OI Group or the Guarantors shall be
deemed to be contractually subordinated in right of payment to any other
Indebtedness of OI Group or the Guarantors solely by virtue of being unsecured.


 


For purposes of determining
compliance with this Section 4.13, in the event that any proposed
Indebtedness meets the criteria of more than one of the categories of Permitted
Debt described in clauses (1) through (18) above, or is entitled to be
incurred pursuant to the first paragraph of this Section 4.13, the Company
shall be permitted to classify such item of 


 


56

















 


Indebtedness
on the date of its incurrence in any manner that complies with this Section 4.13,
or later reclassify all or a portion of such item of Indebtedness.  Indebtedness under Credit Facilities
outstanding on the Issue Date on which Notes are first issued and authenticated
under this Indenture shall be deemed to have been incurred on such date in
reliance on the exception provided by clauses (1) or (2) of the
definition of Permitted Debt above.


 


Section 4.14.                         Liens.


 


Neither OI Group nor any
Restricted Subsidiary of OI Group shall create, incur, or permit to exist, any
Lien on any of their respective assets, whether now owned or hereafter
acquired, in order to secure any Indebtedness of either of OI Group or any
Restricted Subsidiary of OI Group, without effectively providing that the Notes
shall be equally and ratably secured until such time as such Indebtedness is no
longer secured by such Lien, except:


 


(1)                                 Liens on cash
and Cash Equivalents securing obligations in respect of letters of credit in
accordance with the terms of the Credit Agreement;


 


(2)                                 Liens existing
on the Issue Date;


 


(3)                                 Liens granted
after the Issue Date on any assets of OI Group or any of its Restricted Subsidiaries
securing Indebtedness of OI Group or any of its Restricted Subsidiaries created
in favor of the Holders of the Notes;


 


(4)                                 Liens securing
Indebtedness of OI Group or any Restricted Subsidiary of OI Group which is
incurred to extend, renew or refinance Indebtedness which is secured by Liens
permitted to be incurred under this Indenture; provided
that such Liens do not extend to or cover any assets of OI Group or any
Restricted Subsidiary of OI Group other than the assets securing the
Indebtedness being extended, renewed or refinanced and that the principal or
commitment amount of such Indebtedness does not exceed the principal or
commitment amount of the Indebtedness being extended, renewed or refinanced at
the time of such extension, renewal or refinancing, or at the time the Lien was
issued, created or assumed or otherwise permitted;


 


(5)                                 Permitted
Liens; and


 


(6)                                 Liens created
in substitution of or as replacements for any Liens permitted by the preceding
clauses (1) through (5) or this clause (6), provided that, based on a good faith
determination of an officer of the Company, the assets encumbered under any
such substitute or replacement Lien is substantially similar in value to the
assets encumbered by the otherwise permitted Lien which is being replaced.


 


So long as the Credit
Agreement is in effect, if the Notes are secured pursuant to the first sentence
of this Section 4.14, the Notes shall be considered equally and ratably
secured if they are secured pursuant to terms and provisions, including any
collateral or other exclusions or exceptions described therein, no less
favorable to the holders of Notes than those set forth in, or contemplated by,
the Credit Agreement with respect to any Specified New Senior Debt.


 


57

















 


Section 4.15.                         Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.


 


OI Group shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
create or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any such Restricted Subsidiary to:


 


(1)                                  pay dividends
or make any other distributions on its Capital Stock to OI Group or any of its
Restricted Subsidiaries, or with respect to any other interest or participation
in, or measured by, its profits, or pay any indebtedness owed to OI Group or
any of its Restricted Subsidiaries;


 


(2)                                  make loans or
advances to OI Group or any of its Restricted Subsidiaries; or


 


(3)                                  transfer any of
its properties or assets to OI Group or any of its Restricted Subsidiaries.


 


However, the preceding
restrictions shall not apply to encumbrances or restrictions existing under or
by reason of:


 


(1)                                 agreements governing Existing Indebtedness, Credit
Facilities, charter documents and shareholder agreements as in effect on the
Issue Date, and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are no more restrictive, taken as a whole, with
respect to such dividend and other payment restrictions than those contained in
such Existing Indebtedness, Credit Facilities, charter documents and
shareholders agreements as in effect on the Issue Date;


 


(2)                                 this Indenture, the Notes, the Collateral Documents, the
Offshore Collateral Documents and the Guarantees of the Notes;


 


(3)                                 applicable law;


 


(4)                                 any instrument governing Indebtedness or Capital Stock of a
Person acquired by OI Group or any of its Restricted Subsidiaries as in effect
at the time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties
or assets of any Person, other than the Person, or the property or assets of
the Person, so acquired, provided
that, in the case of Indebtedness, such Indebtedness was permitted by the terms
of this Indenture to be incurred;


 


(5)                                 customary non-assignment provisions in leases entered into
in the ordinary course of business and consistent with past practices;


 


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(6)                                 purchase money obligations, including Capital Lease
Obligations and obligations under mortgages, for property acquired in the
ordinary course of business that impose restrictions on the property so
acquired of the nature described in clause (3) of the first paragraph of this
Section 4.15;


 


(7)                                 any agreement for the sale or other disposition of a
Restricted Subsidiary of OI Group that restricts any of the foregoing by that
Restricted Subsidiary pending its sale or other disposition;


 


(8)                                 Permitted Refinancing Indebtedness, provided that the restrictions contained
in the agreements governing such Permitted Refinancing Indebtedness are no more
restrictive, taken as a whole, than those contained in the agreements governing
the Indebtedness being refinanced; and


 


(9)                                 Permitted Liens or Investment Grade Permitted Liens securing
Indebtedness that limit the right of the debtor to dispose of the assets
subject to such Lien.


 


Nothing contained in this Section 4.15
shall prevent OI Group or a Restricted Subsidiary of OI Group from entering
into any agreement (x) permitting or providing for the incurrence of Liens
otherwise permitted by Section 4.14 or (y) restricting the sale or
other disposition of property securing Indebtedness.


 


Section 4.16.                         Transactions with Affiliates.


 


OI Group shall not, and
shall not permit any of its Restricted Subsidiaries to, make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each, an “Affiliate Transaction”) involving
aggregate payments in consideration in excess of $5.0 million, unless:


 


(1)                                 such Affiliate
Transaction is on terms that are no less favorable to OI Group or the relevant
Restricted Subsidiary than those that would have been obtained in a comparable
transaction by OI Group or such Restricted Subsidiary with an unrelated Person;
and


 


(2)                                 OI Group delivers
to the Trustee with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $5.0
million, a resolution of the Board of Directors set forth in an Officers’
Certificate certifying that such Affiliate Transaction complies with this Section 4.16
and that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors.


 


The following items shall
not be deemed to be Affiliate Transactions and, therefore, shall not be subject
to the provisions of the prior paragraph:


 


59

















 


(1)                                 transactions between or among OI Group and/or its Restricted
Subsidiaries;


 


(2)                                 transactions between OI Group and/or its Restricted
Subsidiaries on the one hand, and OI Inc. on the other, that are in the
ordinary course of business consistent with past practices;


 


(3)                                 payment of reasonable directors’ fees;


 


(4)                                 Restricted Payments that are permitted by Section 4.12;


 


(5)                                 the payment of reasonable and customary fees paid to, and
indemnity provided on behalf of, officers, directors, employees or consultants
of OI Group, any of its direct or indirect parent corporations or any
Restricted Subsidiary of OI Group;


 


(6)                                 transactions in which OI Group or any of its Restricted
Subsidiaries, as the case may be, delivers to the Trustee a letter from an
investment banking firm of nationally recognized standing stating that such
transaction is fair to OI Group or such Restricted Subsidiary from a financial
point of view or meets the requirements of clause (1) of the preceding
paragraph;


 


(7)                                 in addition to any payments referred to in (5) above,
payments or loans to officers, directors and employees of OI Group, any of its
direct or indirect parent corporations or any Restricted Subsidiary of OI Group
for business or personal purposes and other loans and advances, in accordance
with any policy of OI Group which shall have been approved by the Board of
Directors of OI Group in good faith from time to time, to such officers,
directors and employees for travel, entertainment, moving and other relocation
expenses made in the ordinary course of business of OI Group, any of its direct
or indirect parent corporations or any Restricted Subsidiary of OI Group;


 


(8)                                 any agreement in effect as of the Issue Date or any
amendment thereto (so long as such amendment is not disadvantageous to the
Holders in any material respect) or any transaction contemplated thereby;


 


(9)                                 transactions with customers, clients, suppliers or
purchasers or sellers of goods or services, in each case in the ordinary course
of business which are fair to OI Group or its Restricted Subsidiaries, in the
reasonable determination of the Board of Directors of OI Group or the senior management
thereof; and


 


(10)                           transactions involving the sale of accounts receivables by
OI Group or any of its Restricted Subsidiaries or a special purpose vehicle
established by any of them to purchase and sell receivables.


 


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Section 4.17.                         Payments for Consent.


 


OI Group shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
pay or cause to be paid any consideration to or for the benefit of any Holder
of Notes for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of this Indenture, the Notes or the Guarantees unless
such consideration is offered to be paid and is paid to all Holders of the
Notes that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.


 


Section 4.18.                         Designation of Restricted and Unrestricted Subsidiaries.


 


The Board of Directors of OI
Group may designate any Restricted Subsidiary to be an Unrestricted Subsidiary
if that designation would not cause a Default; provided
that in no event shall the business currently operated by the
Company be transferred to or held by an Unrestricted Subsidiary. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the
aggregate Fair Market Value of all outstanding Investments owned by OI Group
and its Restricted Subsidiaries in the Subsidiary so designated shall be deemed
to be a Restricted Investment made as of the time of such designation and that
designation shall only be permitted if such Investment would be permitted at
that time and if such Restricted Subsidiary otherwise meets the definition of
an Unrestricted Subsidiary. The Board of Directors of OI Group may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be
deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of OI
Group of any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (1) such Indebtedness is permitted
pursuant to Section 4.13, calculated on a pro
forma basis as if such designation had occurred at the beginning of
the four-quarter reference period; and (2) no Default or Event of Default
shall be in existence following such designation.


 


Section 4.19.                         Limitations on Issuances of Guarantees of Indebtedness.


 


OI Group shall not permit
any of its Domestic Subsidiaries, directly or indirectly, to guarantee the
payment of any other Indebtedness of the Company or OI Group unless such
Domestic Subsidiary simultaneously executes and delivers a supplemental
indenture providing for the guarantee of the payment of the Notes by such
Domestic Subsidiary, which Guarantee shall be senior to or pari passu with such Subsidiary’s
Guarantee of such other Indebtedness.


 


ARTICLE 5.


 


SUCCESSORS


 


Section 5.01.                         When OI Group May Merge, Etc.


 


OI Group shall not, in any
transaction or series of transactions, merge or consolidate with or into, or,
directly or indirectly, sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of its properties and assets to, any Person
or Persons, and OI Group shall not permit any of its Restricted Subsidiaries to
enter into any such transaction or series of transactions if such transaction
or series of transactions, in the aggregate, would 


 


61

















 


result
in a sale, assignment, conveyance, transfer, lease or other disposition of all
or substantially all of the properties and assets of OI Group and its
Restricted Subsidiaries, on a consolidated basis, to any other Person or
Persons, unless at the time and after giving effect thereto:


 


(1)                                  either: (a) OI
Group or such Restricted Subsidiary, as the case may be, is the surviving
corporation; or (b) the Person formed by or surviving any such
consolidation or merger (if other than OI Group or such Restricted Subsidiary)
(the “Successor Company”) or to
which such sale, assignment, transfer, conveyance or other disposition shall
have been made is a corporation organized or existing under the laws of the
United States, any state thereof or the District of Columbia;


 


(2)                                  the Successor
Company (if other than OI Group or such Restricted Subsidiary) or the Person to
which such sale, assignment, transfer, conveyance or other disposition shall
have been made assumes all the obligations of OI Group or such Restricted
Subsidiary (if such Restricted Subsidiary is a Guarantor), as the case may be,
under the Notes, this Indenture and the Registration Rights Agreement pursuant
to agreements reasonably satisfactory to the Trustee;


 


(3)                                  immediately
after such transaction no Default or Event of Default exists; and


 


(4)                                  OI Group or the
Successor Company formed by or surviving any such consolidation or merger (if
other than OI Group), or the Person to which such sale, assignment, transfer,
conveyance or other disposition shall have been made, shall have, immediately
after such transaction, a Fixed Charge Coverage Ratio equal to or greater than
such ratio for OI Group immediately prior to such transaction.


 


This Section 5.01 shall
not apply to (i) a merger or consolidation of OI Group, the Company or any
of the Guarantors with or into any other of the Company, OI Group or any of the
Guarantors or the sale, assignment, conveyance, transfer, lease or other
disposition of assets between or among the Company, OI Group and any of the
Guarantors and (ii) a merger or consolidation of any Foreign Subsidiary
with or into OI Group or any of its Restricted Subsidiaries or the sale,
assignment, conveyance, transfer, lease or other disposition of assets from any
Foreign Subsidiary to OI Group or any of its Restricted Subsidiaries.


 


Section 5.02.                         Successor Corporation Substituted.


 


Upon any consolidation or
merger, or any transfer by OI Group or its Restricted Subsidiaries (other than
by lease) of all or substantially all of the assets of OI Group in accordance
with Section 5.01, the Successor Company or the Person to which such
transfer is made shall succeed to, and be substituted for, and may exercise
every right and power of the Company and OI Group under this Indenture with the
same effect as if such Successor Company or Person had been named as the
Company and OI Group herein.  In the
event of any such transfer, the Company and OI Group shall be released and
discharged from all liabilities and 


 


62

















 


obligations
in respect of the Notes and this Indenture, and Company and OI Group may be
dissolved, wound up or liquidated at any time thereafter.


 


Section 5.03.                         Assignment of Obligations.


 


On and after May 12,
2010, the Company may assign its obligations under the Notes and this Indenture
to OI Inc., and the Company and each Guarantor, in its capacity as a Guarantor,
would thereafter be released from its obligations under the Notes, the
Guarantees of the Notes and this Indenture, provided
that (1) OI Inc. assumes all of the obligations under the Notes and this
Indenture and (2) the obligations of each Credit Agreement Domestic
Borrower under the Credit Agreement have been or will be concurrently assumed
by OI Inc.  In the event of any such
assignment, OI Inc. shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under the Indenture with the same effect
as if OI Inc. had been named the Company herein, and restrictions imposed on
and obligations of OI Group in this Indenture shall become restrictions imposed
on and obligations of OI Inc., unless the context otherwise requires.


 


ARTICLE 6.


 


DEFAULTS AND REMEDIES


 


Section 6.01.                         Events of Default.


 


An “Event of Default” occurs with respect to
the Notes if:


 


(1)                                  the Company
defaults in the payment of interest on, or Additional Interest, if any, with
respect to, the Notes when the same becomes due and payable and the default
continues for a period of 30 days;


 


(2)                                  the Company
defaults in the payment of the Principal of the Notes when the same becomes due
and payable at maturity, upon redemption or otherwise;


 


(3)                                  failure by OI
Group or any of its Restricted Subsidiaries for 60 days after notice to comply
with any of the other agreements (other than those specified in clause (9) below)
in this Indenture, the Notes and the Guarantees of the Notes (with respect to
any Guarantor);


 


(4)                                  default under
any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness for money borrowed by
OI Group or any Restricted Subsidiary (or the payment of which is guaranteed by
OI Group or any of its Restricted Subsidiaries) whether such Indebtedness or
Guarantee now exists, or is created after the Issue Date, if that default:


 


(a)                                  is caused by a
failure to pay principal of, or interest or premium, if any, on such
Indebtedness prior to the expiration of the grace 


 


63

















 


period provided in such Indebtedness on the
date of such default (a “Payment Default”);
or


 


(b)                                 results in the
acceleration of such Indebtedness prior to its express maturity; provided, that an Event of Default shall
not be deemed to occur with respect to any such accelerated Indebtedness which
is repaid or prepaid within 20 Business Days after such declaration;


 


and, in any individual case, the principal
amount of any such Indebtedness is equal to or in excess of $50.0 million, or
such Indebtedness together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $100.0 million or more;


 


(5)                                  any final
judgment or order for payment of money in excess of $50.0 million in any
individual case and $100.0 million in the aggregate at any time shall be
rendered against OI Group or any of its Restricted Subsidiaries and such judgment
shall not have been paid, discharged or stayed for a period of 60 days;


 


(6)                                  except as
permitted by this Indenture, any Guarantee of the Notes shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect or any Guarantor, or any Person acting on
behalf of any Guarantor, shall deny or disaffirm its obligations under its
Guarantee of the Notes;


 


(7)                                  the Company, OI
Group or any Significant Subsidiary of OI Group pursuant to or within the
meaning of any Bankruptcy Law:


 


(a)                                  commences a
voluntary case;


 


(b)                                 consents to the
entry of an order for relief against it in an involuntary case;


 


(c)                                  consents to the
appointment of a Custodian of it or for all or substantially all of its
property;


 


(d)                                 makes a general
assignment for the benefit of its creditors; or


 


(e)                                  admits in
writing its inability generally to pay its debts as the same become due;


 


(8)                                  a court of
competent jurisdiction enters an order or decree under any Bankruptcy Law that:


 


(a)                                  is for relief
against the Company, OI Group or any Significant Subsidiary of OI Group in an
involuntary case;


 


64

















 


(b)                                 appoints a
Custodian of the Company, OI Group or any Significant Subsidiary of OI Group or
for all or substantially all of such entity’s property; or


 


(c)                                  orders the
liquidation of the Company, OI Group or any Significant Subsidiary of OI Group;


 


and the order or decree remains unstayed and
in effect for 60 days; and


 


(9)                                  failure by OI
Group or any of its Restricted Subsidiaries to comply with the provisions of
Sections 4.10 or 4.11 or Article 5.


 


The term “Bankruptcy Law”
means Title 11, U.S. Code or any similar federal or state law for the relief of
debtors.  The term “Custodian” means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.


 


Pursuant to Section 4.04,
forthwith upon becoming aware of any Default or Event of Default, the Company
shall deliver to the Trustee an Officers’ Certificate specifying such Default
or Event of Default and what action the Company is taking or proposes to take
with respect thereto.


 


Section 6.02.                         Acceleration.


 


If an Event of Default other
than an Event of Default specified in clauses (7) and (8) of Section 6.01,
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of at least 25% in principal amount of the then outstanding Notes by notice to
the Company and the Trustee, may declare the unpaid Principal of and any
accrued and unpaid interest on all the Notes to be due and payable
immediately.  Upon such declaration the
Principal (or such lesser amount) and interest shall be due and payable
immediately.  If an Event of Default
specified in clause (7) or (8) of Section 6.01 occurs, all
outstanding Notes shall become and be due and payable immediately without any
declaration, act or notice.  The Holders
of a majority in principal amount of the then outstanding Notes by notice to
the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default Notes have been cured or waived
except nonpayment of Principal (or such lesser amount) or interest that has
become due solely because of the acceleration.


 


Section 6.03.                         Other Remedies.


 


If an Event of Default with
respect to the Notes occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of Principal or interest on the Notes
or to enforce the performance of any provision of the Notes or this Indenture.


 


The Trustee may maintain a
proceeding even if it does not possess any of the Notes or does not produce any
of them in the proceeding.  A delay or
omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default.  All remedies are cumulative to the extent permitted
by law.


 


65
















 


Section 6.04.                         Waiver of Past Defaults.


 


Subject to Section 9.02,
the Holders of a majority in principal amount of the then outstanding Notes, by
notice to the Trustee, may waive an existing Default or Event of Default and
its consequences under this Indenture except a continuing Default or Event of
Default in the payment of interest or Additional Interest on, or the Principal
of any Note (provided, however, that the
Holders of a majority in principal amount of the outstanding Notes may rescind
an acceleration and its consequences, including any related payment default
that resulted from such acceleration).


 


Section 6.05.                         Control by Majority.


 


The Holders of a majority in
principal amount of the then outstanding Notes may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it. 
However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture, that is unduly prejudicial to the rights of another
Holder of Notes, or that may involve the Trustee in personal liability.  The Trustee may take any other action which
it deems proper that is not inconsistent with any such direction.


 


Section 6.06.                         Limitation on Suits.


 


A Holder of Notes may not
pursue a remedy with respect to this Indenture, the Notes or any Guarantee of
Notes, if any, unless:


 


(a)           the Holder gives to the Trustee written notice of a
continuing Event of Default;


 


(b)           the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;


 


(c)           such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;


 


(d)           the Trustee does not comply with the request within 30 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and


 


(e)           during such 30-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.


 


The
Trustee may withhold from Holders notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
Principal or interest or Additional Interest) if it determines that withholding
notice is in the interest of such Holders.


 


No Holder of any Notes may
use this Indenture to prejudice the rights of another Holder of Notes or to
obtain a preference or priority over another Holder of Notes.


 


66

















 


Section 6.07.                         Rights of Holders to Receive Payment.


 


Notwithstanding any other
provision of this Indenture, the right of any Holder of a Note to receive
payment of Principal of and interest, if any, on the Note, on or after the
respective due dates expressed in the Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder; provided that a Holder shall not have the
right to institute any such suit for the enforcement of payment if and to the
extent that the institution or prosecution thereof or the entry of judgment
therein would, under applicable law, result in the surrender, impairment,
waiver or loss of the Lien of this Indenture upon any property subject to such
Lien.


 


Section 6.08.                         Collection Suit by Trustee.


 


If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing
with respect to Notes, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
Principal (or such portion of the Principal as may be specified as due upon
acceleration at that time) and interest, if any, remaining unpaid on the Notes
then outstanding, together with (to the extent lawful) interest on overdue
Principal and interest, and such further amount as shall be sufficient to cover
the costs and, to the extent lawful, expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and any other amounts due the Trustee under Section 7.07.


 


Section 6.09.                         Trustee May File Proofs of Claim.


 


The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Holders allowed in any
judicial proceedings relative to the Company (or any other obligor on the
Notes), its creditors or its property and shall be entitled to and empowered to
collect and receive any money or other property payable or deliverable on any
such claims and to distribute the same, and any custodian in any such judicial
proceedings is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel, and any other amounts due the Trustee under Section 7.07.
Nothing contained herein shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.


 


Section 6.10.                         Priorities.


 


If the Trustee collects any
money with respect to Notes pursuant to this Article, it shall pay out the
money in the following order:


 


First:                                             to the Trustee,
its agents and attorneys for amounts due under Section 7.07, including
payment of all compensation, expense and liabilities 


 


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incurred, and all advances
made, by the Trustee and the costs and expenses of collection;


 


Second:                             to Holders for
amounts due and unpaid on the Notes for Principal and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for Principal and interest, respectively; and


 


Third:                                        to the Company
or to such party as a court of competent jurisdiction shall direct.  Until so applied, such payments shall be held
in a separate account, in trust, by the Trustee or invested by the Trustee at
the written direction of the Company.  At
such time as no Notes remain outstanding, any excess money held by the Trustee
shall be paid to the Company.


 


The Trustee may fix a record
date and payment date for any payment to Holders of Notes pursuant to this
Section.  The Trustee shall notify the
Company in writing reasonably in advance of any such record date and payment
date.


 


Section 6.11.                         Undertaking for Costs.


 


In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as a Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defense made by the party litigant. This Section does not
apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07
or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.


 


ARTICLE 7.


 


TRUSTEE


 


Section 7.01.                         Duties of Trustee.


 


(a)           If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.


 


(b)           Except during the continuance of an Event of Default known
to the Trustee:


 


(i)                                     the duties of
the Trustee shall be determined solely by the express provisions of this
Indenture or the TIA and the Trustee need perform only those duties that are
specifically set forth in this Indenture or the TIA and 


 


68

















 


no others, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and


 


(ii)                                  in the absence
of bad faith on its part, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture.  However,
the Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein).


 


(c)           The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:


 


(i)                                     this paragraph
does not limit the effect of paragraph (b) of this Section;


 


(ii)                                  the Trustee
shall not be liable for any error of judgment made in good faith by a
Responsible Officer of the Trustee, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and


 


(iii)                               the Trustee
shall not be liable with respect to any action it takes or omits to take in
good faith in accordance with a direction received by it pursuant to Section 6.05.


 


(d)           Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject
to paragraphs (a), (b) and (c) of this Section.


 


(e)           No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability.  The Trustee may refuse to perform any duty or
exercise any right or power unless it receives security and indemnity
satisfactory to it against any loss, liability or expense.


 


(f)            The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the
Company.  Absent written instruction from
the Company, the Trustee shall not be required to invest any such money.  Money held in trust by the Trustee need not
be segregated from other funds except to the extent required by law.


 


Section 7.02.                         Rights of Trustee.


 


Subject to TIA Section 315(a) through
(d):


 


(a)           The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person.  The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such 


 


69

















 


further
inquiry or investigation into such facts or matters as it may see fit but shall
not be obligated to do so.


 


(b)           Before the Trustee acts or refrains from acting, it may
require an Officers’ Certificate or an Opinion of Counsel, or both.  The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officers’
Certificate or Opinion of Counsel.


 


(c)           The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.


 


(d)           The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers under this Indenture, unless the Trustee’s conduct constitutes
negligence.


 


(e)           Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient
if signed by an Officer of the Company.


 


(f)            The Trustee may consult with counsel of its selection and
may rely upon the advice of such counsel or any Opinion of Counsel.


 


(g)           The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Trust Officer of the Trustee has actual
knowledge thereof or unless written notice of any event that is in fact such a
default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Notes and this Indenture.


 


(h)           Except with respect to Sections 4.03 and 4.04, the Trustee
shall have no duty to inquire as to the performance of the Company with respect
to the covenants contained in Article 4.


 


(i)            Delivery of reports, information and documents to the
Trustee under Article 4 (other than the delivery of Officers’ Certificates
pursuant to Section 4.04) is for informational purposes only and the Trustee’s
receipt of the foregoing shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company’s compliance with any of their covenants
hereunder (as to which the Trustee is entitled to rely conclusively on Officers’
Certificates).


 


(j)            The Trustee shall not be responsible or liable for special,
indirect, or consequential loss or damage of any kind whatsoever (including,
but not limited to, loss or profit) irrespective of whether the Trustee has
been advised of the likelihood of such loss or damage and regardless of the
form of action.


 


(k)           The permissive rights of the Trustee to do things enumerated
in this Indenture shall not be construed as duties.


 


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Section 7.03.                         Individual Rights of Trustee.


 


The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or an Affiliate with the same rights it
would have if it were not Trustee.  Any
Agent may do the same with like rights. 
However, the Trustee is subject to TIA Sections 310(b) and 311.


 


Section 7.04.                         Trustee’s Disclaimer.


 


The Trustee makes no
representation as to the validity or adequacy of this Indenture or the Notes,
it shall not be accountable for the Company’s use of the proceeds from the
Notes, and it shall not be responsible for any statement in the Notes other
than its certificate of authentication.


 


Section 7.05.                         Notice of Defaults.


 


If a Default or Event of
Default with respect to the Notes occurs and is continuing and if it is known
to the Trustee, the Trustee shall mail to all Holders of Notes a notice of the
Default or Event of Default within 60 days after it occurs.  Except in the case of a Default or Event of
Default in payment on any such Note, the Trustee may withhold the notice if and
so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of such Holders.


 


Section 7.06.                         Reports by Trustee to Holders.


 


Within 60 days after May 15
in each year, the Trustee shall mail to Holders of Notes as provided in TIA Section 313(c) a
brief report dated as of such May 15 that complies with TIA Section 313(a) (if
such report is required by TIA Section 313(a)).  The Trustee shall also comply with TIA Section 313(b).


 


A copy of each report at the
time of its mailing to Holders shall be mailed to the Company and filed with
the Commission and each stock exchange on which any of the Notes are listed, as
required by TIA Section 313(d).  The
Company shall notify the Trustee when the Notes are listed on any stock
exchange.


 


Section 7.07.                         Compensation and Indemnity.


 


The Company shall pay to the
Trustee from time to time such compensation as shall be agreed upon in writing
for its services hereunder.  The Company
shall reimburse the Trustee upon written request for all reasonable
out-of-pocket expenses incurred by it. 
Such expenses shall include the reasonable compensation and
out-of-pocket expenses of the Trustee’s agents and counsel.


 


The Company shall indemnify
each of the Trustee and its directors, officers, agents and employees or any
predecessor Trustee for any loss, liability, damage, claims or expenses,
including taxes (other than taxes based upon, measured by or determined by the
income of the Trustee) incurred by it, without negligence or bad faith on its
part, in connection with its appointment or the administration of this
Indenture and its duties hereunder. The Trustee 


 


71

















 


shall
notify the Company promptly of any claim for which it may seek indemnity.  The Company shall defend the claim and the
Trustee shall cooperate in the defense. 
The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. 
The Company need not pay for any settlement made without its consent.


 


To secure the Company’s
payment obligations in this Section, the Trustee shall have a lien prior to the
Notes on all money or property held or collected by the Trustee in its capacity
as Trustee, except money or property held in trust to pay Principal and
interest on the Notes.  Such lien shall
survive the satisfaction and discharge of this Indenture.


 


If the Trustee incurs
expenses or renders services after an Event of Default specified in Section 6.01(7) or
(8) occurs, the expenses and the compensation for the services shall be
intended to constitute expenses of administration under any applicable
Bankruptcy Law.


 


This Section 7.07 shall
survive the termination of this Indenture and the resignation or removal of the
Trustee.


 


Section 7.08.                         Replacement of Trustee.


 


A resignation or removal of
the Trustee with respect to the Notes and appointment of a successor Trustee
shall become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section.


 


The Trustee may resign with
respect to the Notes by 30 days’ notice to the Company in writing.  The Holders of a majority in principal amount
of the then outstanding Notes may remove the Trustee by so notifying the
Trustee in writing and may appoint a successor Trustee with the Company’s
consent.  The Company may remove the
Trustee if:


 


(1)                                  the Trustee fails to comply
with Section 7.10;


 


(2)                                  the Trustee is adjudged a
bankrupt or an insolvent;


 


(3)                                  a receiver or other public
officer takes charge of the Trustee or its property; or


 


(4)                                  the Trustee becomes
incapable of acting.


 


If the Trustee resigns or is
removed or if a vacancy exists in the office of Trustee for any reason, the
Company shall promptly appoint a successor Trustee.  Within one year after the successor Trustee
takes office, the Holders of a majority in principal amount of the then
outstanding Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.  If a
successor Trustee does not take office within 60 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of at least 10% in principal amount of the then outstanding Notes may petition
any court of competent jurisdiction for the appointment of a successor Trustee.


 


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If the Trustee fails to
comply with Section 7.10, any Holder of Notes who satisfies the
requirements of TIA Section 310(b) may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.


 


A successor Trustee shall
deliver a written acceptance of its appointment to the retiring Trustee and to
the Company.  Immediately after that, the
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee (subject to the lien provided for in Section 7.07),
the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture.  The
successor Trustee shall mail a notice of its succession to the Holders of
Notes.


 


Notwithstanding replacement
of the Trustee pursuant to this Section 7.08, the Company’s obligations
under Section 7.07 shall continue for the benefit of the retiring trustee.


 


Section 7.09.                         Successor Trustee by Merger, Etc.


 


If the Trustee consolidates,
merges or converts into, or transfers all or substantially all of its corporate
trust business to, another corporation, the successor corporation without any
further act shall be the successor Trustee; provided
that such corporation shall be eligible under this Article 7 and TIA Section 310(a).


 


Section 7.10.                         Eligibility; Disqualification.


 


The Notes shall always have
a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and
(5).  The Trustee shall always have a
combined capital and surplus of at least $25,000,000 as set forth in its most
recent published annual report of condition. 
The Trustee is subject to TIA Section 310(b).


 


Section 7.11.                         Preferential Collection of Claims Against Company.


 


The Trustee is subject to
TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b).  A Trustee who has resigned or been removed
shall be subject to TIA Section 311(a) to the extent indicated
therein.  If the Trustee acquires any
conflicting interest as defined in the TIA it shall eliminate such conflict
within 90 days, apply to the Commission for permission to continue or resign.


 


ARTICLE 8.


 


SATISFACTION AND
DISCHARGE; DEFEASANCE


 


Section 8.01.                         Satisfaction and Discharge of Indenture.


 


The provisions of this
Indenture shall upon Company Order cease to be of further effect (except as to
any surviving rights of registration of transfer or exchange of Notes herein
expressly provided for), and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes; when


 


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(a)           either:


 


(i)                                    all Notes that
have been authenticated and delivered (except lost, stolen or destroyed Notes
that have been replaced or paid and Notes for whose payment money has
theretofore been deposited in trust and thereafter repaid to the Company) have
been delivered to the Trustee for cancellation; or


 


(ii)                                 all Notes that
have not been delivered to the Trustee for cancellation have become due and
payable by reason of the making of a notice of redemption or otherwise or will
become due and payable within one year and the Company or any Guarantor has
irrevocably deposited or caused to be deposited with the Trustee as trust funds
in trust solely for the benefit of the Holders of the Notes, cash in U.S.
dollars, non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient without consideration of any reinvestment of
interest, to pay and discharge the entire indebtedness on the Notes not delivered
to the Trustee for cancellation for Principal, premium and Additional Interest,
if any, and accrued interest to the date of Maturity or redemption;


 


(b)           no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company or any
Guarantor is a party or by which the Company or any Guarantor is bound;


 


(c)           the Company or any Guarantor has paid or caused to be paid
all sums payable by it under this Indenture relating to the Notes;


 


(d)           the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the payment of
the Notes at Maturity; and


 


(e)           the Company has delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.


 


Notwithstanding the
satisfaction and discharge of this Indenture, the obligations of the Company to
the Trustee under Section 7.07, and, if money shall have been deposited
with the Trustee pursuant to clause (a)(ii) of this Section or if
money or obligations shall have been deposited with or received by the Trustee
pursuant to Section 8.03 or 8.04, the obligations of the Trustee under
Sections 8.02 and 8.05 shall survive.


 


Section 8.02.                         Application of Trust Funds; Indemnification.


 


(a)           Subject
to the provisions of Section 8.05, all money deposited with the Trustee
pursuant to Section 8.01, all money and Government Securities deposited
with the Trustee pursuant to Section 8.03 or 8.04 and all money received
by the Trustee in respect of Government Securities deposited with the Trustee
pursuant to Section 8.03 or 8.04, shall be held 


 


74

















 


in
trust and applied by it, in accordance with the provisions of the Notes and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the persons entitled thereto, of the Principal and interest for
whose payment such money has been deposited with or received by the Trustee or
to make mandatory sinking fund payments or analogous payments as contemplated
by Sections 8.03 and 8.04.


 


(b)           The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against Government Securities deposited pursuant
to Sections 8.03 or 8.04 or the interest and principal received in respect of
such obligations other than any payable by or on behalf of Holders.


 


(c)           The
Trustee shall deliver or pay to the Company from time to time upon Company
Order any Government Securities or money held by it as provided in Sections
8.03 or 8.04 that, in the opinion of a nationally recognized firm of
independent certified public accountants expressed in a written certification
thereof delivered to the Trustee, are then in excess of the amount thereof
which then would have been required to be deposited for the purpose for which
such Government Securities or money were deposited or received.  This provision shall not authorize the sale
by the Trustee of any Government Securities held under this Indenture.


 


Section 8.03.                         Legal Defeasance of Notes.


 


The Company shall be deemed
to have paid and discharged the entire indebtedness on all the outstanding
Notes on the 91st day after the date of the deposit referred to in subparagraph
(d) hereof, the provisions of this Indenture, as it relates to such
outstanding Notes, shall no longer be in effect and any Guarantees of such
Notes shall terminate (and the Trustee, at the expense of the Company, shall,
upon Company Order, execute proper instruments acknowledging the same), except
as to:


 


(a)           the rights of Holders of outstanding Notes to receive, from
the trust funds described in subparagraph (1) of the proviso hereto,
payment of the Principal of or interest and Additional Interest, if any, on the
outstanding Notes at Maturity thereof in accordance with the terms of this
Indenture and the Notes;


 


(b)           the Company’s obligations under Sections 2.03, 2.06, 2.07,
2.09 and 4.02;


 


(c)           the rights, powers, trust and immunities of the Trustee
hereunder and the duties of the Trustee under Section 8.02 and the duty of
the Trustee to authenticate Notes issued on registration of transfer of
exchange and the Company’s and the Guarantors’ obligations in connection
therewith; and


 


(d)           the provisions of this Section 8.03;


 


provided that, the following
conditions shall have been satisfied:


 


(a) the Company shall
have deposited or caused to be deposited irrevocably with the Trustee as trust
funds in trust for the benefit of the Holders of the Notes, cash in U.S.
Dollars,


 


75
















 


non-callable Government Securities or a
combination thereof in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge
the Principal of and interest and premium and Additional Interest, if any, on
all outstanding Notes on the Stated Maturity or on the applicable redemption
date, as the case may be, and the Company must specify whether the Notes are
being defeased to Stated Maturity or to a particular redemption date;


 


(1)   the Company shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee confirming that (a) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling, or (b) since the
Issue Date, there has been a change in the applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of Counsel
shall confirm that, the Holders of the outstanding Notes shall not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit, defeasance and discharge and shall be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge under this Section 8.03
had not occurred;


 


(2)   no Default or Event of
Default shall have occurred and be continuing either: (a) on the date of
such deposit (other than a Default or Event of Default resulting from the
borrowing of funds to be applied to such deposit); or (b) insofar as
Events of Default from bankruptcy or insolvency events are concerned, at any
time in the period ending on the 91st day after the date of deposit;


 


(3)   such defeasance pursuant to
this Section 8.03 shall not result in a breach or violation of, or
constitute a default under any material agreement or instrument to which
OI Group or the Company or any of their Restricted Subsidiaries are a
party or by which OI Group or the Company or any of such Restricted
Subsidiaries are bound;


 


(4)   the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that, assuming no
intervening bankruptcy of the Company or any Guarantor between the date of
deposit and the 91st day following the deposit and assuming that no Holder is
an “insider” of the Company under applicable bankruptcy law, after the 91st day
following the deposit, the trust funds shall not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally;


 


(5)   the Company shall have
delivered to the Trustee an Officers’ Certificate stating that the deposit was
not made by the Company with the intent of preferring the Holders of the Notes
over the other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others; and


 


(6)   the Company shall have
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that all conditions precedent provided for relating to the
defeasance contemplated by this Section 8.03 have been complied with.


 


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Section 8.04.                         Covenant Defeasance.


 


On and after the 91st day
after the date of the deposit referred to in subparagraph (a) hereof, the
Company may omit to comply with any term, provision or condition set forth
under Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.09, 4.10, 4.11, 4.12, 4.13,
4.14, 4.15, 4.16, 4.17, 4.18, 4.19 and 5.01 (and the failure to comply with any
such provisions shall not constitute a Default or Event of Default under Section 6.01),
with respect to the Notes, and the events specified in Sections 6.01(4), 6.01(5) (only
with respect to Restricted Subsidiaries other than the Company) shall no longer
constitute an Event of Default, provided
that the following conditions shall have been satisfied:


 


(1)   the Company shall have
deposited or caused to be deposited irrevocably with the Trustee as trust funds
in trust for the benefit of the Holders of the Notes, cash in U.S. Dollars,
non-callable Government Securities or a combination thereof in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge the Principal of and interest
and Additional Interest, if any, on all outstanding Notes on the Stated
Maturity or on the applicable redemption date, as the case may be, and the
Company must specify whether the Notes are being defeased to Stated Maturity or
to a particular redemption date;


 


(2)   the Company shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee confirming that Holders of the outstanding Notes shall not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit and defeasance and shall be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such deposit and defeasance under this Section 8.04 had not occurred;


 


(3)   no Default or Event of
Default shall have occurred and be continuing either: (a) on the date of
such deposit (other than a Default or Event of Default resulting from the
borrowing of funds to be applied to such deposit); or (b) or insofar as
Events of Default from bankruptcy or insolvency events are concerned, at any
time in the period ending on the 91st day after the date of deposit;


 


(4)   such defeasance pursuant to
this Section 8.04 shall not result in a breach or violation of, or
constitute a default under any material agreement or instrument to which
OI Group or the Company or any of their Restricted Subsidiaries are a
party or by which OI Group or the Company or any of such Restricted
Subsidiaries are bound;


 


(5)   the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that, assuming no
intervening bankruptcy of the Company or any Guarantor between the date of
deposit and the 91st day following the deposit and assuming that no Holder is
an “insider” of the Company under applicable bankruptcy law, after the 91st day
following the deposit, the trust funds shall not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally;


 


77

















 


(6)   the Company shall have
delivered to the Trustee an Officers’ Certificate stating that the deposit was
not made by the Company with the intent of preferring the Holders of the Notes
over the other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others; and


 


(7)   the Company shall have
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that all conditions precedent herein provided for relating to the
defeasance contemplated by this Section 8.04 have been complied with.


 


Section 8.05.                         Repayment to Company.


 


The Trustee and the Paying
Agent shall pay to the Company upon the Company’s request any money held by
them for the payment of Principal or interest that remains unclaimed for two
years after the date upon which such payment shall have become due.  After payment to the Company, Holders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another Person.


 


ARTICLE 9.


 


SUPPLEMENTS,
AMENDMENTS AND WAIVERS


 


Section 9.01.                         Without Consent of Holders.


 


The Company, the Guarantors
and the Trustee may supplement or amend this Indenture, the Notes or the
Guarantees of the Notes without notice to or the consent of any Holder:


 


(1)                                  to cure any
ambiguity, defect or inconsistency;


 


(2)                                  to provide for
uncertificated Notes in addition to or in place of certificated Notes;


 


(3)                                  to comply with Article 5;


 


(4)                                  to provide for
the assumption of the Company’s obligations to the Holders of Notes by OI Inc.
in accordance with Section 5.03;


 


(5)                                  to provide for
assumption of the Company’s or any Guarantor’s obligations to Holders of Notes
in the case of a merger or consolidation or sale of all or substantially all of
the Company’s or such Guarantor’s assets;


 


(6)                                  to make any
change that would provide any additional rights or benefits to the Holders of
Notes or that does not adversely affect the legal rights under this Indenture
or the Guarantees of any such Holder (including, but not limited to, adding a
Guarantor under this Indenture);


 


(7)                                  to comply with
any requirements of the Commission in connection with the qualification
of this Indenture under the TIA; or


 


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(8)                                  to conform the
text of the Notes, the Guarantees or the Indenture to any provision of the “Description
of notes” section of the Offering Memorandum to the extent that such provision
in such “Description of notes” section was intended to be a verbatim recitation
of a provision of the Notes, the Guarantees or the Indenture.


 


Section 9.02.                         With Consent of Holders.


 


Subject to Section 6.07,
the Company, the Guarantors and the Trustee may amend or supplement this
Indenture, the Notes or the Guarantees of the Notes with the consent of the
Holders of a majority in principal amount of the then outstanding Notes
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes) and the Holders of a majority
in principal amount of the then outstanding Notes may also waive any existing
Default or compliance with any provision of this Indenture, the Notes or the
Guarantees of the Notes (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes); provided, however, that without the consent of each Holder affected,
an amendment or waiver may not (with respect to any Notes held by a
non-consenting Holder):


 


(1)                                  reduce the percentage of the
principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver;


 


(2)                                  reduce the principal of or
change the Stated Maturity of any Note or alter the provisions, or waive any
payment, with respect to the redemption of any Notes;


 


(3)                                  reduce the rate of or change
the time for payment of interest on any Note;


 


(4)                                  waive a Default or Event of
Default in the payment of Principal of, or interest or premium or Additional
Interest, if any, on any Note (except a rescission of acceleration of such Note
by the Holders of at least a majority in aggregate principal amount of the
Notes and a waiver of the payment default that resulted from such
acceleration);


 


(5)                                  make any Note payable in
money other U.S. dollars (including defaulted interest);


 


(6)                                  make any change in the
provisions of this Indenture relating to waivers of past Defaults or the rights
of Holders of Notes to receive payments of Principal of or interest or premium
or Additional Interest, if any, on the Notes;


 


(7)           release any Guarantor from
any of its obligations under its Guarantee or this Indenture, except in
accordance with the terms of the Guarantee or this Indenture;


 


(8)           impair the right to
institute suit for the enforcement of any payment on or with respect to the
Notes or the Guarantees of the Notes;


 


(9)           amend or modify any of the
provisions of this Indenture or any Guarantee of the Notes in a manner material
and adverse to the Holders of the Notes except (a) in accordance with the
terms of this Indenture or such Guarantee or (b) as permitted by Section 9.01;


 


79

















 


(10)         make any change to this Section 9.02;


 


(11)         amend, change or modify the
obligation of the Company to make and consummate an Asset Sale Offer with
respect to any Asset Sale in accordance with Section 4.11 or the
obligation of the Company to make and consummate a Change of Control Offer in
the event of a Change of Control in accordance with Section 4.10,
including, in each case, amending, changing or modifying any definition
relating thereto; or


 


(12)         except as otherwise
permitted under Article 5 or Section 10.11, consent to the assignment
or transfer by OI Group, the Company or any Guarantor of any of their rights or
obligations under this Indenture.


 


It shall not be necessary
for the consent of the Holders under this Section 9.02 to approve the
particular form of any proposed amendment or waiver, but it shall be sufficient
if such consent approves the substance thereof.


 


After any amendment under
this Indenture becomes effective, the Company shall mail to the Holders a
notice briefly describing any such amendment. 
Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture or waiver.  The
Company shall mail supplemental indentures to Holders upon request.


 


Section 9.03.                         Revocation and Effect of Consents.


 


Until an amendment or waiver
becomes effective, a consent to it by a Holder of a Note is a continuing
consent by the Holder and every subsequent Holder of a Note or portion of a
Note that evidences the same debt as the consenting Holder’s Note, even if
notation of the consent is not made on any Note; provided,
however, that unless a record date shall have been established
pursuant to Section 2.12(a), any such Holder or subsequent Holder may
revoke the consent as to his Note or portion of a Note if the Trustee receives
the notice of revocation before the date on which the amendment or waiver
becomes effective.  An amendment or
waiver shall become effective on receipt by the Trustee of consents from the
Holders of the requisite percentage principal amount of the outstanding Notes,
and thereafter shall bind every Holder of Notes.


 


Section 9.04.                         Notation on or Exchange of Notes.


 


If an amendment or waiver
changes the terms of a Note: (a) the Trustee may require the Holder of the
Note to deliver it to the Trustee, the Trustee may, at the written direction of
the Company and at the Company’s expense, place an appropriate notation on the
Note about the changed terms and return it to the Holder and the Trustee may
place an appropriate notation on any Note thereafter authenticated; or (b) if
the Company or the Trustee so determines, the Company in exchange for the Note
shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms.


 


80

















 


Section 9.05.                         Trustee to Sign Amendments, Etc.


 


The Trustee shall receive an
Opinion of Counsel stating that the execution of any amendment or waiver
proposed pursuant to this Article is authorized or permitted by this
Indenture.  Subject to the preceding
sentence, the Trustee shall sign such amendment or waiver. The Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
that affects the Trustee’s own rights, duties, liabilities or immunities under
this Indenture.


 


ARTICLE 10.


 


GUARANTEE


 


Section 10.01.                  Guarantee.


 


Subject to the provisions of
this Article 10, the Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantee to each Holder and to the Trustee
and its successors and assigns (a) the due and punctual payment of
Principal of, interest on and premium on and Additional Interest, if any, with
respect to the Notes whether at Stated Maturity, by acceleration, by redemption
or otherwise, and all other monetary obligations of the Company under this
Indenture (including obligations to the Trustee) with respect to the Notes and (b) the
due and punctual performance within applicable grace periods of all other
obligations of the Company under this Indenture with respect to the Notes (all
the foregoing being hereinafter collectively called the “Obligations”).  The Guarantors further agree that the
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from the Guarantors, and that the Guarantors will remain bound
under this Article 10 notwithstanding any extension or renewal of any
Obligation.


 


The Guarantors waive
presentation to, demand of, payment from and protest to the Company of any of
the Obligations and also waive notice of protest for nonpayment.  The Guarantors waive notice of any default
under the Notes to which this Article 10 is applicable or the Obligations
with respect thereto.  The obligations of
the Guarantors under this Section 10.01 shall not be affected by (a) the
failure of any Holder or the Trustee to assert any claim or demand or to
enforce any right or remedy against the Company or any other Person under this
Indenture, the Notes or any other agreement or otherwise; (b) any
extension or renewal of any Obligation; (c) any rescission, waiver,
amendment, modification or supplement of any of the terms or provisions of this
Indenture (other than this Article 10), the Notes or any other agreement,
unless such rescission, waiver, amendment, modification or supplement expressly
affects the obligations of any Guarantor under this Section 10.01; (d) the
release of any security held by any Holder or the Trustee for the Obligations
or any of them; (e) the failure of any Holder or Trustee to exercise any
right or remedy against any other guarantor of the Obligations; or (f) any
change in the ownership of the Company.


 


The Guarantors further agree
that their Guarantees herein constitute a guarantee of payment, performance and
compliance when due (and not a guarantee of collection) and waive any right to
require that any resort be had by any Holder or the Trustee to any security
held for payment of the Obligations.


 


81

















 


Except as set forth in this
Indenture, the obligations of the Guarantors hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall
not be subject to any defense, setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of
the Obligations or otherwise.  Without
limiting the generality of the foregoing, except as set forth in this
Indenture, the obligations of the Guarantors herein shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Notes or any other agreement, by any waiver or modification of any thereof, by
any default, failure or delay, willful or otherwise, in the performance of the
Obligations with respect to the Notes, or by any other act or thing or omission
or delay to do any other act or thing which may or might in any manner or to
any extent vary the risk of the Guarantors or would otherwise operate as a
discharge of the Guarantors as a matter of law or equity.


 


The Guarantors further agree
that their Guarantees herein shall continue to be effective or be reinstated,
as the case may be, if at any time payment, or any part thereof, of any
Obligation with respect to the Notes is rescinded or must otherwise be restored
by any Holder or the Trustee upon the bankruptcy or reorganization of the
Company or otherwise, unless such Guarantee has been released in accordance
with Section 10.10.


 


In furtherance of the
foregoing and not in limitation of any other right which any Holder or the
Trustee has or may have at law or in equity against the Guarantors by virtue
hereof, upon the failure of the Company to pay any Obligation with respect to
the Notes when and as the same shall become due, whether at Stated Maturity, by
acceleration, by redemption or otherwise, or to perform or comply with any
other Obligation with respect to the Notes, the Guarantors hereby promise to and
will, upon receipt of written demand by the Trustee, forthwith pay, or cause to
be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i) the
unpaid Principal amount of such Obligations, (ii) accrued and unpaid
interest on such Obligations (but only to the extent not prohibited by law) and
(iii) all other monetary Obligations of the Company to the Holders of the
Notes and the Trustee.


 


The Guarantors agree that,
as between the Guarantors, on the one hand, and the Holders and the Trustee, on
the other hand, (x) the maturity of the Obligations guaranteed hereby may
be accelerated as provided in Article 6 for the purposes of the Guarantee
herein, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the Obligations guaranteed hereby, and (y) in
the event of any declaration of acceleration of such Obligations as provided in
Article 6, such Obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purposes of this
Section.


 


The Guarantors also agree to
pay any and all costs and expenses (including reasonable attorneys’ fees and
expenses) incurred by the Trustee or any Holder in enforcing any rights under
this Section.


 


Section 10.02.                  Limitation on Liability.


 


Any term or provision of
this Indenture to the contrary notwithstanding, the obligations of each
Guarantor are limited to the maximum amount as will result in the 


 


82

















 


Obligations
of such Guarantor under the Guarantee not constituting a fraudulent conveyance
or fraudulent transfer under federal or state law.


 


Section 10.03.                  Execution and Delivery of Guarantee.


 


To evidence its Guarantee
set forth in Section 10.01, each Guarantor hereby agrees that a notation
of such Guarantee substantially in the form included in Exhibit C shall be
endorsed by an Officer of such Guarantor on each Note authenticated and
delivered by the Trustee to which this Article 10 is applicable and that
this Indenture shall be executed on behalf of such Guarantor by its President,
any Executive or Senior Vice President, Treasurer, Assistant Treasurer or one
of its Vice Presidents.  Further, the
Company shall cause all future Guarantors to execute a supplemental indenture.


 


Each Guarantor hereby agrees
that its Guarantee set forth in Section 10.01 shall remain in full force
and effect notwithstanding any failure to endorse on each Note to which this Article 10
is applicable a notation of such Guarantee.


 


If an Officer whose
signature is on this Indenture or on the Guarantee no longer holds that office
at the time the Trustee authenticates the Note on which a Guarantee is
endorsed, the Guarantee shall be valid nevertheless.


 


The delivery of any Note to
which this Article 10 is applicable by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Guarantee set forth in this Indenture on behalf of the Guarantors.


 


Section 10.04.                  Successors
and Assigns.


 


This Article 10 shall
inure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Notes shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions of this
Indenture.


 


Section 10.05.                  No Waiver.


 


Neither
a failure nor a delay on the part of either the Trustee or the Holders in
exercising any right, power or privilege under this Article 10 shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise of any right, power or privilege.  The rights, remedies and benefits of the
Trustee and the Holders herein expressly specified are cumulative and not
exclusive of any other rights, remedies or benefits which either may have under
this Article 10 at law, in equity, by statute or otherwise.


 


Section 10.06.                  Right of Contribution.


 


Each
Guarantor hereby agrees that to the extent that a Guarantor shall have paid
more than its proportionate share of any payment made hereunder, such Guarantor
shall be entitled to seek and receive contribution from and against any other
Guarantor hereunder who has not paid its proportionate share of such
payment.  Each Guarantor’s right of
contribution 


 


83

















 


shall be subject to the
terms and conditions of Section 10.07. 
The provisions of this Section shall in no respect limit the
obligations and liabilities of any Guarantor to the Trustee and the Holders and
each Guarantor shall remain liable to the Trustee and the Holders for the full
amount guaranteed by such Guarantor hereunder.


 


Section 10.07.                  No Subrogation.


 


Notwithstanding
any payment or payments made by any of the Guarantors hereunder, no Guarantor
shall be entitled to be subrogated to any of the rights of the Trustee or any
Holder against the Company or any other Guarantor or any collateral security or
guarantee or right of offset held by the Trustee or any Holder for the payment
of the Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the Company or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing
to the Trustee and the Holders by the Company on account of the Obligations are
paid in full.  If any amount shall be
paid to any Guarantor on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full, such amount shall be
held by such Guarantor in trust for the Trustee and the Holders, segregated
from other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Trustee in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Trustee, if required), to be
applied against the Obligations.


 


Section 10.08.                  Additional Guarantors; Reinstatement of Guarantees.


 


Until
such time as all Guarantees by the Guarantors under this Indenture shall have
been released in accordance with Section 10.10, OI Group shall cause each
Domestic Subsidiary of OI Group or any of its Restricted Subsidiaries that
guarantees the Company’s Indebtedness under the Credit Agreement, including the
reinstatement or renewal of a Guarantee of Indebtedness under the Credit
Agreement previously released under the Credit Agreement, to execute and
deliver a supplement to this Indenture providing that such Domestic Subsidiary
will be a Guarantor hereunder and deliver an Opinion of Counsel to the Trustee
within 10 Business Days of the date on which it executes a Guarantee under the
Credit Agreement; provided  that all Subsidiaries that have properly been
designated as Unrestricted Subsidiaries in accordance with this Indenture (i) shall
not be required to execute or maintain a Guarantee and (ii) shall be
released from all Obligations under any Guarantee, in each case for so long as
they continue to constitute Unrestricted Subsidiaries.  Domestic Subsidiaries that are Guarantors on
the date any such supplement is executed by an additional Domestic Subsidiary
shall not be required to become parties to such supplement and hereby agree to
the execution and delivery by any additional Domestic Subsidiary of any such
supplement.


 


Section 10.09.                  Modification.


 


No
modification, amendment or waiver of any provision of this Article 10, nor
the consent to any departure by the Guarantors therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Trustee, and
then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given; it being understood that the release of
the Guarantees of Guarantors pursuant to Section 10.10 shall not be an
amendment or waiver of any provision of this Article 10 and shall not
require any action on the 


 


84

















 


part of the Trustee.  No notice to or demand on the Guarantors in
any case shall entitle the Guarantors to any other or further notice or demand
in the same, similar or other circumstances.


 


Section 10.10.                  Release of Guarantor.


 


(a)           A Guarantor shall be automatically released without any
action on the part of the Trustee of the Holders from its obligations under this
Indenture and Guarantee if:


 


(1)                                  OI Group
properly designates any Restricted Subsidiary that is a Guarantor as an
Unrestricted Subsidiary;


 


(2)                                  upon any sale
or other disposition of all or substantially all of the assets of that
Guarantor (including by way of merger or consolidation) to a Person that is not
(either before or after giving effect to such transaction) a Restricted
Subsidiary of OI Group, if the sale or other disposition of all or
substantially all of the assets of that Guarantor complies with Section 4.11
and Section 10.11; or


 


(3)                                  upon any sale
of all of the Capital Stock of a Guarantor to a Person that is not (either
before or after giving effect to such transaction) a Restricted Subsidiary of
OI Group, if the sale of all such Capital Stock of that Guarantor complies with
Section 4.11 and Section 10.11.


 


The Trustee shall receive
written notice of the release of any Guarantor if such release is effected
other than under Section 10.11.


 


(b)           Upon the release of a
Guarantee by a Domestic Subsidiary under the Credit Agreement,
the Guarantee of such Domestic Subsidiary under this Indenture will be released
and discharged at such time and the Trustee shall execute an
appropriate instrument evidencing such release. 
If any such Domestic Subsidiary thereafter guarantees obligations under
the Credit Agreement (or any released Guarantee under the Credit Agreement is
reinstated or renewed), then such Domestic Subsidiary will guarantee the Notes
in accordance with this Article 10.


 


(c)           A Guarantor shall be
released from its obligations under this Indenture in accordance with an
assignment of obligations to OI Inc. pursuant to Section 5.03 or in
connection with the merger or consolidation of the Company or any of the
Guarantors with or into any other of the Company, OI Group or any of the
Guarantors or the sale, assignment, conveyance, transfer, lease or other
disposition of assets between or among the Company, OI Group and any of the
Guarantors, so long as such transaction complies with Section 4.11.


 


Section 10.11.                  Merger, Consolidation and Sale of Assets of a Guarantor.


 


A
Guarantor may not sell or otherwise dispose of all or substantially of its
assets to, or consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person), another Person, other than the Company or
another Guarantor, unless:


 


(1)                                  immediately
after giving effect to that transaction, no Event of Default shall have
occurred and be continuing; and


 


85
















 


(2)           either (a) the Person
acquiring the property in any such sale or disposition or the Person formed by
or surviving any such consolidation or merger is organized or existing under
the laws of the United States, any state thereof or the District of Columbia
and assumes all the obligations of that Guarantor under this Indenture, its
Guarantee and the Registration Rights Agreement pursuant to a supplemental
indenture satisfactory to the Trustee; or (b) such sale or other
disposition complies with Section 4.11, including the application of the
Net Proceeds therefrom; and


 


(3)           the Company shall have
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that such consolidation, sale, lease or merger complies with the
foregoing clauses (1) and (2).


 


Notwithstanding the
foregoing, each Guarantor may consolidate with or merge into or sell its assets
to the Company or another Guarantor.


 


ARTICLE 11.


 


MISCELLANEOUS


 


Section 11.01.      Indenture Subject to Trust Indenture Act.


 


This Indenture is subject to
the provisions of the TIA that are required to be part of this Indenture, and
shall, to the extent applicable, be governed by such provisions.


 


Section 11.02.      Notices.


 


Any notice or communication
is duly given if in writing and delivered in person or sent by first-class mail
(registered or certified, return receipt requested), telecopier or overnight
air courier guaranteeing next-day delivery, addressed as follows:


 


If
to the Company:


 


Owens-Brockway Glass
Container, Inc.

c/o Owens-Illinois Group, Inc. 

One O-I Plaza

One Michael Owens Way 

Perrysburg, OH 43551

Attention: Treasurer


 


Telephone: (567) 336-5000


Facsimile: (419) 247-7107


 


If
to the Trustee:


 


U.S. Bank National Association

Raymond S. Haverstock             

Corporate Trust Services         




86

















 


EP-MN-WS3C

60 Livingston Avenue

St. Paul MN 55107-1419


Telephone: (651) 495-3909


Facsimile: (651) 495-1221


 


The Company or the Trustee
by notice to the other may designate additional or different addresses for
subsequent notices or communications.


 


All notices and
communications (other than those sent to Holders) shall be deemed to have been
duly given:  at the time delivered by
hand, if personally delivered; five Business Days after being deposited in the
mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and
the next Business Day after timely delivery to the courier, if sent by
overnight air courier guaranteeing next-day delivery.


 


Any notice or communication to
a Holder shall be mailed by first-class mail to his address shown on the
register kept by the Registrar. Failure to mail a notice or communication to a
Holder or any defect in it shall not affect its sufficiency with respect to
other Holders.  If the Company mails a
notice or communication to Holders, it shall mail a copy to the Trustee at the
same time.


 


If a notice or communication
is mailed in the manner provided above within the time prescribed, it is duly
given, whether or not the addressee receives it.


 


Section 11.03.      Communication by Holders with Other Holders.


 


Holders may communicate
pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Notes. The Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA Section 312(c).


 


Section 11.04.      Certificate and Opinion as to Conditions Precedent.


 


Upon any request or
application by the Company to the Trustee to take any action under this
Indenture, the Company shall furnish to the Trustee:


 


(a)           an Officers’ Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and


 


(b)           an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.


 


Section 11.05.      Statements Required in Certificate or Opinion.


 


Each certificate or opinion
with respect to compliance with a condition or covenant provided for in this Indenture
(other than the certificate provided for in Section 4.04) shall include:


 


87

















 


(1)           a statement that the Person making such certificate
or opinion has read such covenant or condition;


 


(2)           a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;


 


(3)           a statement that, in the opinion of such Person, he
or she has made such examination or investigation as is necessary to enable him
or her to express an informed opinion as to whether or not such covenant or
condition has been complied with; and


 


(4)           a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been complied with; provided, however, that with respect to
matters of fact an Opinion of Counsel may rely on an officer’s certificate or
certificates of public officials.


 


Section 11.06.      Rules by Trustee and Agents.


 


The Trustee as to Notes may
make reasonable rules for action by or at a meeting of Holders of
Notes.  The Registrar and any Paying
Agent or Authenticating Agent may make reasonable rules and set reasonable
requirements for their functions.


 


Section 11.07.      Legal Holidays.


 


A “Legal Holiday” is a Saturday, a Sunday or a day on which
banking institutions in New York City, New York or Toledo, Ohio, are not
required to be open. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.


 


Section 11.08.      No Recourse Against Others.


 


A past, present or future
director, officer, employee, incorporator or stockholder, as such, of the
Company or any Guarantor, if any, or any successor corporation shall not have
any liability for any obligations of the Company or any Guarantor, if any,
under the Notes, this Indenture or the Guarantees of the Notes, if any, or for
any claim based on, in respect of, or by reason of such obligations or their
creation.  Each Holder by accepting a
Note waives and releases all such liability. 
The waiver and release are part of the consideration of issuance of the
Notes.


 


Section 11.09.      Counterparts.


 


This Indenture may be
executed by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.


 


88

















 


Section 11.10.      Governing Law.


 


This Indenture and the Notes
shall be governed by and construed in accordance with the laws of the State of
New York.


 


Section 11.11.      Severability.


 


In case any provision in
this Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.


 


Section 11.12.      Effect of Headings, Table of Contents, Etc.


 


The Article and Section headings
herein and the table of contents are for convenience only and shall not affect
the construction hereof.


 


Section 11.13.      Successors and Assigns.


 


All covenants and agreements
of the Company in this Indenture and the Notes shall bind its successors and
assigns.  All agreements of the Trustee
in this Indenture shall bind its successor.


 


Section 11.14.      No Interpretation of Other Agreements.


 


This Indenture may not be
used to interpret another indenture, loan or debt agreement of the Company or
any Subsidiary.  Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.


 


[SIGNATURE PAGES FOLLOW]


 


89

















 


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


 


 


	
   

  	
  OWENS-BROCKWAY GLASS CONTAINER INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James W. Baehren

  
	
   

  	
   

  	
  Name: James W. Baehren

  
	
   

  	
   

  	
  Title:Senior Vice President &
  Secretary

  
	
   

  	
   

  
	
   

  	
  On behalf of each entity named on the
  attached Annex A, in the capacity set forth for such entity on such Annex
  A

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James W. Baehren

  
	
   

  	
   

  	
  Name: James W. Baehren

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S. BANK
  NATIONAL ASSOCIATION, as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard Prokosch

  
	
   

  	
   

  	
  Name: Richard Prokosch

  
	
   

  	
   

  	
  Title:  
  Vice President

  



 


[Indenture Signature Page]


 

















 


ANNEX A


 


	
  Name of Entity

  	
   

  	
  Title of Officer Executing on

  Behalf of Such Entity

  
	
   

  	
   

  	
   

  
	
  ACI America Holdings Inc.

  	
   

  	
  Vice President
  and Secretary

  
	
   

  	
   

  	
   

  
	
  Brockway
  Realty Corporation

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  NHW
  Auburn, LLC

  	
   

  	
  Senior Vice President and Secretary of its sole
  member

  
	
   

  	
   

  	
   

  
	
  OI
  Auburn Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OI
  Australia Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OI
  California Containers Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OI
  Castalia STS Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OI
  General Finance Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OI
  General FTS Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  O-I
  Holding LLC

  	
   

  	
  Vice President and Secretary of its sole member

  
	
   

  	
   

  	
   

  
	
  OI
  International Holdings Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OI
  Levis Park STS Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OI Puerto Rico STS Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OIB
  Produvisa Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  Owens-Brockway
  Packaging, Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  Owens-Illinois
  General Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  Owens-Illinois
  Group, Inc.

  	
   

  	
  Vice President, Director of Finance and Secretary

  
	
   

  	
   

  	
   

  
	
  SeaGate, Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  SeaGate
  II, Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  SeaGate
  III, Inc.

  	
   

  	
  Vice President and Secretary

  



 


A-1

















 


	
  Name of Entity

  	
   

  	
  Title of Officer Executing on

  Behalf of Such Entity

  
	
   

  	
   

  	
   

  
	
  Universal
  Materials, Inc.

  	
   

  	
  Vice President and Secretary

  



 


A-2

















 


EXHIBIT A

FORM OF CERTIFICATE OF TRANSFER


 


Owens-Brockway Glass Container, Inc.

c/o Owens-Illinois Group, Inc. 

One O-I Plaza

One Michael Owens Way 

Perrysburg, OH 43551


 


Attention: 
Treasurer


 


Re:  73/8% Senior Notes due 2016


 


(CUSIP/ISIN
                    )


 


Reference is hereby made to
the Indenture, dated as of May 12, 2009 (the “Indenture”), by and among Owens-Brockway Glass Container
Inc., as issuer (the “Company”),
the Guarantors and U.S. Bank National Association, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.


 


                              
(the “Transferor”) owns and
proposes to transfer the Note[s] or interest in such Note[s] specified in Annex
A hereto, in the principal amount of
$             in
such Note[s] or interests (the “Transfer”),
to
                    
(the “Transferee”), as further
specified in Annex A hereto. In connection with the Transfer, the Transferor
hereby certifies that:


 


[CHECK ALL THAT APPLY]


 


1.             o   Check if Transferee will take delivery of a
beneficial interest in a 144A Global Security or a Definitive Security pursuant
to Rule 144A. The Transfer is being effected pursuant to
and in accordance with Rule 144A under the United States Securities Act of
1933, as amended (the “Securities Act”),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Security is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Security for its own account, or for one or more
accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a “qualified institutional
buyer” within the meaning of Rule 144A in a transaction meeting, the
requirements of Rule 144A and such Transfer is in compliance with any
applicable blue sky securities laws of any state of the United States.  Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Security will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A Global Security
and/or the Definitive Security and in the Indenture and the Securities Act.


 


2.             o   Check if Transferee will take delivery of a
beneficial interest in a Regulation S Global Security or a Definitive Security
pursuant to Regulation S. The Transfer is being
effected pursuant to and in accordance with Rule 903 or Rule 904
under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated, the
Transferee was 


 


A-1

















 


outside the United States or
such Transferor and any Person acting on its behalf reasonably believed and
believes that the Transferee was outside the United States or (y) the
transaction was executed in, on or through the facilities of a designated offshore
securities market and neither such Transferor nor any Person acting on its
behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention
of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S under the Securities Act, (iii) the transaction is not part
of a plan or scheme to evade the registration requirements of the Securities
Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an initial
purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive
Security will be subject to the restrictions on Transfer enumerated in the
Private Placement Legend printed on the Regulation S Global Security and/or the
Definitive Security and in the Indenture and the Securities Act.


 


3.             o   Check and complete if Transferee will take delivery
of a beneficial interest in the Global Security or a Definitive Security
pursuant to any provision of the Securities Act other than Rule 144A or
Regulation S. The Transfer is being effected in compliance with
the transfer restrictions applicable to beneficial interests in Restricted
Global Securities and Restricted Definitive Securities and pursuant to and in
accordance with the Securities Act and any applicable blue sky securities laws
of any state of the United States, and accordingly the Transferor hereby
further certifies that (check one):


 


(a)           o   such
Transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act;


 


or


 


(b)           o   such
Transfer is being effected to the Company or a Subsidiary thereof;


 


or


 


(c)           o   such
Transfer is being effected pursuant to an effective registration statement
under the Securities Act and in compliance with the prospectus delivery
requirements of the Securities Act.


 


4.             o   Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Security or an Unrestricted Definitive Security.


 


(a)           o   Check if Transfer is pursuant to Rule 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Security will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Securities, on Restricted Definitive Securities and in
the Indenture.


 


A-2

















 


(b)           o   Check if Transfer is pursuant to Regulation S.
(i) The Transfer is being effected pursuant to and in accordance with Rule 903
or Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities
laws of any state of the United States and (ii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Security will no
longer be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Securities, on Restricted
Definitive Securities and in the Indenture.


 


(c)           o   Check if Transfer is pursuant to Other Exemption.  (i) The Transfer is being effected
pursuant to and in compliance with an exemption from the registration requirements
of the Securities Act other than Rule 144, Rule 903 or Rule 904
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any State of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities
Act. Upon consummation of the proposed Transfer in accordance with the terms of
the Indenture, the transferred beneficial interest or Definitive Security will
not be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Securities or Restricted
Definitive Securities and in the Indenture.


 


This certificate and the statements
contained herein are made for your benefit and the benefit of the Company.


 


 


	
   

  	
   

  
	
   

  	
  [Insert Name of Transferor]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
					



 


A-3
















 


ANNEX A TO CERTIFICATE OF
TRANSFER


 


1.             The Transferor owns and proposes to transfer the
following:


 


[CHECK ONE]


 


(a)           o   a
beneficial interest in the:


(i)            o   144A
Global Security (CUSIP/ISIN         ),
or


(ii)           o   Regulation
S Global Security (CUSIP/ISIN
        ), or


 


(b)           o   a
Restricted Definitive Security.


 


2.             After the Transfer the Transferee will hold:


 


[CHECK ONE]


 


(a)            ̈   a
beneficial interest in the:


(i)             ̈   144A
Global Security (CUSIP/ISIN
                ),
or


(ii)            ̈   Regulation
S Global Security (CUSIP/ISIN
                ),
or


(iii)           ̈   Unrestricted
Global Security (CUSIP/ISIN
              ),
or


 


(b)            ̈   a
Restricted Definitive Security; or


 


(c)            ̈   an
Unrestricted Definitive Security,


 


in accordance with the terms
of the Indenture.


 


A-4





















 


EXHIBIT B


 


FORM OF CERTIFICATE OF
EXCHANGE


 


Owens-Brockway Glass Container, Inc.

c/o Owens-Illinois Group, Inc. 

One O-I Plaza

One Michael Owens Way 

Perrysburg, OH 43551


 


Attention: 
Treasurer


 


Re:  73/8% Senior Notes due 2016


 


(CUSIP/ISIN
                    )


 


Reference is hereby made to
the Indenture, dated as of May 12, 2009 (the “Indenture”), by and among Owens-Brockway Glass Container
Inc., as issuer (the “Company”),
the Guarantors and U.S. Bank National Association, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.


 


                                    
(the “Owner”) owns and proposes
to exchange the Note[s] or interest in such Note[s] specified herein, in the
principal amount of
$                    
in such Note[s] or interests (the “Exchange”).
In connection with the Exchange, the Owner hereby certifies that:


 


1.             Exchange of
Restricted Definitive Securities or Beneficial Interests in a Restricted Global
Security for Unrestricted Definitive Securities or Beneficial Interests in an
Unrestricted Global Security


 


(a)           o   Check if Exchange is from beneficial interest in a
Restricted Global Security to beneficial interest in an Unrestricted Global
Security.  In connection
with the Exchange of the Owner’s beneficial interest in a Restricted Global
Security for a beneficial interest in an Unrestricted Global Security in an
equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner’s own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Securities and pursuant to and in accordance with the
United States Securities Act of 1933, as amended (the “Securities Act”), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Security is
being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.


 


(b)           o   Check If Exchange is from Restricted Definitive
Security to beneficial interest in an Unrestricted Global Security.  In connection with the Owner’s Exchange of a
Restricted Definitive Security for a beneficial interest in an Unrestricted
Global Security, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner’s own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Securities and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are 


 


B-1





















 


not required in order to
maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.


 


(c)           o   Check if Exchange is from Restricted Definitive
Security to Unrestricted Definitive Security.  In connection with the Owner’s Exchange of a
Restricted Definitive Security for an Unrestricted Definitive Security, the
Owner hereby certifies (i) the Unrestricted Definitive Security is being
acquired for the Owner’s own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Securities and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Unrestricted
Definitive Security is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.


 


2.             Exchange of
Restricted Definitive Securities for Restricted Definitive Securities or
Beneficial Interests in Restricted Global Securities


 


(a)           o   Check if Exchange is from Restricted Definitive
Security to beneficial interest in a Restricted Global Security.  In connection with the Exchange of the Owner’s
Restricted Definitive Security for a beneficial interest in the [CHECK ONE]
    144A Global Security,
       Regulation S Global Security with an equal
principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner’s own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Securities and pursuant to and in
accordance with the Securities Act, and in compliance with any applicable blue
sky securities laws of any state of the United States.  Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the beneficial interest issued will
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the relevant Restricted Global Security and in the Indenture
and the Securities Act.


 


This certificate and the
statements contained herein are made for your benefit and the benefit of the
Company.


 


 


	
   

  	
   

  
	
   

  	
  [Insert Name of Owner]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
					



 


B-2





















 


EXHIBIT C


 


FORM OF GUARANTEE


 


For value received, the
undersigned (including any successor Person under the Indenture) has, jointly
and severally, unconditionally guaranteed, to the extent set forth in the
Indenture and subject to the provisions in the Indenture dated as of May 12,
2009, as such Indenture may be supplemented or amended (the “Indenture”) by and among Owens-Brockway
Glass Container Inc. (the “Company”),
the Guarantors listed on the signature pages thereto and U.S. Bank
National Association, as Trustee (“Trustee”),
(a) the due and punctual payment of the Principal of and interest and
premium and Additional Interest, if any, on the Notes (as defined in the
Indenture), whether at Stated Maturity, by acceleration, redemption or
otherwise, the due and punctual payment of interest on overdue Principal and,
to the extent permitted by law, interest, and the due and punctual performance
of all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms of the Indenture and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise. The obligations of the undersigned to
the Holders of such Notes and to the Trustee pursuant to this Guarantee and the
Indenture are expressly set forth in Article 10 of the Indenture and
reference is hereby made to the Indenture for the precise terms of this
Guarantee.


 


The terms of the Indenture,
including, without limitation, Article 10 of the Indenture, are
incorporated herein by reference. Capitalized terms used herein shall have the
meanings assigned to them in the Indenture unless otherwise indicated.


 


	
   

  	
   

  
	
   

  	
  [Name of Guarantor]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


[Guarantee of 73/8%
Senior Notes due 2016


Rule 144A Note
CUSIP/ISIN:  69073TAM5/US69073TAM53

Regulation S Note CUSIP/ISIN: 
U68337AG6/USU68337AG63]




C-1





















 


EXHIBIT D-1


 


[FORM OF NOTE]


 


[Insert the Global Security Legend, if applicable pursuant to the
provisions of the Indenture]


 


[Insert the Private Placement Legend, if applicable pursuant to the
provisions of the Indenture]


 


[Insert the OID Legend, pursuant to the provisions of the Indenture]


 


[Insert, if applicable, the Regulation S Legend, pursuant to the
provisions of the Indenture]


 


OWENS-BROCKWAY GLASS CONTAINER INC.


 


73/8% SENIOR NOTES DUE 2016


 


	
  Number:

  	
   

  	
  CUSIP
  No.

  	
   

  	
  $

  



 


OWENS-BROCKWAY GLASS CONTAINER INC., a Delaware
corporation (the “Company”), for value received, hereby promises to pay to Cede &
Co., as nominee of The Depository Trust Company, or registered assigns, the
principal sum of
                                                                                                                                      
DOLLARS
($                  )
on May 15, 2016.


 


Interest Payment Dates:  February 1 and August 1, commencing
August 1, 2009.


 


Record Dates: 
January 15 and July 15.


 


Additional provisions of this Note are set forth
below following the signatures of the authorized officers of the Company.


 


D1-1





















 


IN WITNESS WHEREOF, the Company has caused this Note
to be signed manually or by facsimile by its duly authorized officers.


 


	
   

  	
  OWENS-BROCKWAY GLASS CONTAINER INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Dated:  May 12, 2009


 


TRUSTEE’S CERTIFICATE OF
AUTHENTICATION


 


This is one of the Notes
referred to in the within-mentioned Indenture.


 


U.S. BANK NATIONAL
ASSOCIATION, as Trustee


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  
	
   

  	
   

  



 


D1-2





















 


OWENS-BROCKWAY GLASS CONTAINER INC.


 


73/8% SENIOR NOTES DUE 2016


 


Capitalized terms used herein shall have the
meanings assigned to them in the Indenture referred to below unless otherwise
indicated.


 


1.             Interest


 


OWENS-BROCKWAY GLASS CONTAINER INC., a Delaware
corporation (such entity, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount
of this Note at the rate per annum shown above and shall pay the Additional
Interest, if any, payable pursuant to Section 5 of the Registration Rights
Agreement.  Interest on this Note shall
accrue from May 12, 2009 or from the most recent interest payment date to
which interest has been paid or provided for, as the case may be; interest and
Additional Interest, if any, on this Note shall be payable semi-annually on February 1
and August 1 of each year until maturity, or, if such day is not a
Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”), commencing on August 1,
2009; and interest on this Note shall be payable to holders of record on the January 15
or July 15 immediately preceding the applicable Interest Payment
Date.  Interest will be computed on the
basis of a 360-day year of twelve 30-day months.  The Company shall pay defaulted interest on
overdue interest, plus (to the extent lawful) any interest payable on the
defaulted interest, as provided in Section 2.11 of the Indenture.


 


2.             Method of Payment


 


The Company will pay interest and Additional
Interest, if any, on this Note (except defaulted interest) to the Persons who
are holders (“Holders”) of record
in the note register of the Company (the “Register”)
of this Note at the close of business on the January 15 or July 15
(each, a “Record Date”) next
preceding the Interest Payment Date, in each case even if the Note is cancelled
solely by virtue of registration of transfer or registration of exchange after
such Record Date.  The Company will pay
Principal, interest and Additional Interest, if any, in money of the United
States that at the time of payment is legal tender for payment of public and
private debts.  Principal of and interest
and Additional Interest, if any, on this Note will be payable, and this Note
may be exchanged or transferred, at the office or agency of the Company in the
Borough of Manhattan, the City of New York (which initially will be a Corporate
Trust Office of the Trustee); provided that,
at the option of the Company, payment of interest and Additional Interest, if
any, may be made by check mailed to the address of each Holder as such address
appears in the Note Register; provided further
that payment by wire transfer of immediately available funds will be required
with respect to Principal of and interest, and Additional Interest, if any, on,
all Global Notes and all other Notes the Holders of which will have provided
wire transfer instructions to the Company or the Paying Agent.  Such payment will be in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts.


 


D1-3





















 


3.             Paying Agent and Registrar


 


Initially, U.S. Bank National Association, a
national banking association (the “Trustee”),
will act as Paying Agent and Registrar. 
The Company may appoint and change any Paying Agent, Registrar or
co-Registrar without notice to any Holder. 
The Company or any of its Affiliates may act as Paying Agent, Registrar
or co-Registrar.


 


4.             Indenture


 


The Company issued this Note under an Indenture
dated as of May 12, 2009 among the Company, the Guarantors and the Trustee
(the “Indenture”).  This Note is a series designated as the “73/8% Senior Notes due 2016” of the Company.  The Company may issue additional Notes of
this series after this Note has been issued. 
This Note and any additional Notes of this series subsequently issued
under the Indenture shall be treated as a single series for all purposes under
the Indenture, including, without limitation, waivers, amendments, redemptions
and offers to purchase.  The terms of
this Note include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§
77aaa-77bbbb), as amended (the “TIA”).  This Note is subject to all such terms, and
Holders are referred to the Indenture and the TIA for a statement of those
terms.  Any conflict between the terms of
this Note and the Indenture will be governed by the Indenture.


 


5.             Optional Redemption


 


The Notes are redeemable at the Company’s option
prior to May 15, 2016, as described in this Section 5.


 


At any time prior to May 15,
2012, the Company may redeem on any one or more occasions up to 40% of the
aggregate principal amount of the Notes (calculated after giving effect to any
issuance of Additional Securities) issued under the Indenture at a redemption
price of 107.375% of the principal amount thereof plus accrued and unpaid
interest and Additional Interest, if any, to the redemption date, with the net
cash proceeds of one or more Equity Offerings by OI Inc. to the extent the net
cash proceeds thereof are contributed to the Company or used to purchase from
the Company Capital Stock (other than Disqualified Stock) of the Company; provided that: (1) at least 60% of the aggregate
principal amount of the Notes (calculated after giving effect to any issuance
of Additional Securities) issued under the Indenture remains outstanding
immediately after the occurrence of such redemption of Notes (excluding Notes
held by OI Inc. and its Subsidiaries); and (2) the redemption must occur
within 60 days of the date of the closing of such Equity Offering.


 


At any time prior to May 15,
2016, the Company may redeem all or a part of the Notes, upon not less than 10
nor more than 60 days’ prior notice mailed by first-class mail to each Holder’s
registered address, at a redemption price equal to the greater of: (1) 100%
of the principal amount of the Notes to be redeemed; and (2) the present
value at the redemption date (in each case, discounted from the applicable
scheduled payment date) of (1) 100% of the principal amount of the Notes
to be redeemed plus (2) the remaining
scheduled payments of interest from the redemption date through maturity (but
excluding accrued and unpaid interest to the redemption date), computed using a
discount rate equal to the Treasury Rate (determined on 


 


D1-4





















 


the second Business Day
immediately preceding the date of redemption) plus 50 basis points, plus, in either case, accrued and unpaid interest and
Additional Interest, if any, to, the date of redemption (subject to the right
of Holders of record on the relevant Record Date to receive interest due on the
Notes on the relevant Interest Payment Date).


 


“Treasury Rate” means, as of any redemption date,
the yield to maturity as of such redemption date of United States Treasury
securities with a constant maturity (as compiled and published in the most
recent Federal Reserve Statistical Release H.15(519) that has become publicly
available at least two Business Days prior to the redemption date (or, if such
statistical release is no longer published, any publicly available source of
similar market data)) most nearly equal to the period from the redemption date
to May 15, 2016; provided, however, that if the period from the redemption date to May 15,
2016 is less than one year, the weekly average yield on actually traded United
States Treasury securities adjusted to a constant maturity of one year shall be
used.


 


6.             Mandatory Redemption


 


The Company shall not be required to make mandatory
redemption or sinking fund payments with respect to this Note.


 


7.             Repurchase at the Option of
Holder


 


If a Change of Control occurs, unless the Company
has exercised its right to redeem the Notes pursuant to the terms of the
Indenture, each Holder of this Note will have the right to require the Company
to repurchase all or any part (equal to $2,000 or integral multiples of $1,000
in excess thereof) of that Holder’s Notes pursuant to a Change of Control Offer
on the terms set forth in the Indenture. 
If OI Group or a Restricted Subsidiary consummates any Asset Sales, when
the aggregate amount of Excess Proceeds exceeds $25.0 million, the Company will
be required to make an offer (an “Asset Sale
Offer”) to all Holders of the Notes and all Holders of other
Indebtedness that is pari passu with
this Note containing provisions similar to those set forth in the Indenture
with respect to offers to purchase or redeem with the proceeds of sales of
assets (including the Existing Senior Notes issued by the Company) to purchase
the maximum principal amount of the Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds on the terms, in accordance with the
procedures and subject to the limitations set forth in the Indenture and such
other pari passu Indebtedness.


 


8.             Notice of Redemption


 


Notice of redemption shall be mailed by first class
mail at least 10 days but not more than 60 days before the redemption date to each
Holder of this Note to be redeemed. Notices of redemption shall not be
conditional.  Denominations of this Note
larger than $2,000 (in integral multiples of $1,000 in excess thereof) may be
redeemed in part.  If this Note is to be
redeemed in part only, the notice of redemption that relates to that portion to
be redeemed shall state the portion of the principal amount thereof to be
redeemed. A new Note in principal amount equal to the unredeemed portion of the
original Note shall be issued in the name of the Holder thereof upon
cancellation of the original Note.  On
and after the redemption date, interest ceases to accrue on the Note or
portions thereof called for redemption.


 


D1-5





















 


9.             Denominations; Transfer;
Exchange


 


The Note is in registered form, without coupons, in
denominations of $2,000 of principal amount and integral multiples of $1,000 in
excess thereof.  A Holder may transfer or
exchange the Note in accordance with the Indenture.  No service charge will be made for any
registration of transfer or exchange of Notes, but the Company may require the
payment of a sum sufficient to cover any transfer tax or other similar
governmental charge payable in connection therewith, subject to and as permitted
by the Indenture.


 


10.           Persons Deemed Owners


 


The registered Holder of this Note may be treated as
the owner of it for all purposes.


 


11.           Repayment to Company


 


The Trustee and the Paying Agent shall pay to the
Company upon the Company’s request any money held by them for the payment of
Principal or interest that remains unclaimed for two years after the date upon
which such payment shall have become due. 
After payment to the Company, Holders entitled to the money must look to
the Company for payment as general creditors unless an applicable abandoned
property law designates another Person.


 


12.           Discharge and Defeasance


 


Subject to certain conditions, the Company at any
time may terminate some or all of its obligations under this Note and the
Indenture if the Company deposits with the Trustee money and/or Government
Securities for the payment of Principal and interest on this Note to Maturity.


 


13.           Defaults and Remedies


 


Under the Indenture, Events of Default include: (1) defaults
in the payment of interest on, or Additional Interest, if any, with respect to,
the Notes when the same becomes due and payable and the default continues for a
period of 30 days; (2) defaults in the payment of the Principal of the
Notes when the same becomes due and payable at maturity, upon redemption or
otherwise; (3) failure by OI Group or any of its Restricted Subsidiaries
for 60 days after notice to comply with any of the other agreements (other than
those specified in clause (9) below) in the Indenture, the Notes and the
Guarantees of the Notes (with respect to any Guarantor); (4) default under
any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness for money borrowed by
OI Group or any Restricted Subsidiary (or the payment of which is guaranteed by
OI Group or any of its Restricted Subsidiaries) whether such Indebtedness or
Guarantee now exists, or is created after the Issue Date, if that default: (a) is
caused by a failure to pay principal of, or interest or premium, if any, on
such Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a “Payment
Default”); or (b) results in the acceleration of such
Indebtedness prior to its express maturity; provided,
that an Event of Default shall not be deemed to occur with respect to any such
accelerated Indebtedness which is repaid or prepaid within 20 Business Days
after such declaration; and, in any individual case, the


 


D1-6




















 


principal amount of any such Indebtedness is equal
to or in excess of $50.0 million, or such Indebtedness together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$100.0 million or more; (5) any final judgment or order for payment of
money in excess of $50.0 million in any individual case and $100.0 million in
the aggregate at any time shall be rendered against OI Group or any of its
Restricted Subsidiaries and such judgment shall not have been paid, discharged
or stayed for a period of 60 days; (6) except as permitted by the
Indenture, any Guarantee of the Notes shall be held in any judicial proceeding
to be unenforceable or invalid or shall cease for any reason to be in full
force and effect or any Guarantor, or any Person acting on behalf of any
Guarantor, shall deny or disaffirm its obligations under its Guarantee of the
Notes; (7) the Company, OI Group or any Significant Subsidiary of OI Group
pursuant to or within the meaning of any Bankruptcy Law: (a) commences a
voluntary case; (b) consents to the entry of an order for relief against
it in an involuntary case; (c) consents to the appointment of a Custodian
of it or for all or substantially all of its property; (d) makes a general
assignment for the benefit of its creditors; or (e) admits in writing its
inability generally to pay its debts as the same become due; (8) a court
of competent jurisdiction enters an order or decree under any Bankruptcy Law
that: (a) is for relief against the Company, OI Group or any Significant
Subsidiary of OI Group in an involuntary case; (b) appoints a Custodian of
the Company, OI Group or any Significant Subsidiary of OI Group or for all or
substantially all of such entity’s property; or (c) orders the liquidation
of the Company, OI Group or any Significant Subsidiary of OI Group; and, with
respect to (a), (b) and (c), the order or decree remains unstayed and in
effect for 60 days; and (9) failure by OI Group or any of its Restricted
Subsidiaries to comply with the provisions of Sections 4.10 or 4.11 or Article 5
of the Indenture.


 


If an Event of Default other than an Event or
Default specified in clauses (7) and (8) of the preceding paragraph
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of at least 25% in principal amount of the then outstanding Notes by notice to
the Company and the Trustee, as provided in the Indenture, may declare the
unpaid Principal of and any accrued and unpaid interest on the Notes to be due
and payable immediately.  Upon such
declaration the Principal (or such lesser amount) and interest shall be due and
payable immediately.  If an Event of
Default specified in clause (7) or (8) of the preceding paragraph
occurs, all outstanding Notes shall become and be due immediately without any
declaration, act or notice.  At any time
after a declaration of acceleration with respect to the Notes has been made,
the Holders of a majority in principal amount of the then outstanding Notes
may, under certain circumstances, rescind such acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default with respect to the Notes have been cured
or waived except nonpayment of Principal (or such lesser amount) or interest
that has become due solely because of the acceleration.


 


Subject to the duty of the Trustee during an Event
of Default to act with the required standard of care, the Trustee is under no
obligation to exercise any of its rights or powers under the Indenture at the
request of any Holder of this Note, unless such Holder shall have offered to
the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.  Subject to certain
provisions, including those requiring security or indemnification of the
Trustee, the Holders of a majority in principal amount of the outstanding Notes
have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, with respect to
this Note.


 


D1-7

















 


14.           Supplements, Amendments and
Waivers


 


Subject to certain exceptions, the Indenture, the
Notes or the Guarantees of the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the Notes
then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes),
and any existing default or compliance with any provision of the Indenture, the
Notes or the Guarantees of the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes).  The Company and the Trustee may amend or
supplement the Indenture, the Notes and the Guarantees of the Notes without
notice to or the consent of any holder of Notes in certain circumstances
described in the Indenture.


 


15.           Trustee Dealings with the
Company


 


The Trustee, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Company or its Affiliates, with the same rights as if it were not the
Trustee; however, if it acquires any conflicting interest as defined in the TIA
it must eliminate such conflict within 90 days, apply to the Commission for
permission to continue or resign.


 


16.           No Recourse Against Others


 


A past, present or future director, officer,
employee, incorporator or stockholder, as such, of the Company or any
Guarantor, if any, or any successor corporation shall not have any liability
for any obligations of the Company or any Guarantor under the Notes, the
Indenture or the Guarantees of the Notes, if any, or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.


 


17.           Guarantees


 


This Note will be entitled to the benefits of
certain Guarantees made for the benefit of the Holders. Reference is hereby
made to the Indenture for a statement of the respective rights, limitations of
rights, duties and obligations thereunder of the Guarantors, the Trustee and
the Holders.


 


18.           Governing Law


 


THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.


 


19.           Authentication


 


This Note shall not be valid until an authorized
signatory of the Trustee (or an authenticating agent) manually signs the
certificate of authentication hereon.


 


D1-8

















 


20.           Abbreviations


 


Customary abbreviations may be used in the name of a
Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants
by the entireties), JT TEN (=joint tenants with rights of survivorship and not
as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).


 


21.           Additional Rights of Holders
of Restricted Global Notes and Restricted Definitive Notes


 


In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement.


 


22.           CUSIP Numbers


 


Pursuant to a recommendation promulgated by the
Committee on Uniform Note Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers
in notices as a convenience to Holders. 
No representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice and reliance may be placed
only on the other identification numbers placed thereon.


 


The Company will furnish to any Holder upon written
request and without charge to the Holder a copy of the Indenture and the
Registration Rights Agreement.  Such
requests may be addressed to:


 


	
   

  	
  Owens-Brockway Glass Container, Inc.

  
	
   

  	
  c/o Owens-Illinois Group, Inc.

  
	
   

  	
  One O-I Plaza

  
	
   

  	
  One Michael Owens Way

  
	
   

  	
  Perrysburg, OH 43551

  
	
   

  	
  Attention: Investor Relations

  



 


D1-9





















 


ASSIGNMENT FORM


 


	
  To assign this Note, fill in the form below:

  
	
   

  
	
  I or we assign and transfer this Note to:

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  [Print
  or type assignee’s name, address and zip code]

  
	
   

  
	
   

  
	
  [Insert
  assignee’s soc. sec. or tax I.D. No.]

  
	
   

  
	
  and
  irrevocably appoint

  
	
   

  
	
   

  
	
  [Print
  or type agent’s name]

  
	
   

  
	
  agent
  to transfer this Note on the books of the Company. The agent may substitute
  another to act for him.

  
	
   

  
	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on the
  face of this Note)

  
	
   

  
	
  SIGNATURE
  GUARANTEE

  
	
   

  
	
   

  	
   

  
	
  Participant in a Recognized Signature 

  	
   

  
	
  Guarantee Medallion Program

  	
   

  
						



 


D1-10





















 


OPTION OF HOLDER TO ELECT
PURCHASE


 


If you want to elect to have this Note purchased by
the Company pursuant to Section 4.10 or 4.11 of the Indenture, check the
box below:


 


o  Section 4.10                                         o  Section 4.11


 


If you want to elect to have only part of the Note
purchased by the Company pursuant to Section 4.10 or Section 4.11 of
the Indenture, state the amount you elect to have purchased:  $
                   


 


 


	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on the
  face of this Note)

  
	
   

  
	
   

  	
  Tax Identification No:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
  SIGNATURE
  GUARANTEE

  
	
   

  
	
   

  	
   

  
	
  Participant in a Recognized Signature 

  	
   

  
	
  Guarantee Medallion Program

  	
   

  
							



 


D1-11

















 


SCHEDULE OF EXCHANGES OF
INTERESTS IN THE GLOBAL NOTE*


 


The following exchanges of a part of this Global
Note for an interest in another Global Note or for a Definitive Note, or
exchanges of a part of another Global Note or Definitive Note for an interest
in this Global Note, have been made:


 


	
  Date of Exchange

  	
   

  	
  Amount of

  decrease in

  Principal Amount

  of this Global

  Note

  	
   

  	
  Amount of

  increase in

  Principal Amount

  of this Global

  Note

  	
   

  	
  Principal Amount

  of this Global

  Note following

  such decrease (or

  increase)

  	
   

  	
  Signature of

  authorized

  signatory of

  Trustee or

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






*  This should be included only
if the Note is issued in global form.


 


D1-12





















 


EXHIBIT D-2

[FORM OF REGULATION S TEMPORARY GLOBAL NOTE]


 


[Insert the Global Security Legend, if applicable pursuant to the
provisions of the Indenture]


 


[Insert the Private Placement Legend, if applicable pursuant to the
provisions of the Indenture]


 


[Insert the OID Legend, pursuant to the provisions of the Indenture]


 


[Insert the Regulation S Legend, pursuant to the provisions of the
Indenture]


 


[Insert the Regulation S Temporary Global Security Legend, pursuant to
the provisions of the Indenture]


 


OWENS-BROCKWAY GLASS CONTAINER INC.


 


73/8% SENIOR NOTES DUE 2016


 


	
  Number:

  	
   

  	
  CUSIP
  No.
                     

  	
   

  	
  $                

  



 


OWENS-BROCKWAY GLASS CONTAINER INC., a Delaware
corporation (the “Company”), for value received, hereby promises to pay to Cede &
Co., as nominee of The Depository Trust Company, or registered assigns, the
principal sum of                                                                                                                                       
DOLLARS
($                  )
on May 15, 2016.


 


Interest Payment Dates:  February 1 and August 1, commencing
August 1, 2009.


 


Record Dates: 
January 15 and July 15.


 


Additional provisions of this Note are set forth
below following the signatures of the authorized officers of the Company.


 


D2-1

















 


IN WITNESS WHEREOF, the Company has caused this Note
to be signed manually or by facsimile by its duly authorized officers.


 


	
   

  	
  OWENS-BROCKWAY GLASS CONTAINER INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Dated:  May 12, 2009


 


TRUSTEE’S CERTIFICATE OF
AUTHENTICATION


 


This is one of the Notes
referred to in the within-mentioned Indenture.


 


U.S. BANK NATIONAL
ASSOCIATION, as Trustee


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  



 


D2-2

















 


OWENS-BROCKWAY
GLASS CONTAINER INC.


 


73/8% SENIOR NOTES DUE 2016


 


Capitalized terms used herein shall have the
meanings assigned to them in the Indenture referred to below unless otherwise
indicated.


 


1.             Interest


 


OWENS-BROCKWAY GLASS CONTAINER INC., a Delaware
corporation (such entity, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount
of this Note at the rate per annum shown above and shall pay the Additional
Interest, if any, payable pursuant to Section 5 of the Registration Rights
Agreement.  Interest on this Note shall
accrue from May 12, 2009 or from the most recent interest payment date to
which interest has been paid or provided for, as the case may be; interest and
Additional Interest, if any, on this Note shall be payable semi-annually on February 1
and August 1 of each year until maturity, or, if such day is not a
Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”), commencing on August 1,
2009; and interest on this Note shall be payable to holders of record on the January 15
or July 15 immediately preceding the applicable Interest Payment
Date.  Interest will be computed on the
basis of a 360-day year of twelve 30-day months.  The Company shall pay defaulted interest on
overdue interest, plus (to the extent lawful) any interest payable on the
defaulted interest, as provided in Section 2.11 of the Indenture.


 


Until this Regulation S Temporary Global Note is
exchanged for one or more Regulation S Permanent Global Notes, the Holder
hereof shall not be entitled to receive payments of interest hereon; until so
exchanged in full, this Regulation S Temporary Global Note shall in all other
respects be entitled to the same benefits as other Notes under the Indenture.


 


2.             Method of Payment


 


The Company will pay interest and Additional
Interest, if any, on this Note (except defaulted interest) to the Persons who
are holders (“Holders”) of record
in the note register of the Company (the “Register”)
of this Note at the close of business on the January 15 or July 15
(each, a “Record Date”) next
preceding the Interest Payment Date, in each case even if the Note is cancelled
solely by virtue of registration of transfer or registration of exchange after
such Record Date.  The Company will pay
Principal, interest and Additional Interest, if any, in money of the United
States that at the time of payment is legal tender for payment of public and
private debts.  Principal of and interest
and Additional Interest, if any, on this Note will be payable, and this Note
may be exchanged or transferred, at the office or agency of the Company in the
Borough of Manhattan, the City of New York (which initially will be a Corporate
Trust Office of the Trustee); provided that,
at the option of the Company, payment of interest and Additional Interest, if
any, may be made by check mailed to the address of each Holder as such address
appears in the Note Register;  provided further that payment by wire
transfer of immediately available funds will be required with respect to
Principal of and interest, and Additional Interest, if any, on, all Global
Notes and all other Notes the Holders of which will 


 


D2-3

















 


have provided wire transfer instructions to the
Company or the Paying Agent.  Such
payment will be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.


 


3.             Paying Agent and Registrar


 


Initially, U.S. Bank National Association, a
national banking association (the “Trustee”),
will act as Paying Agent and Registrar. 
The Company may appoint and change any Paying Agent, Registrar or
co-Registrar without notice to any Holder. 
The Company or any of its Affiliates may act as Paying Agent, Registrar
or co-Registrar.


 


4.             Indenture


 


The Company issued this Note under an Indenture
dated as of May 12, 2009 among the Company, the Guarantors and the Trustee
(the “Indenture”).  This Note is a series designated as the “73/8% Senior Notes due 2016” of the Company.  The Company may issue additional Notes of
this series after this Note has been issued. 
This Note and any additional Notes of this series subsequently issued under
the Indenture shall be treated as a single series for all purposes under the
Indenture, including, without limitation, waivers, amendments, redemptions and
offers to purchase.  The terms of this
Note include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb), as
amended (the “TIA”).  This Note is subject to all such terms, and
Holders are referred to the Indenture and the TIA for a statement of those
terms.  Any conflict between the terms of
this Note and the Indenture will be governed by the Indenture.


 


5.             Optional Redemption


 


The Notes are redeemable at the Company’s option
prior to May 15, 2016, as described in this Section 5.


 


At any time prior to May 15,
2012, the Company may redeem on any one or more occasions up to 40% of the
aggregate principal amount of the Notes (calculated after giving effect to any
issuance of Additional Securities) issued under the Indenture at a redemption
price of 107.375% of the principal amount thereof plus accrued and unpaid
interest and Additional Interest, if any, to the redemption date, with the net
cash proceeds of one or more Equity Offerings by OI Inc. to the extent the net
cash proceeds thereof are contributed to the Company or used to purchase from the
Company Capital Stock (other than Disqualified Stock) of the Company; provided that: (1)  at least 60% of the aggregate principal amount of
the Notes (calculated after giving effect to any issuance of Additional
Securities) issued under the Indenture remains outstanding immediately after
the occurrence of such redemption of Notes (excluding Notes held by OI Inc. and
its Subsidiaries); and (2) the redemption must occur within 60 days of the
date of the closing of such Equity Offering.


 


At any time prior to May 15,
2016, the Company may redeem all or a part of the Notes, upon not less than 10
nor more than 60 days’ prior notice mailed by first-class mail to each Holder’s
registered address, at a redemption price equal to the greater of: (1) 100%
of the principal amount of the Notes to be redeemed; and (2) the present
value at the redemption date (in each case, discounted from the applicable
scheduled payment date) of (1) 100% of the


 


D2-4
















 


principal amount of the Notes to be redeemed plus (2) the
remaining scheduled payments of interest from the redemption date through
maturity (but excluding accrued and unpaid interest to the redemption date),
computed using a discount rate equal to the Treasury Rate (determined on the
second Business Day immediately preceding the date of redemption) plus 50 basis
points, plus, in either case, accrued and unpaid
interest and Additional Interest, if any, to, the date of redemption (subject
to the right of Holders of record on the relevant Record Date to receive
interest due on the Notes on the relevant Interest Payment Date).


 


“Treasury Rate” means, as of any redemption
date, the yield to maturity as of such redemption date of United States
Treasury securities with a constant maturity (as compiled and published in the
most recent Federal Reserve Statistical Release H.15(519) that has become
publicly available at least two Business Days prior to the redemption date (or,
if such statistical release is no longer published, any publicly available
source of similar market data)) most nearly equal to the period from the
redemption date to May 15, 2016; provided, however, that if the period from the redemption date to May 15,
2016 is less than one year, the weekly average yield on actually traded United
States Treasury securities adjusted to a constant maturity of one year shall be
used.


 


6.             Mandatory Redemption


 


The Company shall not be required to make
mandatory redemption or sinking fund payments with respect to this Note.


 


7.             Repurchase at the Option of
Holder


 


If a Change of Control occurs, unless the
Company has exercised its right to redeem the Notes pursuant to the terms of
the Indenture, each Holder of this Note will have the right to require the
Company to repurchase all or any part (equal to $2,000 or integral multiples of
$1,000 in excess thereof) of that Holder’s Notes pursuant to a Change of
Control Offer on the terms set forth in the Indenture.  If OI Group or a Restricted Subsidiary
consummates any Asset Sales, when the aggregate amount of Excess Proceeds
exceeds $25.0 million, the Company will be required to make an offer (an “Asset Sale Offer”) to all Holders of the
Notes and all Holders of other Indebtedness that is pari passu with this Note containing provisions similar to
those set forth in the Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets (including the Existing Senior Notes
issued by the Company) to purchase the maximum principal amount of the Notes
and such other pari passu Indebtedness
that may be purchased out of the Excess Proceeds on the terms, in accordance
with the procedures and subject to the limitations set forth in the Indenture
and such other pari passu Indebtedness.


 


8.             Notice of Redemption


 


Notice of redemption shall be mailed by first
class mail at least 10 days but not more than 60 days before the redemption
date to each Holder of this Note to be redeemed. Notices of redemption shall
not be conditional.  Denominations of
this Note larger than $2,000 (in integral multiples of $1,000 in excess
thereof) may be redeemed in part.  If
this Note is to be redeemed in part only, the notice of redemption that relates
to that portion to be redeemed shall state the portion of the principal amount
thereof to be redeemed. A new Note in principal amount 


 


D2-5

















 


equal to the
unredeemed portion of the original Note shall be issued in the name of the
Holder thereof upon cancellation of the original Note.  On and after the redemption date, interest
ceases to accrue on the Note or portions thereof called for redemption.


 


9.             Denominations; Transfer;
Exchange


 


The Note is in registered form, without
coupons, in denominations of $2,000 of principal amount and integral multiples
of $1,000 in excess thereof.  A Holder
may transfer or exchange the Note in accordance with the Indenture.  No service charge will be made for any
registration of transfer or exchange of Notes, but the Company may require the
payment of a sum sufficient to cover any transfer tax or other similar
governmental charge payable in connection therewith, subject to and as
permitted by the Indenture.


 


This Regulation S Temporary Global Note is
exchangeable in whole or in part for one or more Global Notes only (i) on
or after the termination of the 40-day restricted period (as defined in
Regulation S) and (ii) upon presentation of certificates (accompanied by
an Opinion of Counsel, if applicable) required by Article 2 of the
Indenture.  Upon exchange of this
Regulation S Temporary Global Note for one or more Global Notes, the Trustee
shall cancel this Regulation S Temporary Global Note.


 


10.           Persons Deemed Owners


 


The registered Holder of this Note may be
treated as the owner of it for all purposes.


 


11.           Repayment to Company


 


The Trustee and the Paying Agent shall pay to
the Company upon the Company’s request any money held by them for the payment
of Principal or interest that remains unclaimed for two years after the date
upon which such payment shall have become due. 
After payment to the Company, Holders entitled to the money must look to
the Company for payment as general creditors unless an applicable abandoned
property law designates another Person.


 


12.           Discharge and Defeasance


 


Subject to certain conditions, the Company at
any time may terminate some or all of its obligations under this Note and the
Indenture if the Company deposits with the Trustee money and/or Government
Securities for the payment of Principal and interest on this Note to Maturity.


 


13.           Defaults and Remedies


 


Under the Indenture, Events of Default
include: (1) defaults in the payment of interest on, or Additional
Interest, if any, with respect to, the Notes when the same becomes due and
payable and the default continues for a period of 30 days; (2) defaults in
the payment of the Principal of the Notes when the same becomes due and payable
at maturity, upon redemption or otherwise; (3) failure by OI Group or any
of its Restricted Subsidiaries for 60 days after notice to comply with any of
the other agreements (other than those specified in clause (9) below) in
the 


 


D2-6

















 


Indenture, the
Notes and the Guarantees of the Notes (with respect to any Guarantor); (4) default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by OI Group or any Restricted Subsidiary (or the payment of which is guaranteed
by OI Group or any of its Restricted Subsidiaries) whether such Indebtedness or
Guarantee now exists, or is created after the Issue Date, if that default: (a) is
caused by a failure to pay principal of, or interest or premium, if any, on
such Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a “Payment
Default”); or (b) results in the acceleration of such
Indebtedness prior to its express maturity; provided, that
an Event of Default shall not be deemed to occur with respect to any such
accelerated Indebtedness which is repaid or prepaid within 20 Business Days
after such declaration; and, in any individual case, the principal amount of
any such Indebtedness is equal to or in excess of $50.0 million, or such
Indebtedness together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $100.0 million or more; (5) any final judgment
or order for payment of money in excess of $50.0 million in any individual case
and $100.0 million in the aggregate at any time shall be rendered against OI
Group or any of its Restricted Subsidiaries and such judgment shall not have
been paid, discharged or stayed for a period of 60 days; (6) except as
permitted by the Indenture, any Guarantee of the Notes shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect or any Guarantor, or any Person acting on
behalf of any Guarantor, shall deny or disaffirm its obligations under its
Guarantee of the Notes; (7) the Company, OI Group or any Significant
Subsidiary of OI Group pursuant to or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case; (b) consents to the entry of an order
for relief against it in an involuntary case; (c) consents to the
appointment of a Custodian of it or for all or substantially all of its
property; (d) makes a general assignment for the benefit of its creditors;
or (e) admits in writing its inability generally to pay its debts as the
same become due; (8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (a) is for relief against the
Company, OI Group or any Significant Subsidiary of OI Group in an involuntary
case; (b) appoints a Custodian of the Company, OI Group or any Significant
Subsidiary of OI Group or for all or substantially all of such entity’s
property; or (c) orders the liquidation of the Company, OI Group or any
Significant Subsidiary of OI Group; and, with respect to (a), (b) and (c),
the order or decree remains unstayed and in effect for 60 days; and (9) failure
by OI Group or any of its Restricted Subsidiaries to comply with the provisions
of Sections 4.10 or 4.11 or Article 5 of the Indenture.


 


If an Event of Default other than an Event or
Default specified in clauses (7) and (8) of the preceding paragraph
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of at least 25% in principal amount of the then outstanding Notes by notice to
the Company and the Trustee, as provided in the Indenture, may declare the
unpaid Principal of and any accrued and unpaid interest on the Notes to be due
and payable immediately.  Upon such declaration
the Principal (or such lesser amount) and interest shall be due and payable
immediately.  If an Event of Default
specified in clause (7) or (8) of the preceding paragraph occurs, all
outstanding Notes shall become and be due immediately without any declaration,
act or notice.  At any time after a
declaration of acceleration with respect to the Notes has been made, the
Holders of a majority in principal amount of the then outstanding Notes may,
under certain circumstances, rescind such acceleration and its consequences if
the rescission would not conflict with any judgment or decree and if all
existing Events of Default with respect to the 


 


D2-7

















 


Notes have
been cured or waived except nonpayment of Principal (or such lesser amount) or
interest that has become due solely because of the acceleration.


 


Subject to the duty of the Trustee during an
Event of Default to act with the required standard of care, the Trustee is
under no obligation to exercise any of its rights or powers under the Indenture
at the request of any Holder of this Note, unless such Holder shall have
offered to the Trustee security and indemnity satisfactory to it against any
loss, liability or expense.  Subject to
certain provisions, including those requiring security or indemnification of
the Trustee, the Holders of a majority in principal amount of the outstanding
Notes have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, with respect to
this Note.


 


14.           Supplements, Amendments and
Waivers


 


Subject to certain exceptions, the Indenture,
the Notes or the Guarantees of the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
Notes then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes),
and any existing default or compliance with any provision of the Indenture, the
Notes or the Guarantees of the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes).  The Company and the Trustee may amend or
supplement the Indenture, the Notes and the Guarantees of the Notes without
notice to or the consent of any holder of Notes in certain circumstances
described in the Indenture.


 


15.           Trustee Dealings with the Company


 


The Trustee, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Company or its Affiliates, with the same rights as if it were not the
Trustee; however, if it acquires any conflicting interest as defined in the TIA
it must eliminate such conflict within 90 days, apply to the Commission for
permission to continue or resign.


 


16.           No Recourse Against Others


 


A past, present or future director, officer,
employee, incorporator or stockholder, as such, of the Company or any
Guarantor, if any, or any successor corporation shall not have any liability
for any obligations of the Company or any Guarantor under the Notes, the
Indenture or the Guarantees of the Notes, if any, or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.


 


17.           Guarantees


 


This Note will be entitled to the benefits of
certain Guarantees made for the benefit of the Holders. Reference is hereby
made to the Indenture for a statement of the respective rights, limitations of
rights, duties and obligations thereunder of the Guarantors, the Trustee and
the Holders.


 


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18.           Governing Law


 


THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.


 


19.           Authentication


 


This Note shall not be valid until an
authorized signatory of the Trustee (or an authenticating agent) manually signs
the certificate of authentication hereon.


 


20.           Abbreviations


 


Customary abbreviations may be used in the
name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A
(=Uniform Gift to Minors Act).


 


21.           Additional Rights of Holders of
Restricted Global Notes and Restricted Definitive Notes


 


In addition to the rights provided to Holders
of Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement.


 


22.           CUSIP Numbers


 


Pursuant to a recommendation promulgated by
the Committee on Uniform Note Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers
in notices as a convenience to Holders. 
No representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice and reliance may be placed
only on the other identification numbers placed thereon.


 


The Company will furnish to any Holder upon
written request and without charge to the Holder a copy of the Indenture and
the Registration Rights Agreement.  Such
requests may be addressed to:


 


	
   

  	
  Owens-Brockway Glass Container, Inc.

  
	
   

  	
  c/o Owens-Illinois Group, Inc.

  
	
   

  	
  One O-I Plaza

  
	
   

  	
  One Michael Owens Way

  
	
   

  	
  Perrysburg, OH 43551

  
	
   

  	
  Attention: Investor Relations

  
	
   

  	
   

  
	
   

  	
   

  



 


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ASSIGNMENT
FORM


 


To assign this Note,
fill in the form below:


 


I or we assign and transfer this Note to:


 




 





 




 





 




 





 




 





[Print or type assignee’s name, address and
zip code]


 




 





[Insert assignee’s soc. sec. or tax I.D. No.]


 


and
irrevocably appoint


 




 





[Print or type agent’s name]


 


agent to
transfer this Note on the books of the Company. 
The agent may substitute another to act for him.


 




 





 


	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

  	
  (Sign
  exactly as your name appears on the face of this Note)

  



 


SIGNATURE
GUARANTEE


 


	
   

  	
   

  
	
  Participant in a Recognized Signature

  	
   

  
	
  Guarantee Medallion Program

  	
   

  



 


D2-10

















 


OPTION OF
HOLDER TO ELECT PURCHASE


 


If you want to elect to have this Note
purchased by the Company pursuant to Section 4.10 or 4.11 of the
Indenture, check the box below:


 


o  Section 4.10                                         o  Section 4.11


 


If you want to elect to have only part of the
Note purchased by the Company pursuant to Section 4.10 or Section 4.11
of the Indenture, state the amount you elect to have purchased:  $                


 


 


	
  Date:

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

  	
  (Sign
  exactly as your name appears on the face of this Note)

  
	
   

  	
   

  	
   

  
	
   

  	
  Tax
  Identification No:

  	
   

  
						



 


SIGNATURE
GUARANTEE


 


	
   

  	
   

  
	
  Participant in a Recognized Signature 

  	
   

  
	
  Guarantee Medallion Program

  	
   

  



 


D2-11

















 


SCHEDULE OF
EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*


 


The following exchanges of a part of this
Global Note for an interest in another Global Note or for a Definitive Note, or
exchanges of a part of another Global Note or Definitive Note for an interest
in this Global Note, have been made:


 


	
  Date of
  Exchange

  	
   

  	
  Amount of

  decrease in

  Principal Amount

  of this Global

  Note

  	
   

  	
  Amount of

  increase in

  Principal Amount

  of this Global

  Note

  	
   

  	
  Principal
  Amount

  of this Global

  Note following

  such decrease (or

  increase)

  	
   

  	
  Signature of

  authorized

  signatory of

  Trustee or

  Custodian

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






*  This
should be included only if the Note is issued in global form.


 


D2-12