Document:

Exhibit 4.2

 

EXECUTION COPY

 

	
   

  

OWENS BROCKWAY
GLASS CONTAINER INC.

 

Issuer

 

and

 

The Guarantors
set forth in Annex A attached hereto

 

 

Fourth
Supplemental Indenture

dated as of
May 6, 2003

 

7 3/4%
Senior Secured Notes due 2011

 

 

U.S. Bank
National Association

 

Trustee

	
   

  

 

 

Fourth Supplemental Indenture, dated as of
May 6, 2003
(the “Fourth Supplemental Indenture”),
to the Indenture, dated as of January 24, 2002 (the “Indenture”) among Owens-Brockway Glass Container Inc., a
Delaware corporation (the “Company”),
the Guarantors (as defined in the Indenture) and U.S. Bank National
Association, a national banking association, as Trustee (the “Trustee”).

 

W I T N E S S E T H

 

WHEREAS, the Company duly authorized,
executed and delivered to the Trustee the Indenture to provide for the issuance
from time to time of its Securities (as defined in the Indenture) to be issued
in one or more series;

 

WHEREAS, the Company and the Guarantors
desire and have requested the Trustee to join it in the execution and delivery
of this Fourth Supplemental Indenture in order to establish and provide for the
issuance by the Company of a series of Securities designated as its 7 3/4%
Senior Secured Notes due 2011 in an unlimited aggregate principal amount (the “Notes”), on the terms set forth herein;

 

WHEREAS, the Company now wishes to issue
$450,000,000 of Notes;

 

WHEREAS, Section 9.01 of the Indenture
provides that a supplemental indenture may be entered into by the Company, the
Guarantors and the Trustee without the consent of any holder of any Securities
to, inter alia, establish the
terms of any Securities permitted by Sections 2.01 and 2.02 of the Indenture, provided certain conditions are met;

 

WHEREAS, the conditions set forth in the
Indenture for the execution and delivery of this Fourth Supplemental Indenture
have been satisfied; and

 

WHEREAS, all things necessary to make this
Fourth Supplemental Indenture a valid agreement of the Company, the Guarantors
and the Trustee, in accordance with its terms, and a valid amendment of, and
supplement to, the Indenture have been done.

 

NOW THEREFORE:

 

There is hereby established a series of
Securities to be issued under the Indenture, which series of Securities shall
have the terms set forth herein and in the Notes, and in consideration of the
premises and the purchase and acceptance of the Notes by the Holders thereof,
the Company and the Guarantors mutually covenant and agree with the Trustee,
for the equal and proportionate benefit of all holders of the Notes, that the
Indenture is supplemented and amended, to the extent and for the purposes
expressed herein, as follows:

 

 

ARTICLE 1.

 

SCOPE OF THIS FOURTH SUPPLEMENTAL INDENTURE

 

Section 1.01.        Changes, etc. Applicable Only to the Notes.  

 

The changes, modifications and supplements to
the Indenture effected by this Fourth Supplemental Indenture in Sections 2.01
through 2.10 hereof shall only be applicable with respect to, and govern the
terms of, the Notes, which shall not be limited in aggregate principal amount,
and shall not apply to any other Securities which may be issued under the
Indenture unless a supplemental indenture with respect to such other Securities
specifically incorporates such changes, modifications and supplements.

 

ARTICLE 2.

 

AMENDMENTS TO THE INDENTURE

 

Section
2.01.        Amendments to Article 1.

 

Section 1.01 of the Indenture is hereby
amended by adding the following definitions in their proper alphabetical order
which, in the event of a conflict with the definition of terms in the
Indenture, shall control:

 

“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.

 

“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 this Indenture or 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 

 

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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.

 

“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), other than the Principals and their Related Parties,
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 Company consolidates with, or merges with or
into, any Person, or any Person consolidates with, or merges with or into the
Company, in any such event pursuant to a transaction in which any of the
outstanding Voting Stock of the Company or such other Person is converted into
or exchanged for cash, securities or other property, other than any such
transaction where (A) the Voting Stock of the Company outstanding
immediately prior to such transaction is converted into or exchanged for Voting
Stock (other than Disqualified Stock) of the surviving or transferee Person
constituting a majority of the

 

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outstanding
shares of such Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance) and (B) immediately after such
transaction, no “person” or “group” (as such terms are used in
Section 13(d) and 14(d) of the Exchange Act), other than the Principals
and their Related Parties, becomes, directly or indirectly, the beneficial
owner (as defined above) of 35% or more of the voting power of all classes of
Voting Stock of the Company; or (4) the first day on which OI Inc. fails
to own 100% of the issued and outstanding Equity Interests of OI Group.

 

“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.

 

“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.

 

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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 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 

 

5

 

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.

 

“Credit Agreement” means that certain Secured Credit Agreement,
dated as of April 23, 2001, by and among the Borrowers named therein, OI Group
and Owens-Illinois General, Inc., as Borrower’s Agent, Deutsche Bank Securities
Inc., formerly Deutsche Banc Alex. Brown, and Banc of America Securities LLC,
as Joint Lead Arrangers and Joint Book Managers, Deutsche Bank AG, London Branch,
as UK Administrative Agent, Deutsche Bank Trust Company Americas, formerly
Bankers Trust Company, as Administrative Agent, and the other Agents and the
other Lenders named therein, 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, OI General
FTS Inc. and OI Plastic Products FTS Inc., to the extent at the time
of determination such entity 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
(collectively, “Bank
Facilities”); 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.

 

“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 an officer 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 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

 

6

 

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.

 

“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.).

 

“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 (including the 8 1/4% Senior Notes due 2013 offered concurrently herewith
and the related Guarantees to be issued on the Issue Date and the exchange
notes and the related Guarantees to be issued as contemplated by the
registration rights agreement executed with respect thereto), until such
amounts are repaid or terminated.

 

“Existing IRBs” means the Holmes County Ohio 5.85% Industrial Revenue
Bonds due 2007, the Kansas City, Missouri Industrial Development Revenue Bonds
due 2008 and the City of Mentor, Ohio Industrial Development Bonds due 2004,
and any extensions, renewals or refinancings thereof to the extent that such
extensions, renewals and refinancings thereof do not result in an increase in
the aggregate principal amount of such Existing IRBs.

 

“Existing Senior
Notes” means
the Company’s 8 7/8%
Senior Secured Notes due 2009 and its 8 3/4% Senior Secured Notes due
2012.

 

“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 

 

7

 

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, 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.

 

“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 

 

8

 

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.

 

“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 the Fourth Supplemental
Indenture; and their respective successors and assigns.

 

“Intercreditor Agreement”
means the intercreditor agreement, dated as of April 23, 2001, by and among
Deutsche Bank Trust Company Americas, formerly Bankers Trust Company, as
administrative agent for the lenders party to the Credit Agreement, Deutsche
Bank Trust Company Americas, formerly Bankers Trust Company, 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 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 

 

9

 

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’ 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
the date on which the Notes are originally issued.

 

“KKR” means Kohlberg Kravis Roberts & Co.,
L.P., a Delaware limited partnership.

 

“Liquidated
Damages” means the payment of liquidated damages as set forth in the
Registration Rights Agreement.

 

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

 

10

 

“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.

 

“Notes” shall have
the meaning specified in the second recital of the Fourth Supplemental
Indenture.

 

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

 

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

 

“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 $300.0 million aggregate principal amount
of 7.85% Senior Notes due 2004, $350.0 million aggregate principal amount
of 7.15% Senior Notes due 2005, $300.0 million aggregate principal amount
of 8.10% Senior Notes due 2007, $250.0 million aggregate principal amount
of 7.35% Senior Notes due 2008, $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.

 

“Permitted Business” means any business conducted or
proposed to be conducted (as described in the offering memorandum) by OI Group
and its Restricted 

 

11

 

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, 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 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) 

 

12

 

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, 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 of the
$300.0 million aggregate principal amount of 7.85% Senior Notes due 2004,
the $350.0 million aggregate principal amount of 7.15% Senior Notes due
2005 of OI Inc., the $300.0 million aggregate principal amount of
8.10% Senior Notes due 2007, the $250.0 million aggregate principal amount
of 7.35% Senior Notes due 2008 and the $250.0 million aggregate principal
amount of 7.50% Senior Debentures due 2010, and the Existing IRBs and up to an
additional $50.0 million of IRB 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, 

 

13

 

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.

 

“Pledge Agreement” means the Pledge Agreement, dated as of April 23,
2001, by and among OI Group, OI Packaging, and Deutsche Bank Trust Company
Americas, formerly Bankers Trust Company, as Collateral Agent, as amended,
amended and restated or otherwise modified from time to time.

 

“Principals”
means KKR and its Affiliates.

 

“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 6, 2003, 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 Temporary Global Security” means
a temporary Global Security in the form of Exhibit D-2 bearing the Global
Security Legend, the Private Placement Legend and the Regulation S Temporary
Global Security 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.

 

“Related
Party” means: (1) any controlling stockholder, partner, member, 80%
(or more) owned Subsidiary, or immediate family member (in the case of an
individual) of any of the Principals; or (2)
any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of any one or more Principals and/or such
other Persons referred to in the immediately preceding clause (1).

 

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

 

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

 

“Security Agreement”
means the Security Agreement, dated as of April 23, 2001, 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 thereto, and
Deutsche Bank Trust Company Americas, formerly Bankers Trust 

 

14

 

Company, 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 January 24, 2002.

 

“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.

 

“Unrestricted Subsidiary” means any Subsidiary of OI Group
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 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.

 

15

 

“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 2.02.        Amendments to Article 2.

 

(a)           Section
2.06 of the Indenture is hereby amended by adding, immediately following the
final paragraph of such Section 2.06:

 

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 Security” 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).

 

(b)           Section
2.08 of the Indenture is hereby amended by deleting such Section 2.08 in its
entirety and replacing it with the following Section 2.08:

 

Section
2.08         Outstanding Securities.

 

The Securities of any series outstanding at any time are all the
Securities of that series 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
Security does not cease to be outstanding because the Company or an Affiliate
of the Company holds the Security.

 

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

 

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

 

For each series of Original Issue Discount Securities, the principal amount
of such Securities that shall be deemed to be outstanding and used to determine
whether the necessary Holders have given any request, demand, authorization,
direction, notice, 

 

16

 

consent or waiver shall be the principal
amount of such Securities that could be declared to be due and payable upon
acceleration upon an Event of Default as of the date of such determination.
When requested by the Trustee, the Company shall advise the Trustee of such
amount, showing its computations in reasonable detail.

 

In determining whether the Holders of the
required principal amount of Securities of any series have concurred in any
direction, waiver or consent, Securities 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 Securities
as to which a Trust Officer of the Trustee has actual knowledge are so owned
shall be so disregarded.  Securities
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 2.03.        Amendments to Article 3.

 

Article 3 of the Indenture is hereby amended by adding, immediately following
Section 3.06 thereof, the following new Sections 3.07 and 3.08:

 

Section 3.07.        Optional
Redemption.

 

Except as described in this Section 3.07, the Notes shall not be
redeemable at the Company’s option prior to May 15, 2007.

 

(a)           On or after
May 15, 2007, the Company may redeem all or a part of the Notes upon not
less than 30 nor more than 60 days’ notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages, if any, thereon, to the applicable
redemption date, if redeemed during the twelve-month period beginning on
May 15 of the years indicated below: 

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2007

  	
   

  	
  103.875

  	
  %

  
	
  2008

  	
   

  	
  102.583

  	
  %

  
	
  2009

  	
   

  	
  101.292

  	
  %

  
	
  2010 and
  thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)           At
any time prior to May 15, 2006,
the Company may redeem on any one or more occasions up to 35% of the aggregate principal amount of Notes (calculated after
giving effect to any issuance of Additional Securities) issued under this
Indenture at a redemption price of 107.750% of the principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages, 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:

 

17

 

(1)                                  at
least 65% of the aggregate principal amount of Notes (calculated after giving
effect to any issuance of Additional Securities) issued under this Indenture
remains outstanding immediately after the occurrence of such redemption
(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, 2007,
the Notes may be redeemed, in whole but not in part, at the option of the
Company upon the occurrence of a Change of Control, upon not less than 30 nor
more than 60 days’ prior notice (but in no event more than 90 days after
the occurrence of such Change of Control) mailed by first-class mail to
each Holder’s registered address, at a redemption price equal to 100% of the
principal amount of Notes redeemed plus the Applicable Premium as of, and
accrued and unpaid interest and Liquidated Damages, 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).

 

“Applicable
Premium” means, with respect to any Note on any redemption date, the
greater of:

 

(1)           1.0%
of the principal amount of such Note; or

 

(2)           the
excess of:

 

(a)                                  the
present value at such redemption date of (1) the redemption price of such
Note at May 15, 2007 (such redemption price being set forth in the table
above) plus (2) all required interest payments due on such Note through
May 15, 2007, (including accrued but unpaid interest) computed using a
discount rate equal to the Treasury Rate on such redemption date plus 50 basis
points; over

 

(b)           the principal amount
of such Note.

 

“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, 2007; provided, however, that if the period from
the redemption date to May 15, 2007
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.

 

18

 

Section 3.08         Mandatory
Redemption.

 

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

 

Section 2.04.        Amendments to Article 4.

 

Section 4 of the Indenture is hereby amended
by adding, immediately following Section 4.08 thereof, the following new
Sections 4.09 through 4.21 for the benefit of the Notes:

 

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
4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18 and 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 

 

19

 

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.

 

For purposes of this Indenture, the Notes and the Guarantees of the
Notes, so long as the Credit Agreement is in effect, the Notes shall be
considered equally and ratably secured if they are secured pursuant to terms
and provisions, including any exclusions or exceptions described therein, no
less favorable to the holders of Notes than those set forth in, or contemplated
by, the Credit Agreement.

 

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 $1,000 or an integral multiple 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 Liquidated Damages, 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 at
least 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
of 

 

20

 

$1,000 or whole
multiples of $1,000, 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 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 $1,000 or an integral multiple 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.

 

21

 

Section
4.11         Asset Sales.

 

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

 

(1)                                  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;

 

(2)                                  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

 

(3)                                  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 therefore
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.

 

22

 

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 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 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.

 

Notwithstanding
the foregoing, with respect to any Asset Sale by the Company or any Guarantor,
such Net Proceeds may only be applied pursuant to items (1) or
(6) above and, to the extent such Net Proceeds are applied to, or with
respect to, the Company, a Guarantor or a Person or a Restricted Subsidiary
that becomes a Guarantor, items (3), (4) or (5) above. 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 

 

23

 

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 and the 8 1/4% Senior Notes due 2013 offered
concurrently herewith) 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 Liquidated Damages, 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 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;

 

24

 

(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

 

(4)                                  make
any Restricted Investment (all such payments and other actions set forth in
clauses (1) through (4) above 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 January
24, 2002 (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, 2002 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 January 24, 2002 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 

 

25

 

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 January 24, 2002
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.

 

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 

 

26

 

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.
outstanding on January 24, 2002, plus dividends on any subsequently issued
shares of preferred stock of OI Inc. 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.

 

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, with respect to (collectively, “incur”) 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 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 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 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 $1.41 billion of such Indebtedness shall be incurred by
Restricted Subsidiaries that are not Guarantors);

 

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

 

27

 

(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 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 $300.0 million aggregate principal amount of 7.85% Senior
Notes due 2004, the $350.0 million aggregate principal amount of 7.15%
Senior Notes due 2005, the $300.0 million aggregate principal amount of
8.10% Senior Notes due 2007, the $250.0 million aggregate principal amount
of 7.35% Senior Notes due 2008 and the $250.0 million aggregate principal
amount of 7.50% Senior Debentures due 2010, in each case of OI Inc.;

 

(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 

 

28

 

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;

 

(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 $1.41 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;

 

29

 

(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;

 

(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

 

30

 

(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
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 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;

 

31

 

(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.

 

For purposes
of this Indenture, the Notes and the Guarantees of the Notes, so long as the
Credit Agreement is in effect, the Notes shall be considered equally and
ratably secured if they are secured pursuant to terms and provisions, including
any exclusions or exceptions described therein, no less favorable to the
holders of Notes than those set forth in, or contemplated by, the Credit
Agreement.

 

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

 

32

 

(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;

 

(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 

 

33

 

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:

 

(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;

 

34

 

(5)                                  the
payment of customary annual management, consulting, monitoring and advisory
fees and related expenses to KKR and its Affiliates;

 

(6)                                  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;

 

(7)                                  payments
by OI Group or any of its Restricted Subsidiaries to KKR and its
Affiliates for any financial advisory, financing, underwriting or placement
services or in respect of other investment banking activities, including,
without limitation, in connection with acquisitions or divestitures which
payments are approved by a majority of the Board of Directors of OI Group
in good faith;

 

(8)                                  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;

 

(9)                                  in
addition to any payments referred to in (6) 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;

 

(10)                            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;

 

(11)                            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;

 

(12)                            the
issuance of Equity Interests (other than Disqualified Stock) of OI Group
or the Company to any of the Principals; and

 

(13)                            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.

 

35

 

Section 4.17.        Additional
Pledges.

 

If on or after the Issue Date, any Domestic Subsidiary of OI Group
pledges any property or assets to secure obligations under the Credit Agreement
(other than pursuant to the Collateral Documents or as contemplated by the
Credit Agreement), then such property or assets shall also secure the Notes.

 

Section 4.18.        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 4.19.        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 4.20.        Negative Pledge.

 

Except as contemplated by and permitted by the Credit Agreement and the
Collateral Documents, OI Group shall not permit any of the issued and
outstanding shares of any class of Capital Stock of OI General FTS or any
part of the Intercompany Indebtedness owed by OI General FTS to
OI Group to be pledged, in each of the foregoing cases as security or
otherwise unless the Notes and Guarantees of the Notes are secured by this
collateral on a pari passu basis with the applicable Indebtedness.

 

36

 

Section 4.21.        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.

 

Section 2.05.        Amendments to Article 5.

 

Article 5 of the Indenture is hereby amended by deleting Section 5.01 and
Section 5.02 in their entirety and replacing them with the following Section
5.01, Section 5.02 and Section 5.03:

 

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 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, the Collateral Documents
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 

 

37

 

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
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 July 2, 2003, 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, will 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
accordance with the terms of the Credit Agreement.  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.

 

Section 2.06.        Amendments to Article 6.

 

Article 6 of the Indenture is hereby amended
by deleting Section 6.01 in its entirety and replacing it with the following
Section 6.01:

 

38

 

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 Liquidated Damages, 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 in this Indenture, the Notes,
the Guarantees of the Notes (with respect to
any Guarantor) and the Collateral Documents (with respect to any Restricted
Subsidiary which has pledged assets or property to secure its obligations under
this Indenture and the Notes);

 

(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;

 

39

 

(6)                                  except
as permitted by this Indenture or the Collateral Documents, 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 the order or decree
remains unstayed and in effect for 60 days;

 

(9)                                  except as permitted by the Collateral Documents,
any amendments thereto and the provisions of the Indenture, any of the
Collateral Documents ceases to be in full force and effect or ceases to be
effective, in all material respects, to create the Lien purported to be created
in the Collateral in favor of the holders of the Notes for 60 days after
notice; and

 

(10)                            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.

 

40

 

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 of the Indenture,
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 2.07.        Amendments to Article 8.

 

(a)           Section
8.03 of the Indenture is hereby amended by deleting the words “date of
execution of this Indenture” in clause (d)(2)(b) and adding the words “Issue
Date” in replacement thereof.

 

Section 2.08.        Amendments
to Article 9.

 

Section 9.02 of the Indenture is hereby amended by deleting the word
“or” at the end of clause (11) and adding, immediately following clause (12),
the following new clauses (13) and (14):

 

(13)                            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

 

(14)                            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.

 

Section 2.09.        Amendments to Article 10.

 

(a)           Section
10.10 of the Indenture is hereby amended by deleting such Section 10.10 in its
entirety and replacing it with the following Section 10.10:

 

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 

 

41

 

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 the 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 Securities 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.

 

(b)           Section 10.11 of the Indenture is hereby amended by
deleting such Section 10.11 in its entirety and replacing it with the following
Section 10.11:

 

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

 

(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, the
Collateral Documents and 

 

42

 

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.

 

Section 2.10.        Amendment to Article 11.

 

Section 11.03 of the Indenture is hereby
amended by deleting the first sentence of the final paragraph of such Section
11.03.

 

Section 2.11.        Other Provisions Unchanged.

 

All provisions of the Indenture, other than
as set forth in Sections 2.01 to 2.10, inclusive, of this Fourth Supplemental
Indenture shall be unchanged by this Fourth Supplemental Indenture and shall
remain in full force and effect.  The
Indenture, as supplemented and amended by this Fourth Supplemental Indenture,
is in all respects ratified and confirmed, and the Indenture and this Fourth
Supplemental Indenture shall be read, taken and construed as one and the same
instrument.

 

ARTICLE 3.

 

MISCELLANEOUS

 

Section 3.01.        Defined Terms.

 

Unless otherwise provided in this Fourth Supplemental
Indenture, all defined terms used in this Fourth Supplemental Indenture shall
have the meanings assigned to them in the Indenture.

 

Section 3.02.        Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939.

 

If and to the extent that any provision of this Fourth
Supplemental Indenture limits,
qualifies or conflicts with another provision included in this Fourth Supplemental Indenture or in the Indenture
which is required to be included herein or therein by any of Sections 310 to
317, inclusive, of the Trust Indenture Act of 1939, such required provision
shall control.

 

43

 

Section 3.03.        New York Law to Govern.

 

THIS FOURTH SUPPLEMENTAL INDENTURE AND
THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

 

Section 3.04.        Counterparts.

 

This Fourth
Supplemental Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.

 

Section 3.05.        Effect of Headings.

 

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

 

Section 3.06.        Severability of Provisions.

 

In case any provision in this Fourth Supplemental 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 3.07.        Successors and Assigns.

 

All covenants and agreements in this Fourth Supplemental Indenture by the parties hereto
shall bind their respective successors and assigns and inure to the benefit of
their respective successors and assigns, whether so expressed or not.

 

Section 3.08.        Benefit of Supplemental Indenture.

 

Nothing in this Fourth Supplemental Indenture, express or implied, shall give to any Person,
other than the parties hereto, any Registrar, any Paying Agent and their
successors hereunder, and the Holders of the Notes, any benefit or any legal or
equitable right, remedy or claim under this Fourth Supplemental Indenture.

 

44

 

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

 

	
   

  	
  OWENS-BROCKWAY GLASS CONTAINER

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ James W. Baehren

  	
   

  
	
   

  	
   

  	
  Name:  James W. Baehren

  
	
   

  	
   

  	
  Title:  Vice President and
  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:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank P. Leslie

  	
   

  
	
   

  	
   Name:  Frank P. Leslie

  
	
   

  	
   Title:  Vice President

  
					

 

45

 

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

  
	
  Brockway
  Research, Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Continental
  PET Technologies, Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  NHW Auburn, LLC

  	
   

  	
  Vice President and Secretary of its sole
  member

  
	
  OB Cal South
  Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI AID STS
  Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Auburn
  Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Australia
  Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Brazil
  Closure Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI
  California Containers Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Castalia STS Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Consol
  STS Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Ecuador
  STS Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Europe
  & Asia Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI General
  Finance Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI General
  FTS Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  O-I Health
  Care Holding Corp.

  	
   

  	
  Vice
  President and Secretary

  
	
  O-I Holding
  Company, Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Hungary
  Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI
  International Holdings Inc.

  	
   

  	
  Vice
  President and Secretary

  

 

ANNEX A-1

 

	
  Name of Entity

  	
   

  	
  Title of
  Officer Executing

  on Behalf of Such Entity

  
	
  OI Levis
  Park STS Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Medical
  Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Peru STS
  Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Plastic
  Products FTS Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Poland
  Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Puerto
  Rico STS Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI
  Regioplast STS Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Venezuela
  Plastic Products Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OIB
  Produvisa Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Overseas
  Finance Company

  	
   

  	
  Vice
  President and Secretary

  
	
  Owens-Brockway
  Glass Container Trading Company

  	
   

  	
  Vice
  President and Secretary

  
	
  Owens-Brockway
  Packaging, Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Owens-Brockway
  Plastic Products Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Owens-Illinois
  Closure Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Owens-Illinois
  General Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Owens-Illinois
  Group, Inc.

  	
   

  	
  Vice
  President, Director of Finance and Secretary

  
	
  Owens-Illinois
  Prescription Products Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Owens-Illinois
  Specialty Products Puerto Rico, Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Product
  Design & Engineering, Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Seagate,
  Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Seagate II,
  Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Seagate III,
  Inc.

  	
   

  	
  Vice
  President and Secretary

  

 

ANNEX A-2

 

	
  Name of Entity

  	
   

  	
  Title of
  Officer Executing

  on Behalf of Such Entity

  
	
  Specialty
  Packaging Licensing Company

  	
   

  	
  Vice
  President and Secretary

  
	
  Universal
  Materials, Inc.

  	
   

  	
  Vice
  President and Secretary

  

 

ANNEX A-3

 

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]

 

OWENS-BROCKWAY GLASS CONTAINER INC.

7 3/4% SENIOR SECURED NOTES DUE 2011

 

	
  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, 2011.

 

Interest Payment Dates:  May 15
and November 15, commencing November 15, 2003.

 

Record Dates:  May 1 and November 1.

 

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 6, 2003

 

 

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.

71⁄4% SENIOR SECURED NOTES DUE 2011

 

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 Liquidated Damages payable pursuant to Section 5 of the Registration
Rights Agreement.  Interest on this Note
shall accrue from May 6, 2003 or from the most recent interest payment date to
which interest has been paid or provided for, as the case may be; interest and
Liquidated Damages on this Note shall be payable semi-annually on May 15 and November 15 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 November 15, 2003; and interest
on this Note shall be payable to holders of record on the May 1 or
November 1 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 Liquidated
Damages 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 May 1 or November 1
(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 Liquidated Damages 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 Liquidated
Damages, 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 Liquidated Damages,
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 Liquidated Damages, 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 January 24, 2002 among the Company, the Guarantors and
the Trustee, the terms of which have been established in the Fourth Supplemental
Indenture among the Company, the Guarantors and the Trustee, dated as of May 6,
2003 (collectively, the “Indenture”),
pursuant to Section 2.01 of the Indenture. 
This Note is a series designated as the “7 3/4% Senior Secured
Notes due 2011” 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.

 

This Note is secured to the extent set forth
in the Collateral Documents and Article 11 of the Indenture.

 

5.             Optional Redemption

 

Except as described below, this Note shall
not be redeemable at the Company’s option prior to May 15, 2007.

 

On or after May 15,
2007, the Company may redeem all or a part of this Note upon not less than 30
nor more than 60 days’ notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages, if any, thereon, to the applicable redemption
date, if redeemed during the twelve-month period beginning on May 15 of the years indicated below:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2007

  	
   

  	
  103.875

  	
  %

  
	
  2008

  	
   

  	
  102.583

  	
  %

  
	
  2009

  	
   

  	
  101.292

  	
  %

  
	
  2010 and
  thereafter

  	
   

  	
  100.00

  	
  %

  

 

At any time prior to May 15, 2006, the Company may redeem on any one or more
occasions up to 35% of the aggregate principal amount of Notes (calculated
after giving effect to any issuance of Additional Securities) issued under the
Indenture at a redemption price of 107.750% of the principal amount thereof,
plus accrued and unpaid interest and Liquidated 

 

D1-4

 

Damages, 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 65% of the aggregate principal amount of Notes
(calculated after giving effect to any issuance of Additional Securities)
issued under the Indenture remains outstanding immediately after the occurrence
of such redemption (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.

 

In addition, at any time prior
to May 15, 2007, this
Note may also be redeemed, in whole but not in part, at the option of the
Company upon the occurrence of a Change of Control, upon not less than 30 nor more than 60 days’ prior notice (but
in no event more than 90 days after the occurrence of such Change of
Control) mailed by first-class mail to each Holder’s registered address,
at a redemption price equal to 100% of the principal amount of this Note plus
the Applicable Premium as of, and accrued and unpaid interest and Liquidated
Damages, 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 Note on the
relevant Interest Payment Date).

 

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 $1,000 or an integral multiple 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 this Note 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 and the 8 1/4% Senior Notes
due 2013) to purchase the maximum principal amount of this Note 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 30 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 $1,000 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 

 

D1-5

 

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 $1,000 of principal amount and any integral
multiple 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 Liquidated Damages, 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 in the Indenture, the Notes, the Guarantees of the Notes (with respect to any Guarantor) and the
Collateral Documents (with respect to any Restricted Subsidiary which has
pledged assets or property to secure its obligations under the Indenture and
the Notes); (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

 

D1-6

 

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 or the Collateral Documents, 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; (9) except as permitted by the Collateral Documents, any
amendments thereto and the provisions of the Indenture, any of the Collateral
Documents ceases to be in full force and effect or ceases to be effective, in
all material respects, to create the Lien purported to be created in the
Collateral in favor of the Holders of the Notes for 60 days after notice;
and (10) 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.  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 interest that has become due solely because
of the acceleration.

 

D1-7

 

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. 
Amendments to the Collateral Documents shall be made in accordance with
their terms.

 

15.           Trustee Dealings with the Company

 

The Trustee, in its individual or any other
capacity, may become the owner or pledgee of Securities 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, the Guarantees of the Notes, the Registration Rights Agreement, the
Collateral Documents 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.

 

D1-8

 

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.

  
	
   

  	
  One SeaGate

  
	
   

  	
  Toledo, Ohio  43666

  
	
   

  	
  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
Regulation S Temporary Global Security Legend]

 

OWENS-BROCKWAY GLASS CONTAINER INC.

 

7 3/4% SENIOR SECURED NOTES DUE 2011

 

	
  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, 2011.

 

Interest Payment Dates:  May 15
and November 15, commencing November 15, 2003.

 

Record Dates:  May 1 and November 1.

 

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 6, 2003

 

 

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.

 

7 3/4% SENIOR SECURED NOTES DUE 2011

 

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 Liquidated Damages payable pursuant to Section 5 of the Registration
Rights Agreement.  Interest on this Note
shall accrue from May 6, 2003 or from the most recent interest payment
date to which interest has been paid or provided for, as the case may be;
interest and Liquidated Damages on this Note shall be payable semi-annually on
May 15 and November 15 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
November 15, 2003; and interest on this Note shall be payable to holders
of record on the May 1 or November 1 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 Liquidated
Damages 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 May 1
or November 1 (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 Liquidated Damages
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 Liquidated Damages, 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 Liquidated Damages, 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 Liquidated 

 

D2-3

 

Damages, 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.

 

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 January 24, 2002 among the Company, the Guarantors and
the Trustee, the terms of which have been established in the Fourth
Supplemental Indenture among the Company, the Guarantors and the Trustee, dated
as of May 6, 2003 (collectively, the “Indenture”),
pursuant to Section 2.01 of the Indenture. 
This Note is a series designated as the “7 3/4% Senior Secured
Notes due 2011” 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.

 

This Note is secured to the extent set forth
in the Collateral Documents and Article 11 of the Indenture.

 

5.             Optional Redemption

 

Except as described below, this Note shall
not be redeemable at the Company’s option prior to May 15, 2007.

 

On or after May 15,
2007, the Company may redeem all or a part of this Note upon not less
than 30 nor more than 60 days’ notice, at the redemption prices (expressed
as percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages, if any, thereon, to the applicable redemption
date, if redeemed during the twelve-month period beginning on May 15 of the years indicated below:

 

D2-4

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2007

  	
   

  	
  103.875

  	
  %

  
	
  2008

  	
   

  	
  102.583

  	
  %

  
	
  2009

  	
   

  	
  101.292

  	
  %

  
	
  2010 and
  thereafter

  	
   

  	
  100.000

  	
  %

  

 

At any time prior to May 15, 2006, the
Company may redeem on any one or more occasions up to 35% of the aggregate
principal amount of Notes (calculated after giving effect to any issuance of
Additional Securities) issued under the Indenture at a redemption price of
107.750% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, 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 65% of the aggregate principal amount of Notes (calculated after
giving effect to any issuance of Additional Securities) issued under the
Indenture remains outstanding immediately after the occurrence of such
redemption (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.

 

In addition, at any time prior
to May 15, 2007, this
Note may also be redeemed, in whole but not in part, at the option of the
Company upon the occurrence of a Change of Control, upon not less than 30 nor
more than 60 days’ prior notice (but in no event more than 90 days
after the occurrence of such Change of Control) mailed by first-class
mail to each Holder’s registered address, at a redemption price equal to 100%
of the principal amount of this Note plus the Applicable Premium as of, and
accrued and unpaid interest and Liquidated Damages, 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 Note on the relevant Interest Payment Date).

 

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 $1,000 or an integral multiple 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 this Note 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 

 

D2-5

 

(including the Existing Senior Notes and the 8 1/4%
Senior Notes due 2013) to purchase the maximum principal amount of this Note
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 30 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 $1,000 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.

 

9.             Denominations; Transfer; Exchange

 

The Note is in registered form, without
coupons, in denominations of $1,000 of principal amount and any integral
multiple 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.

 

D2-6

 

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 Liquidated Damages, 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 in the Indenture, the Notes, the Guarantees of the Notes (with respect to any Guarantor) and the
Collateral Documents (with respect to any Restricted Subsidiary which has
pledged assets or property to secure its obligations under the Indenture and
the Notes); (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 or the Collateral Documents, 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, 

 

D2-7

 

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; (9) except
as permitted by the Collateral Documents, any amendments thereto and the
provisions of the Indenture, any of the Collateral Documents ceases to be in
full force and effect or ceases to be effective, in all material respects, to
create the Lien purported to be created in the Collateral in favor of the
Holders of the Notes for 60 days after notice; and (10) 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.  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 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.  Amendments to the Collateral Documents shall
be made in accordance with their terms.

 

D2-8

 

15.           Trustee Dealings
with the Company

 

The Trustee, in its individual or any other
capacity, may become the owner or pledgee of Securities 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, the Guarantees of the Notes, the Registration Rights Agreement, the
Collateral Documents 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.

 

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.

 

D2-9

 

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.

  
	
   

  	
  One SeaGate

  
	
   

  	
  Toledo, Ohio  43666

  
	
   

  	
  Attention:  Investor Relations

  
	
   

  	
   

  

 

D2-10

 

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

  	
   

  
						

 

D2-11

 

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

  	
   

  
							

 

D2-12

 

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.

 

D2-13Exhibit 4.3

 

EXECUTION COPY

 

 

OWENS-BROCKWAY GLASS CONTAINER INC.

 

Issuer

 

and

 

The Guarantors set forth in Annex A attached
hereto

 

 

INDENTURE

 

dated as of May 6, 2003

 

 

U.S. Bank National Association

 

Trustee

 

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE
  1. DEFINITIONS AND INCORPORATION BY REFERENCE

  
	
   

  
	
  Section 1.01.

  	
  Certain Definitions

  
	
  Section 1.02.

  	
  Other Definitions

  
	
  Section 1.03.

  	
  Incorporation by Reference of Trust
  Indenture Act

  
	
  Section 1.04.

  	
  Rules of Construction

  
	
   

  	
   

  
	
  ARTICLE
  2. THE SECURITIES

  
	
   

  
	
  Section 2.01.

  	
  Unlimited in Amount, Form and Dating

  
	
  Section 2.02.

  	
  Execution and Authentication

  
	
  Section 2.03.

  	
  Registrar and Paying Agent

  
	
  Section 2.04.

  	
  Paying Agent to Hold Money in Trust

  
	
  Section 2.05.

  	
  Holder Lists

  
	
  Section 2.06.

  	
  Transfer and Exchange

  
	
  Section 2.07.

  	
  Replacement Notes

  
	
  Section 2.08.

  	
  Outstanding Notes

  
	
  Section 2.09.

  	
  Temporary Notes

  
	
  Section 2.10.

  	
  Cancellation

  
	
  Section 2.11.

  	
  Defaulted Interest

  
	
  Section 2.12.

  	
  Special Record Dates

  
	
  Section 2.13.

  	
  CUSIP and ISIN Numbers

  
	
   

  	
   

  
	
  ARTICLE
  3. REDEMPTION

  
	
   

  
	
  Section 3.01.

  	
  Notices to Trustee

  
	
  Section 3.02.

  	
  Selection of Notes to Be Redeemed

  
	
  Section 3.03.

  	
  Notice of Redemption

  
	
  Section 3.04.

  	
  Effect of Notice of Redemption

  
	
  Section 3.05.

  	
  Deposit of Redemption Price

  
	
  Section 3.06.

  	
  Notes Redeemed in Part

  
	
  Section 3.07.

  	
  Optional Redemption

  
	
  Section 3.08.

  	
  Mandatory Redemption

  
	
   

  	
   

  
	
  ARTICLE
  4. COVENANTS

  
	
   

  
	
  Section 4.01.

  	
  Payment of Securities

  
	
  Section 4.02.

  	
  Maintenance of Office or Agency

  
	
  Section 4.03.

  	
  Commission Reports

  
	
  Section 4.04.

  	
  Compliance Certificate

  
	
  Section 4.05.

  	
  Taxes

  
	
  Section 4.06.

  	
  Stay, Extension and Usury Laws

  
	
  Section 4.07.

  	
  Corporate Existence

  
	
  Section 4.08.

  	
  [Intentionally Omitted]

  
	
  Section 4.09.

  	
  Fall-Away Event

  
	
  Section 4.10.

  	
  Offer to Repurchase Upon a Change of
  Control

  

 

i

 

	
  Section 4.11.

  	
  Asset Sales

  
	
  Section 4.12.

  	
  Restricted Payments

  
	
  Section 4.13.

  	
  Incurrence of Indebtedness and Issuance of
  Preferred Stock

  
	
  Section 4.14.

  	
  Liens

  
	
  Section 4.15.

  	
  Dividend and Other Payment Restrictions
  Affecting Restricted Subsidiaries

  
	
  Section 4.16.

  	
  Transactions with Affiliates

  
	
  Section 4.17.

  	
  Payments for Consent

  
	
  Section 4.18.

  	
  Designation of Restricted and Unrestricted
  Subsidiaries

  
	
  Section 4.19.

  	
  Limitations on Issuances of Guarantees of
  Indebtedness

  
	
   

  	
   

  
	
  ARTICLE
  5. SUCCESSORS

  
	
   

  
	
  Section 5.01.

  	
  When OI Group May Merge, Etc.

  
	
  Section 5.02.

  	
  Successor Corporation Substituted

  
	
  Section 5.03.

  	
  Assignment of Obligations

  
	
   

  	
   

  
	
  ARTICLE
  6. DEFAULTS AND REMEDIES

  
	
   

  
	
  Section 6.01.

  	
  Events of Default

  
	
  Section 6.02.

  	
  Acceleration

  
	
  Section 6.03.

  	
  Other Remedies

  
	
  Section 6.04.

  	
  Waiver of Past Defaults

  
	
  Section 6.05.

  	
  Control by Majority

  
	
  Section 6.06.

  	
  Limitation on Suits

  
	
  Section 6.07.

  	
  Rights of Holders to Receive Payment

  
	
  Section 6.08.

  	
  Collection Suit by Trustee

  
	
  Section 6.09.

  	
  Trustee May File Proofs of Claim

  
	
  Section 6.10.

  	
  Priorities

  
	
  Section 6.11.

  	
  Undertaking for Costs

  
	
   

  	
   

  
	
  ARTICLE
  7. TRUSTEE

  
	
   

  
	
  Section 7.01.

  	
  Duties of Trustee

  
	
  Section 7.02.

  	
  Rights of Trustee

  
	
  Section 7.03.

  	
  Individual Rights of Trustee

  
	
  Section 7.04.

  	
  Trustee’s Disclaimer

  
	
  Section 7.05.

  	
  Notice of Defaults

  
	
  Section 7.06.

  	
  Reports by Trustee to Holders

  
	
  Section 7.07.

  	
  Compensation and Indemnity

  
	
  Section 7.08.

  	
  Replacement of Trustee

  
	
  Section 7.09.

  	
  Successor Trustee by Merger, Etc.

  
	
  Section 7.10.

  	
  Eligibility; Disqualification

  
	
  Section 7.11.

  	
  Preferential Collection of Claims Against
  Company

  
	
   

  	
   

  
	
  ARTICLE
  8. SATISFACTION AND DISCHARGE; DEFEASANCE

  
	
   

  
	
  Section 8.01.

  	
  Satisfaction and Discharge of Indenture

  
	
  Section 8.02.

  	
  Application of Trust Funds; Indemnification

  

 

ii

 

	
  Section 8.03.

  	
  Legal Defeasance of Notes

  
	
  Section 8.04.

  	
  Covenant Defeasance

  
	
  Section 8.05.

  	
  Repayment to Company

  
	
   

  	
   

  
	
  ARTICLE
  9. SUPPLEMENTS, AMENDMENTS AND WAIVERS

  
	
   

  
	
  Section 9.01.

  	
  Without Consent of Holders

  
	
  Section 9.02.

  	
  With Consent of Holders

  
	
  Section 9.03.

  	
  Revocation and Effect of Consents

  
	
  Section 9.04.

  	
  Notation on or Exchange of Notes

  
	
  Section 9.05.

  	
  Trustee to Sign Amendments, Etc.

  
	
   

  	
   

  
	
  ARTICLE
  10. GUARANTEE

  
	
   

  
	
  Section 10.01.

  	
  Guarantee

  
	
  Section 10.02.

  	
  Limitation on Liability

  
	
  Section 10.03.

  	
  Execution and Delivery of Guarantee

  
	
  Section 10.04.

  	
  Successors and Assigns

  
	
  Section 10.05.

  	
  No Waiver

  
	
  Section 10.06.

  	
  Right of Contribution

  
	
  Section 10.07.

  	
  No Subrogation

  
	
  Section 10.08.

  	
  Additional Guarantors; Reinstatement of
  Guarantees

  
	
  Section 10.09.

  	
  Modification

  
	
  Section 10.10.

  	
  Release of Guarantor

  
	
  Section 10.11.

  	
  Merger, Consolidation and Sale of Assets of
  a Guarantor

  
	
   

  	
   

  
	
  ARTICLE
  11. MISCELLANEOUS

  
	
   

  
	
  Section 11.01.

  	
  Indenture Subject to Trust Indenture Act

  
	
  Section 11.02.

  	
  Notices

  
	
  Section 11.03.

  	
  Communication by Holders with Other Holders

  
	
  Section 11.04.

  	
  Certificate and Opinion as to Conditions
  Precedent

  
	
  Section 11.05.

  	
  Statements Required in Certificate or
  Opinion

  
	
  Section 11.06.

  	
  Rules by Trustee and Agents

  
	
  Section 11.07.

  	
  Legal Holidays

  
	
  Section 11.08.

  	
  No Recourse Against Others

  
	
  Section 11.09.

  	
  Counterparts

  
	
  Section 11.10.

  	
  Governing Law

  
	
  Section 11.11.

  	
  Severability

  
	
  Section 11.12.

  	
  Effect of Headings, Table of Contents, Etc.

  
	
  Section 11.13.

  	
  Successors and Assigns

  
	
  Section 11.14.

  	
  No Interpretation of Other Agreements

  
			

 

iii

 

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.

 

iv

 

INDENTURE dated as of May 6,
2003 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 8 1/4%
Senior Notes due 2013 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 and the Private Placement 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.

 

“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 this Indenture or 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
the 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.

 

“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

 

2

 

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), other than the Principals and their Related Parties, 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 Company
consolidates with, or merges with or into, any Person, or any Person
consolidates with, or merges with or into the Company, in any such event
pursuant to a transaction in which any of the outstanding Voting Stock of the
Company or such other Person is converted into or exchanged for cash, securities
or other property, other than any such transaction where (A) the Voting Stock
of the Company outstanding immediately prior to such transaction is converted
into or exchanged for Voting Stock (other than Disqualified Stock) of the
surviving or transferee Person constituting a majority of the outstanding
shares of such Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance) and (B) immediately after such
transaction, no “person” or “group” (as such terms are used in Section 13(d)
and 14(d) of the Exchange Act), other than the Principals and their Related
Parties, becomes, directly or indirectly, the beneficial owner (as defined
above) of 35% or more

 

3

 

of the voting
power of all classes of Voting Stock of the Company; or (4) 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.

 

“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

 

4

 

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 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.

 

5

 

“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, 180 East
Fifth Street, St. Paul, MN 55101, 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.

 

“Credit Agreement”
means that certain Secured Credit Agreement, dated as of April 23, 2001,
by and among the Borrowers named therein, OI Group and Owens-Illinois
General, Inc., as Borrower’s Agent, Deutsche Bank Securities Inc., formerly
Deutsche Banc Alex. Brown, and Banc of America Securities LLC, as Joint Lead
Arrangers and Joint Book Managers, Deutsche Bank AG, London Branch, as UK
Administrative Agent, Deutsche Bank Trust Company Americas, formerly Bankers
Trust Company, as Administrative Agent, and the other Agents and the other
Lenders named therein, 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, OI General
FTS Inc. and OI Plastic Products FTS Inc., to the extent at the time of
determination such entity 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 (collectively, “Bank Facilities”);
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 Security” attached
thereto.

 

6

 

“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 an officer 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 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.

 

7

 

“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
(including the 7 3/4% Senior Secured Notes due 2011 offered concurrently herewith
and the related Guarantees to be issued on the Issue Date and the exchange
notes and the related Guarantees to be issued as contemplated by the
registration rights agreement executed with respect thereto), until such
amounts are repaid or terminated.

 

“Existing
IRBs” means the Holmes County Ohio 5.85% Industrial
Revenue Bonds due 2007, the Kansas City, Missouri Industrial Development
Revenue Bonds due 2008 and the City of Mentor, Ohio Industrial Development
Bonds due 2004, and any extensions, renewals or refinancings thereof to the
extent that such extensions, renewals and refinancings thereof do not result in
an increase in the aggregate principal amount of such Existing IRBs.

 

“Existing
Senior Notes” means the Company’s 8 7/8% Senior
Secured Notes due 2009 and its 8 3/4% Senior Secured Notes due 2012.

 

“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 

 

8

 

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, 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.

 

9

 

“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.

 

“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

 

10

 

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.

 

“Initial
Securities” means Notes issued pursuant to Section
2.02 hereof, in each case for so long as such securities constitute “restricted
securities” as such term is defined in Rule 144(a)(3) under the Securities Act;
provided that the Trustee shall
be entitled to request and conclusively rely on an Opinion of Counsel with
respect to whether any Note constitutes such a restricted security.

 

“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 intercreditor agreement, dated as of April 23, 2001, by and
among Deutsche Bank Trust Company Americas, formerly Bankers Trust Company, as
administrative agent for the lenders party to the Credit Agreement, Deutsche
Bank Trust Company Americas, formerly Bankers Trust Company, 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 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

 

11

 

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’ 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

 

12

 

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
the date on which the Notes are originally issued.

 

“KKR”
means Kohlberg Kravis Roberts & Co., L.P., a Delaware limited partnership.

 

“Letter of
Transmittal” means the letter of transmittal to be
prepared by the Company and sent to all Holders of Notes for use by such
Holders in connection with an Exchange Offer for such Notes.

 

“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.

 

“Liquidated
Damages” means the payment of liquidated damages as set
forth in the Registration Rights Agreement.

 

“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.

 

“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-

 

13

 

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.

 

“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 the Company.

 

“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
the Company.

 

“Offshore
Collateral Documents” means the Offshore Security
Agreements and mortgages (as defined in the Credit Agreement) securing real
property 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

 

14

 

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 $300.0 million aggregate principal
amount of 7.85% Senior Notes due 2004, $350.0 million aggregate principal
amount of 7.15% Senior Notes due 2005, $300.0 million aggregate principal
amount of 8.10% Senior Notes due 2007, $250.0 million aggregate principal
amount of 7.35% Senior Notes due 2008, $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.

 

“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 or the
Trustee.

 

“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, 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

 

15

 

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 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, 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 of the $300.0 million
aggregate principal amount of 7.85% Senior Notes due 2004, the $350.0 million
aggregate principal amount of 7.15% Senior Notes due 2005 of OI Inc., the
$300.0 million aggregate principal amount of 8.10% Senior Notes due 2007, the
$250.0 million aggregate principal amount of 7.35% Senior Notes due 2008 and
the $250.0 million aggregate principal amount of 7.50% Senior Debentures due
2010, and the Existing IRBs and up to an additional $50.0 million of IRB
financing.

 

16

 

“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 Pledge Agreement, dated as of April 23,
2001, by and among OI Group, OI Packaging, and Deutsche Bank Trust Company
Americas, formerly Bankers Trust Company, 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.

 

“Principals”
means KKR and its Affiliates.

 

“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 6, 2003, among
the Company, the Guarantors named therein and the Initial Purchasers

 

17

 

(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 Permanent Global Security”
means a permanent Global Security bearing the Global Security Legend and the
Private Placement 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 and the Regulation S Temporary Global
Security 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.

 

“Related
Party” means: (1) any controlling stockholder,
partner, member, 80% (or more) owned Subsidiary, or immediate family member (in
the case of an individual) of any of the Principals; or (2) any trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of any one or more Principals and/or such other Persons
referred to in the immediately preceding clause (1).

 

“Restricted
Definitive Security” means a Definitive Security
bearing the Private Placement Legend.

 

“Restricted
Global Security” means a Global Security bearing the
Private Placement 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.

 

18

 

“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 Security Agreement, dated as of April 23,
2001, 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, formerly
Bankers Trust Company, 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 January 24, 2002.

 

“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 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.

 

19

 

“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 Security” 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 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 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.

 

20

 

“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

  	
   

  

 

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.

 

21

 

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.

 

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

 

22

 

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.

 

TemporaryGlobal 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, 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.

 

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.

 

23

 

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.

 

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

 

24

 

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 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

 

25

 

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 instructions contained in the Letter of
Transmittal delivered by the holder of such beneficial interests in the
Restricted Global Securities.  Upon
satisfaction of all of the requirements for transfer or exchange of beneficial interests
in Global Securities 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,

 

26

 

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 in the
applicable Letter of Transmittal 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

 

(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,

 

27

 

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;

 

(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

 

28

 

(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 in the applicable Letter of Transmittal 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 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

 

29

 

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 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

 

30

 

(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, certificates and Opinion of Counsel required by
item (3)(d) thereof, if applicable.

 

(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 in the applicable Letter of Transmittal 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

 

(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

 

31

 

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:

 

THIS
SECURITY AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY, 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 SECURITY
AND THE GUARANTEES ENDORSED HEREON, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS
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 SECURITY AND
THE GUARANTEES ENDORSED HEREON (OR ANY PREDECESSOR OF THIS SECURITY 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

 

32

 

REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES 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 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 SECURITY
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL
BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.

 

BY
ACCEPTANCE OF THIS SECURITY, EACH HOLDER HEREOF WILL BE DEEMED TO HAVE
REPRESENTED AND WARRANTED THAT EITHER (A) NO PORTION OF THE ASSETS USED BY
SUCH HOLDER TO ACQUIRE THE SECURITY CONSTITUTES ASSETS OF ANY EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED (“ERISA”), A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE “CODE”), ANY OTHER PLAN OR ARRANGEMENT THAT IS SUBJECT
TO ANY FEDERAL, STATE, LOCAL, NON-UNITED STATES OR OTHER LAWS OR REGULATIONS
THAT ARE SIMILAR TO THE PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR AN
ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF SUCH
PLANS AND ARRANGEMENTS OR (B) THE PURCHASE AND HOLDING OF THE SECURITY
WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE OR VIOLATION UNDER ANY APPLICABLE SIMILAR
LAWS.

 

(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.

 

33

 

(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.”

 

(iii)          Regulation S Temporary Global Security Legend.  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.”

 

(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 

 

34

 

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.

 

(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

 

35

 

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 Security” 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.

 

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

 

36

 

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.

 

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

 

37

 

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.

 

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

 

38

 

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; 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 more than $1,000. 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 30 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 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

 

39

 

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 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.

 

40

 

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.

 

Except as described in this
Section 3.07, the Notes shall not be redeemable at the Company’s option prior
to May 15, 2008.

 

(a)           On or after May 15, 2008, the Company may redeem all or a
part of the Notes upon not less than 30 nor more than 60 days’ notice, at the
redemption prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest and Liquidated Damages, if any, thereon,
to the applicable redemption date, if redeemed during the twelve-month period
beginning on May 15 of the years indicated below: 

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2008

  	
   

  	
  104.125

  	
  %

  
	
  2009

  	
   

  	
  102.750

  	
  %

  
	
  2010

  	
   

  	
  101.375

  	
  %

  
	
  2011 and
  thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)           At any time prior to May 15, 2006, the Company may redeem
on any one or more occasions up to 35% of the aggregate principal amount of
Notes (calculated after giving effect to any issuance of Additional Securities)
issued under this Indenture at a redemption price of 108.250% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, 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 65% of the aggregate
principal amount of Notes (calculated after giving effect to any issuance of
Additional Securities) issued under this Indenture remains outstanding
immediately after the occurrence of such redemption (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, 2008, the Notes may be
redeemed, in whole but not in part, at the option of the Company upon the
occurrence of a Change of Control, upon not less than 30 nor more than 60 days’
prior notice (but in no event more than 90 days after the occurrence of such
Change of Control) mailed by first class mail to each Holder’s registered
address, at a redemption price equal to 100% of the principal amount of Notes
redeemed plus the Applicable Premium as of, and accrued and unpaid interest and
Liquidated Damages, if any, to,

 

41

 

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).

 

“Applicable
Premium” means, with respect to any Note on any
redemption date, the greater of:

 

(1)           1.0% of the principal amount of such Note; or

 

(2)           the excess of:

 

(a)           the
present value at such redemption date of (1) the redemption price of such Note
at May 15, 2008 (such redemption price being set forth in the table above) plus
(2) all required interest payments due on such Note through May 15, 2008,
(including accrued but unpaid interest) computed using a discount rate equal to
the Treasury Rate on such redemption date plus 50 basis points; over

 

(b)           the
principal amount of such Note.

 

“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, 2008; provided, however, that if the period from
the redemption date to May 15, 2008 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 Liquidated Damages, if any, in the same manner on the dates and in
the amounts set forth in the Registration Rights Agreement.

 

42

 

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 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 certified
independent 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

 

43

 

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).

 

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

 

44

 

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 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 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17 and 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

 

45

 

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.

 

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 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 the Existing
Senior Notes and the Company’s 7 3/4% Senior Secured Notes due 2011.

 

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 $1,000 or an integral multiple 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 Liquidated Damages, 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 at least 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

 

46

 

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 of $1,000 or
whole multiples of $1,000, 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 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 $1,000 or an integral multiple 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.

 

47

 

Section 4.11.                         Asset
Sales.

 

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

 

(1)                                  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;

 

(2)                                  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

 

(3)                                  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.

 

48

 

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 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 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.

 

Notwithstanding
the foregoing, with respect to any Asset Sale by the Company or any Guarantor,
such Net Proceeds may only be applied pursuant to items (1) or (6) above and,
to the extent such Net Proceeds are applied to, or with respect to, the
Company, a Guarantor or a Person or a Restricted Subsidiary that becomes a
Guarantor, items (3), (4) or (5) above. 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

 

49

 

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 and the 7 3/4% Senior Secured Notes due 2011) 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 Liquidated Damages, 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 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

 

50

 

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

 

(4)                                  make
any Restricted Investment (all such payments and other actions set forth in
clauses (1) through (4) above 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 January 24,
2002 (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, 2002 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 January 24, 2002 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

 

51

 

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 January 24, 2002
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.

 

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;

 

52

 

(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.
outstanding on January 24, 2002, plus dividends on any subsequently issued
shares of preferred stock of OI Inc. 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.

 

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, with respect to (collectively, “incur”) 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 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 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 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 $1.41 billion of such Indebtedness shall be
incurred by Restricted Subsidiaries 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;

 

53

 

(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 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
$300.0 million aggregate principal amount of 7.85% Senior Notes due 2004, the
$350.0 million aggregate principal amount of 7.15% Senior Notes due 2005, the
$300.0 million aggregate principal amount of 8.10% Senior Notes due 2007, the
$250.0 million aggregate principal amount of 7.35% Senior Notes due 2008 and
the $250.0 million aggregate principal amount of 7.50% Senior Debentures due
2010, in each case of OI Inc.;

 

(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

 

54

 

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;

 

(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 $1.41 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 

 

55

 

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;

 

(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

 

56

 

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 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 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

 

57

 

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 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 the Existing Senior Notes and the Company’s 7 3/4%
Senior Secured Notes due 2011.

 

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,

 

58

 

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;

 

(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.

 

59

 

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:

 

(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 customary annual management, consulting, monitoring and advisory
fees and related expenses to KKR and its Affiliates;

 

(6)                                  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;

 

(7)                                  payments
by OI Group or any of its Restricted Subsidiaries to KKR and its Affiliates for
any financial advisory, financing, underwriting or placement services or in
respect of other investment banking activities, including, without limitation,
in connection with acquisitions or divestitures which

 

60

 

payments are approved by a majority of the
Board of Directors of OI Group in good faith;

 

(8)                                  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;

 

(9)                                  in
addition to any payments referred to in (6) 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;

 

(10)                            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;

 

(11)                            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;

 

(12)                            the
issuance of Equity Interests (other than Disqualified Stock) of OI Group or the
Company to any of the Principals; and

 

(13)                            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.

 

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.

 

61

 

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 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

 

62

 

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 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 July 2, 2003, 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, will
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

 

63

 

the Credit
Agreement have been or will be concurrently assumed by OI Inc. in accordance
with the terms of the Credit Agreement. 
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 Liquidated Damages, 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 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 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

 

64

 

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;

 

(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.

 

65

 

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 of the
Indenture, 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.

 

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 Liquidated Damages 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).

 

66

 

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 Liquidated Damages) 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.

 

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.

 

67

 

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 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

 

68

 

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 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).

 

69

 

(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 further inquiry or investigation into such facts or
matters as it may see fit.

 

(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.

 

70

 

(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).

 

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

 

71

 

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 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 the administration of this Indenture
and its duties hereunder. The Trustee 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(4) or
(5) 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.

 

72

 

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.

 

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

 

73

 

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

 

(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

 

74

 

cancellation for Principal and Liquidated Damages, if any, and accrued
interest to the date of Maturity;

 

(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, 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 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

 

75

 

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 Liquidated Damages, 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 and 2.09;

 

(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’
obligation in connection therewith; and

 

(d)           the provisions of
this Section 8.03;

 

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 Liquidated
Damages, 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 (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;

 

76

 

(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) 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 8.03
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;

 

(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;

 

(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 provided for relating to the defeasance contemplated
by this Section 8.03 have been complied with.

 

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, 4.08, 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, 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 Liquidated
Damages, 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 confirming that Holders of the outstanding Notes
shall not recognize income, gain or loss for federal income

 

77

 

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;

 

(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 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:

 

78

 

(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.;

 

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

 

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

 

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 Liquidated Damages, 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 than U.S. dollars
(including defaulted interest);

 

79

 

(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 Liquidated Damages, 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;

 

(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 such any 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.

 

80

 

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.

 

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
Liquidated Damages, 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

 

81

 

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.

 

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

 

82

 

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 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,

 

83

 

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 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 Domestic
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 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

 

84

 

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 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 the 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

 

85

 

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

 

(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:

 

86

 

If to the Company:

 

Owens-Brockway Glass Container Inc.

One SeaGate

Toledo, Ohio  43666

Attention:    Treasurer

Telephone:  (419) 247-5000

Facsimile:   (419) 247-1218

 

If to the Trustee:

 

U.S. Bank
National Association

180 East Fifth Street

St. Paul, Minnesota  55101

Attention:    Corporate Trust
Administration 

Telephone:  (651) 244-8677

Facsimile:   (651) 244-0711

 

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:

 

87

 

(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:

 

(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

 

88

 

any liability
for any obligations of the Company or any Guarantor, if any, under the Notes,
this Indenture or any Guarantee, 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.

 

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:  Vice President and 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/
  Frank P. Leslie

  
	
   

  	
   

  	
  Name:  Frank P. Leslie

  
	
   

  	
   

  	
  Title:  Vice President

  

 

90

 

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

  
	
  Brockway Research, Inc.

  	
   

  	
  Vice President and Secretary

  
	
  Continental PET Technologies, Inc.

  	
   

  	
  Vice President and Secretary

  
	
  NHW Auburn, LLC

  	
   

  	
  Vice President and Secretary of its sole member

  
	
  OB Cal South Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI AID STS Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Auburn Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Australia Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Brazil Closure Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI California Containers Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Castalia STS Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Consol STS Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Ecuador STS Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Europe & Asia Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI General Finance Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI General FTS Inc.

  	
   

  	
  Vice President and Secretary

  
	
  O-I Health Care Holding Corp.

  	
   

  	
  Vice President and Secretary

  
	
  O-I Holding Company, Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Hungary Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI International Holdings Inc.

  	
   

  	
  Vice President and Secretary

  

 

ANNEX A-1

 

	
  Name of Entity

  	
   

  	
  Title of
  Officer Executing on Behalf of Such Entity

  
	
   

  	
   

  	
   

  
	
  OI Levis Park STS Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Medical Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Peru STS Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Plastic Products FTS Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Poland Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Puerto Rico STS Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Regioplast STS Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OI Venezuela Plastic Products Inc.

  	
   

  	
  Vice President and Secretary

  
	
  OIB Produvisa Inc.

  	
   

  	
  Vice President and Secretary

  
	
  Overseas Finance Company

  	
   

  	
  Vice President and Secretary

  
	
  Owens-Brockway Glass Container Trading Company

  	
   

  	
  Vice President and Secretary

  
	
  Owens-Brockway Packaging, Inc.

  	
   

  	
  Vice President and Secretary

  
	
  Owens-Brockway Plastic Products Inc.

  	
   

  	
  Vice President and Secretary

  
	
  Owens-Illinois Closure Inc.

  	
   

  	
  Vice President and Secretary

  
	
  Owens-Illinois General Inc.

  	
   

  	
  Vice President and Secretary

  
	
  Owens-Illinois Group, Inc.

  	
   

  	
  Vice President, Director of Finance and Secretary

  
	
  Owens-Illinois Prescription Products Inc.

  	
   

  	
  Vice President and Secretary

  
	
  Owens-Illinois Specialty Products Puerto
  Rico, Inc.

  	
   

  	
  Vice President and Secretary

  
	
  Product Design & Engineering, Inc.

  	
   

  	
  Vice President and Secretary

  
	
  Seagate, Inc.

  	
   

  	
  Vice President and Secretary

  
	
  Seagate II, Inc.

  	
   

  	
  Vice President and Secretary

  

 

ANNEX A-2

 

	
  Name of Entity

  	
   

  	
  Title of
  Officer Executing on Behalf of Such Entity

  
	
   

  	
   

  	
   

  
	
  Seagate III, Inc.

  	
   

  	
  Vice President and Secretary

  
	
  Specialty Packaging Licensing Company

  	
   

  	
  Vice President and Secretary

  
	
  Universal Materials, Inc.

  	
   

  	
  Vice President and Secretary

  

 

ANNEX A-3

 

EXHIBIT A

FORM OF CERTIFICATE OF TRANSFER

 

Owens-Brockway Glass Container Inc. 

One SeaGate

Toledo, Ohio 43666

 

Attention: 
Treasurer

 

Re: [Title of Security]

 

(CUSIP/ISIN
            )

 

Reference is hereby made to the
Indenture, dated as of May 6, 2003 (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 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

 

A-1

 

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)                                  o   a
beneficial interest in the:

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

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

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

(b)                                 o   a
Restricted Definitive Security; or

(c)                                  o   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. 

One SeaGate

Toledo, Ohio 43666

 

Attention: 
Treasurer

 

Re:  [Title of Security]

 

(CUSIP/ISIN
             )

 

Reference is hereby made to the
Indenture, dated as of May 6, 2003 (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 not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is 

 

B-1

 

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 6,
2003, 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
Liquidated Damages 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:

  

 

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]

 

OWENS-BROCKWAY GLASS CONTAINER INC.

 

81⁄4% SENIOR NOTES DUE 2013

 

	
  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, 2013.

 

Interest Payment Dates:  May 15 and November 15, commencing November
15, 2003.

 

Record Dates:  May 1 and November 1.

 

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 6, 2003

  	
   

  
	
   

  	
   

  
	
  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.

 

81⁄4% SENIOR NOTES DUE 2013

 

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 Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement.  Interest on this Note shall
accrue from May 6, 2003 or from the most recent interest payment date to which
interest has been paid or provided for, as the case may be; interest and
Liquidated Damages on this Note shall be payable semi-annually on May 15 and November
15 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 November 15, 2003; and interest on
this Note shall be payable to holders of record on the May 1 or November 1
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 Liquidated
Damages 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 May 1 or November 1 (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 Liquidated Damages 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 Liquidated
Damages, 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 Liquidated Damages, 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 Liquidated Damages, 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 6, 2003 among the Company, the Guarantors and the
Trustee (the “Indenture”).  This Note is a series designated as the “8
1/4% Senior Notes due 2013” 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

 

Except as described below, this Note shall
not be redeemable at the Company’s option prior to May 15, 2008.

 

On or after May 15, 2008, the Company may
redeem all or a part of this Note upon not less than 30 nor more than 60 days’
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages, if
any, thereon, to the applicable redemption date, if redeemed during the
twelve-month period beginning on May 15 of the years indicated below:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2008

  	
   

  	
  104.125

  	
  %

  
	
  2009

  	
   

  	
  102.750

  	
  %

  
	
  2010

  	
   

  	
  101.375

  	
  %

  
	
  2011and thereafter

  	
   

  	
  100.000

  	
  %

  

 

At any time prior to May 15, 2006, the
Company may redeem on any one or more occasions up to 35% of the aggregate
principal amount of Notes (calculated after giving effect to any issuance of
Additional Securities) issued under the Indenture at a redemption price of
108.250% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, 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 65% of the
aggregate principal amount of Notes (calculated after giving effect to any
issuance of Additional Securities) issued under the Indenture remains

 

D1-4

 

outstanding immediately after the occurrence
of such redemption (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.

 

In addition, at any time prior to May 15,
2008, this Note may also be redeemed, in whole but not in part, at the option
of the Company upon the occurrence of a Change of Control, upon not less than
30 nor more than 60 days’ prior notice (but in no event more than 90 days after
the occurrence of such Change of Control) mailed by first-class mail to each
Holder’s registered address, at a redemption price equal to 100% of the
principal amount of this Note plus the Applicable Premium as of, and accrued
and unpaid interest and Liquidated Damages, 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 Note on the relevant Interest Payment Date).

 

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 $1,000 or an integral multiple
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 this Note 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 and the 7 3/4% Senior Secured Notes
due 2011) to purchase the maximum principal amount of this Note 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 30 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 $1,000 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 $1,000 of principal amount and any integral
multiple 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 Liquidated Damages, 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 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 principal amount of any such
Indebtedness is equal

 

D1-6

 

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.  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 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,
the Guarantees of the Notes, the Registration Rights Agreement 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.

  
	
   

  	
  One SeaGate

  
	
   

  	
  Toledo, Ohio  43666

  
	
   

  	
  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
Regulation S Temporary Global Security Legend]

 

OWENS-BROCKWAY GLASS CONTAINER INC.

 

8 1/4% SENIOR NOTES DUE 2013

 

	
  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, 2013.

 

Interest Payment Dates:  May 15 and November 15, commencing November
15, 2003.

 

Record Dates:  May 1 and November 1.

 

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 6, 2003

  	
   

  
	
   

  	
   

  
	
  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.

 

8 1/4% SENIOR NOTES DUE 2013

 

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 Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement.  Interest on this Note shall
accrue from May 6, 2003 or from the most recent interest payment date to which
interest has been paid or provided for, as the case may be; interest and
Liquidated Damages on this Note shall be payable semi-annually on May 15 and
November 15 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 November 15, 2003; and interest on
this Note shall be payable to holders of record on the May 1 or November 1
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 Liquidated
Damages 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 May 1 or November 1 (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 Liquidated Damages 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 Liquidated
Damages, 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 Liquidated Damages, 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 Liquidated Damages, if any, on, all Global Notes and all
other Notes the Holders of which will have

 

D2-3

 

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 6, 2003 among the Company, the Guarantors and the
Trustee (the “Indenture”).  This Note is a series designated as the “8
1/4% Senior Notes due 2013” 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

 

Except as described below, this Note shall
not be redeemable at the Company’s option prior to May 15, 2008.

 

On or after May 15, 2008, the Company may
redeem all or a part of this Note upon not less than 30 nor more than 60 days’
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages, if
any, thereon, to the applicable redemption date, if redeemed during the
twelve-month period beginning on May 15 of the years indicated below:

 

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2008

  	
   

  	
  104.125

  	
  %

  
	
  2009

  	
   

  	
  102.750

  	
  %

  
	
  2010

  	
   

  	
  101.375

  	
  %

  
	
  2011and thereafter

  	
   

  	
  100.000

  	
  %

  

 

At any time prior to May 15, 2006, the
Company may redeem on any one or more occasions up to 35% of the aggregate
principal amount of Notes (calculated after giving effect to any issuance of
Additional Securities) issued under the Indenture at a redemption price of
108.250% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, 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

 

D2-4

 

or used to purchase from the Company Capital
Stock (other than Disqualified Stock) of the Company; provided that: (1) at least 65% of the
aggregate principal amount of Notes (calculated after giving effect to any
issuance of Additional Securities) issued under the Indenture remains outstanding
immediately after the occurrence of such redemption (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.

 

In addition, at any time prior to May 15,
2008, this Note may also be redeemed, in whole but not in part, at the option
of the Company upon the occurrence of a Change of Control, upon not less than
30 nor more than 60 days’ prior notice (but in no event more than 90 days after
the occurrence of such Change of Control) mailed by first-class mail to each
Holder’s registered address, at a redemption price equal to 100% of the
principal amount of this Note plus the Applicable Premium as of, and accrued
and unpaid interest and Liquidated Damages, 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 Note on the relevant Interest Payment Date).

 

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 $1,000 or an integral multiple
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 this Note 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 and the 7 3/4% Senior Secured Notes
due 2011) to purchase the maximum principal amount of this Note 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 30 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 $1,000 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

 

D2-5

 

for redemption.

9.             Denominations;
Transfer; Exchange

 

The Note is in registered form, without
coupons, in denominations of $1,000 of principal amount and any integral
multiple 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 Liquidated Damages, 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 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

 

D2-6

 

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.  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 interest that has become due solely because
of the acceleration.

 

D2-7

 

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, the
Guarantees of the Notes, the Registration Rights Agreement 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.

 

D2-8

 

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.

  
	
   

  	
  One SeaGate

  
	
   

  	
  Toledo, Ohio  43666

  
	
   

  	
  Attention:  Investor Relations

  
	
   

  	
   

  
	
   

  	
   

  

 

D2-9

 

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

  	
   

  
						

 

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

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