Document:

Exhibit 4.1

 

EXECUTION COPY

 

	
   

  	
   

  

 

 

OWENS-BROCKWAY GLASS CONTAINER INC.

 

the Company

 and

 

The Guarantors set forth in Annex A attached
hereto

 the Guarantors

 

 

3.00% Exchangeable Senior Notes due 2015

 

 

 

 

INDENTURE

 

Dated as of May 7, 2010

 

 

 

 

U.S. Bank National Association,

 

as Trustee

 

	
   

  	
   

  

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Article I
  Definitions and Incorporation by Reference

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
   

  	
  Definitions

  	
   

  	
  1

  
	
   

  	
  Incorporation by Reference of Trust Indenture Act

  	
   

  	
  15

  
	
   

  	
  Rules of Construction

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  Article II
  The Notes

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
   

  	
  Designation; Amount and Issuance of Notes

  	
   

  	
  16

  
	
   

  	
  Form, Dating and Denomination; Execution and Authentication

  	
   

  	
  17

  
	
   

  	
  Payment at Maturity;
  Payment of Interest

  	
   

  	
  19

  
	
   

  	
  Registrar and Paying Agent

  	
   

  	
  19

  
	
   

  	
  Paying Agent to Hold Money in Trust

  	
   

  	
  20

  
	
   

  	
  Holder Lists

  	
   

  	
  20

  
	
   

  	
  Exchange and
  Registration of Transfer of Notes; Restrictions on Transfer

  	
   

  	
  21

  
	
   

  	
  Replacement Notes

  	
   

  	
  24

  
	
   

  	
  Outstanding Notes

  	
   

  	
  25

  
	
   

  	
  Temporary Notes

  	
   

  	
  25

  
	
   

  	
  Cancellation

  	
   

  	
  25

  
	
   

  	
  Defaulted Interest

  	
   

  	
  26

  
	
   

  	
  CUSIP Numbers and ISINs

  	
   

  	
  26

  
	
  Section 2.14

  	
  Automatic Exchange from Restricted OI Inc. Common Stock to
  Unrestricted OI Inc. Common Stock

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  Article III
  Purchases Upon a Fundamental Change

  	
   

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Purchase at Option of Holder Upon a Fundamental Change

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  Article IV
  Covenants

  	
   

  	
  30

  
	
   

  	
   

  	
   

  
	
   

  	
  Payment of Notes

  	
   

  	
  30

  
	
   

  	
  Commission Reports

  	
   

  	
  30

  
	
   

  	
  Compliance Certificate

  	
   

  	
  31

  
	
   

  	
  Notice of Defaults

  	
   

  	
  31

  
	
   

  	
  Registration Default Additional Interest

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  Article V
  Successor Company or Successor Guarantor

  	
   

  	
  32

  
	
   

  	
   

  	
   

  
	
   

  	
  When the Company, OI Group or OI Inc. May Merge or
  Transfer Assets

  	
   

  	
  32

  
	
   

  	
  Assignment of Obligations

  	
   

  	
  33

  

 

i

 

	
  Article VI
  Defaults and Remedies

  	
   

  	
  34

  
	
   

  	
   

  	
   

  
	
   

  	
  Events of Default

  	
   

  	
  34

  
	
   

  	
  Acceleration

  	
   

  	
  36

  
	
   

  	
  Other Remedies

  	
   

  	
  36

  
	
   

  	
  Waiver of Past Defaults

  	
   

  	
  36

  
	
   

  	
  Control by Majority

  	
   

  	
  37

  
	
   

  	
  Limitation on Suits

  	
   

  	
  37

  
	
   

  	
  Rights of Holders to Receive Payment

  	
   

  	
  38

  
	
   

  	
  Collection Suit by Trustee

  	
   

  	
  38

  
	
   

  	
  Trustee May File Proofs of Claim

  	
   

  	
  38

  
	
   

  	
  Priorities

  	
   

  	
  38

  
	
   

  	
  Undertaking for Costs

  	
   

  	
  39

  
	
   

  	
  Waiver of Stay or Extension Laws

  	
   

  	
  39

  
	
   

  	
  Failure to Comply with Reporting Covenant

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  Article VII
  Trustee

  	
   

  	
  40

  
	
   

  	
   

  	
   

  
	
   

  	
  Duties of Trustee

  	
   

  	
  40

  
	
   

  	
  Rights of Trustee

  	
   

  	
  41

  
	
   

  	
  Individual Rights of Trustee

  	
   

  	
  43

  
	
   

  	
  Trustee’s Disclaimer

  	
   

  	
  43

  
	
   

  	
  Notice of Defaults

  	
   

  	
  43

  
	
   

  	
  Compensation and Indemnity

  	
   

  	
  43

  
	
   

  	
  Replacement of Trustee

  	
   

  	
  44

  
	
   

  	
  Successor Trustee by Merger

  	
   

  	
  45

  
	
   

  	
  Eligibility; Disqualification

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  Article VIII
  Discharge of Indenture

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
   

  	
  Discharge of Liability on Notes

  	
   

  	
  46

  
	
   

  	
  Application of Trust Money

  	
   

  	
  46

  
	
   

  	
  Repayment to Company

  	
   

  	
  46

  
	
   

  	
  Reinstatement

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  Article IX
  Amendments and Waivers

  	
   

  	
  47

  
	
   

  	
   

  	
   

  
	
   

  	
  Without Consent of Holders

  	
   

  	
  47

  
	
   

  	
  With Consent of Holders

  	
   

  	
  48

  
	
   

  	
  Revocation and Effect of Consents and Waivers

  	
   

  	
  49

  
	
   

  	
  Notation on or Exchange of Notes

  	
   

  	
  49

  
	
   

  	
  Trustee to Sign Amendments

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  Article X
  Guarantees

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
   

  	
  Guarantees

  	
   

  	
  50

  
	
   

  	
  Limitation on Liability

  	
   

  	
  52

  
	
   

  	
  Execution and Delivery of Guarantees

  	
   

  	
  52

  

 

ii

 

	
   

  	
  Successors and Assigns

  	
   

  	
  52

  
	
   

  	
  No Waiver

  	
   

  	
  52

  
	
   

  	
  Right of Contribution

  	
   

  	
  52

  
	
   

  	
  No Subrogation

  	
   

  	
  52

  
	
   

  	
  Additional Guarantors; Reinstatement of Guarantees

  	
   

  	
  53

  
	
   

  	
  Modification

  	
   

  	
  53

  
	
   

  	
  Release of Guarantor

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  Article XI
  Exchange of Notes

  	
   

  	
  54

  
	
   

  	
   

  	
   

  
	
   

  	
  Exchange Rights

  	
   

  	
  54

  
	
   

  	
  Exchange Procedures; Settlement Upon Exchange; Fractional
  Shares

  	
   

  	
  56

  
	
   

  	
  Adjustment to Exchange Rate Upon Exchange Upon a Make-Whole
  Fundamental Change

  	
   

  	
  59

  
	
   

  	
  Adjustment of Exchange Rate

  	
   

  	
  61

  
	
   

  	
  Recapitalizations, Reclassifications and Changes of OI Inc.
  Common Stock

  	
   

  	
  69

  
	
   

  	
  Certain Covenants

  	
   

  	
  70

  
	
   

  	
  Notice to Holders Prior to Certain Actions

  	
   

  	
  70

  
	
   

  	
  Shareholder Rights Plans

  	
   

  	
  71

  
	
   

  	
  Responsibility of Trustee

  	
   

  	
  71

  
	
   

  	
  Certain Other Adjustments

  	
   

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  Article XII
  Miscellaneous

  	
   

  	
  72

  
	
   

  	
   

  	
   

  
	
   

  	
  Indenture Subject to Trust Indenture Act

  	
   

  	
  72

  
	
   

  	
  Notices

  	
   

  	
  72

  
	
   

  	
  Communication by Holders with Other Holders

  	
   

  	
  74

  
	
   

  	
  Certificate and Opinion as to Conditions Precedent

  	
   

  	
  74

  
	
   

  	
  Statements Required in Certificate or Opinion

  	
   

  	
  74

  
	
   

  	
  When Notes Disregarded

  	
   

  	
  74

  
	
   

  	
  Rules by Trustee, Paying Agent and Registrar

  	
   

  	
  74

  
	
   

  	
  GOVERNING LAW

  	
   

  	
  75

  
	
   

  	
  No Recourse Against Others

  	
   

  	
  75

  
	
   

  	
  Successors

  	
   

  	
  75

  
	
   

  	
  Multiple Originals

  	
   

  	
  75

  
	
   

  	
  Effect of Headings, Table of Contents, Etc

  	
   

  	
  75

  
	
   

  	
  Indenture Controls

  	
   

  	
  75

  
	
   

  	
  Calculations

  	
   

  	
  75

  
	
   

  	
  Severability

  	
   

  	
  75

  

 

	
  Annex A

  	
  -

  	
  Guarantors

  
	
  Exhibit A

  	
  -

  	
  Form of
  Note (including forms of Exchange Notice, Fundamental Change Purchase Notice,
  Assignment and Certificate to be Delivered Upon Exchange or Registration of
  Restricted Notes)

  

 

iii

 

	
  Exhibit B

  	
  -

  	
  Form of
  Restricted Legend for OI Inc. Common Stock Issued Upon Exchange (including
  form of Assignment and Form of Certificate to be Delivered Upon Exchange
  or Registration of Shares of Restricted OI Inc. Common Stock)

  

 

iv

 

INDENTURE
dated as of May 7, 2010, among Owens-Brockway Glass Container Inc., a
Delaware corporation (the “Company”), Owens-Illinois, Inc. (“OI Inc.”),  the Guarantors (as defined herein) and U.S.
Bank National Association, a national banking association, as trustee (the “Trustee”).

 

Each
party agrees as follows for the benefit of the other parties and for the equal
and ratable benefit of the Holders of the Company’s 3.00% Exchangeable Senior
Notes due 2015 issued on the date hereof (the “Original Notes”) and any
Additional Notes (as defined herein) that may be issued after the date hereof
(all such Notes being referred to collectively as the “Notes”).  The aggregate principal amount of the
Original Notes shall be $600,000,000 (or $690,000,000 if the Initial Purchasers
exercise their over-allotment option in full in accordance with the Purchase
Agreement).  Subject to the conditions
and compliance with the covenants set forth herein, the Company may issue an
unlimited aggregate principal amount of Additional Notes.

 

Article I

 

Definitions
and Incorporation by Reference

 

Section 1.01           Definitions.
The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes
of this Indenture and of any indenture supplemental hereto shall have the
respective meanings specified in this Section 1.01.

 

“Additional
Notes” means Notes issued under the terms of this Indenture subsequent to the
Issue Date.

 

“Additional
Shares” has the meaning specified in Section 11.03(a).

 

“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 the purposes
of this definition, “control” (including, with correlative meanings, the terms “controlling,”
“controlled by” and “under common control with”), as used with respect to any
Person, means 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.

 

“Agent
Members” has the meaning specified in Section 2.07(b)(vi).

 

“Automatic
Exchange” has the meaning specified in Section 2.14.

 

“Automatic
Exchange Notice” has the meaning specified in Section 2.14.

 

“Bankruptcy
Law” has the meaning specified in Section 6.01.

 

“Bid
Solicitation Agent” means the agent appointed by the Company to determine the
Trading Price of the Notes.  The Bid
Solicitation Agent shall initially be the Company; 

 

1

 

provided, however, that the Company may appoint another Person
(including, without limitation, the Trustee, if it so agrees) as the Bid
Solicitation Agent without prior notice to the Holders.

 

“Board
of Directors” means as to any Person, the board of directors of such Person
(or, if such Person is a partnership, the board of directors or other governing
body of the general partner of such Person) or any duly authorized committee
thereof.

 

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

 

“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:

 

(a) in the case of a corporation, corporate stock;

 

(b) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;

 

(c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and

 

(d) 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
Settlement Averaging Period” with respect to any Note means:

 

(a)           with respect to Exchange Notices
received during the period beginning on, and including, March 1, 2015, the
20 consecutive Trading Day period beginning on, and including, the 22nd
Scheduled Trading Day prior to the Maturity Date; and

 

(b)           in all other cases, the 20
consecutive Trading Day period beginning on, and including, the third Trading
Day immediately following the related Exchange Date.

 

“Cash
Settlement Averaging Period Market Disruption Event” means:

 

(a)           a failure by the primary exchange or
quotation system on which OI Inc. Common Stock trades or is quoted to open for
trading during its regular trading session; or

 

(b)           the occurrence or existence prior to 1:00 p.m.
on any Trading Day for OI Inc. Common Stock, of an aggregate one half-hour
period of any suspension or limitation imposed on trading (by reason of
movements in price exceeding limits permitted by the stock exchange or
otherwise) in OI Inc. Common Stock or in any options, contracts or future
contracts relating to OI Inc. Common Stock.

 

2

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

“Company”
means the party named as such in the Preamble to this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein, each other obligor on the Notes.

 

“Corporate
Trust Office” means the principal office of the Trustee at which at any time
its corporate trust business shall be administered, which office at the date
hereof is located at 60 Livingston Avenue, EP-MN-WS3C St. Paul, MN 55107-1419,
Attn:  Corporate Trust Administration, or
such other address as the Trustee may designate from time to time by notice to
the Holders and the Company, or the principal corporate trust office of any
successor Trustee (or such other address as such successor Trustee may
designate from time to time by notice to the Holders and the Company).

 

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

 

“Custodian”
has the meaning specified in Section 6.01.

 

“Daily
Exchange Value” means, for each of the 20 consecutive Trading Days during the
relevant Cash Settlement Averaging Period, 5% of the product of:

 

(a)           the applicable Exchange Rate on such
Trading Day; and

 

(b)           the daily VWAP of OI Inc. Common
Stock on such Trading Day.

 

“Daily
Settlement Amount” for each of the 20 consecutive Trading Days during the Cash
Settlement Averaging Period shall consist of:

 

(a)           cash equal to the lesser of (i) $50.00
per Note and (ii) the Daily Exchange Value; and

 

(b)           if the Daily Exchange Value exceeds
$50.00, a number of shares of OI Inc. Common Stock equal to (i) the
difference between the Daily Exchange Value and $50.00, divided by (ii) the daily VWAP of OI
Inc. Common Stock for such Trading Day.

 

“Daily
VWAP” of OI Inc. Common Stock means, for each of the 20 consecutive Trading
Days during the relevant Cash Settlement Averaging Period, the per share
volume-weighted average price as displayed under the heading “Bloomberg VWAP”
on Bloomberg page “OI <equity> AQR” (or its equivalent successor if
such page is not available) in respect of the period from the scheduled
open of trading until the scheduled close of trading of the primary trading
session on such Trading Day (or if such volume-weighted average price is
unavailable, 

 

3

 

the
market value of one share of OI Inc. Common Stock on such Trading Day as
determined by a U.S. nationally recognized independent investment banking firm
retained for this purpose by the Company). 
Daily VWAP will be determined without regard to after-hours trading or
any other trading outside of the regular trading session.

 

“Default”
means any event which is, or after notice or passage of time or both would be,
an Event of Default.

 

“Depositary”
means the clearing agency registered under the Exchange Act that is designated
to act as the Depositary for the Global Notes. 
DTC shall be the initial Depositary, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, “Depositary” shall mean or include such successor.

 

“Disqualified
Stock” has the meaning specified in any Senior Note Indenture, and to the
extent that none of the Senior Note Indentures remains in effect, has the
meaning specified in the last of the Senior Note Indentures that ceases to be
in effect as of the last day that such Senior Note Indenture was in effect.

 

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

 

“DTC”
means The Depository Trust Company.

 

“Effective
Date” means the date on which a Make-Whole Fundamental Change occurs or becomes
effective.

 

“Effective
Default” has the meaning specified in the Registration Rights Agreement.

 

“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).

 

“Event
of Default” has the meaning specified in Section 6.01.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.

 

“Exchange
Agent” means the agent appointed by the Company to which Notes may be presented
for exchange.  The Exchange Agent
appointed by the Company shall initially be U.S. Bank National Association.

 

“Exchange
Consideration” has the meaning specified in Section 11.02(b).

 

“Exchange
Date” has the meaning specified in Section 11.02(a).

 

“Exchange
Notice” has the meaning specified in Section 11.02(a).

 

4

 

“Exchange
Obligation” has the meaning specified in Section 11.01.

 

“Exchange
Price” on any date of determination means $1,000 divided by the Exchange Rate
as of such date.

 

“Exchange
Rate” has the meaning specified in Section 11.01.

 

“Ex-Dividend
Date” is the first date on which the shares of OI Inc. Common Stock trade on
the applicable exchange or in the applicable market, regular way, without the
right to receive the issuance, dividend or distribution in question.

 

“Expiration
Date” has the meaning specified in Section 11.04(e).

 

“Expiration
Time” has the meaning specified in Section 11.04(e).

 

“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.

 

“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.

 

“Fundamental
Change” will be deemed to have occurred at the time after the Issue Date when
any of the following occurs:

 

(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) or Section 14(d)(2) of
the Exchange Act, or any successor provision), including any group acting for
the purpose of acquiring, holding or disposing of securities (within the
meaning of Rule 13d-5(b)(1) under the Exchange Act), in a single
transaction or a related series of transactions, by way of the purchase of
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange
Act, or any successor provision) of more than 50% of the total voting power of
the Voting Stock of OI Inc.;

 

(2)           consummation of (a) any
recapitalization, reclassification or change of OI Inc. Common Stock (other
than changes resulting from a subdivision or combination) or any binding share
exchange, consolidation or merger of OI Inc. pursuant to which OI Inc. Common
Stock will be exchanged into cash, securities or other property or (b) any
sale, lease or other transfer in one transaction or a series of transactions of
all or substantially all of the consolidated assets of OI Inc. and its
Subsidiaries, taken as a whole, to any person other than one or more of the
Subsidiaries of OI Inc. (any such exchange, offer, consolidation, merger,
transaction or series of transactions being referred to herein as an “Event”); provided, however, that any such Event where the Holders of
more than 50% of the voting power of OI Inc. Common Stock immediately prior to
such Event, own, directly or indirectly, more than 50% of the voting power of
all classes of common equity 

 

5

 

of
the continuing or surviving person or transferee or the parent thereof
immediately after such event shall not be a Fundamental Change;

 

(3)           the consolidation or merger of the
Company with or into any person, other than OI Inc. or one or more Subsidiaries
of OI Inc., in any such event pursuant to a transaction in which any of the
outstanding Voting Stock of the Company 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), becomes, directly or indirectly, the
beneficial owner (as defined in clause (1)) of 50% or more of the voting power
of all classes of Voting Stock of the Company;

 

(4)           the stockholders of OI Inc. approve
any plan or proposal for the liquidation or dissolution of OI Inc.;

 

(5)           the OI Inc. Common Stock (or other
common stock into which the notes are then exchangeable) ceases to be listed on
at least one U.S. national securities exchange; or

 

(6)           the first day on which OI Inc. fails
to own 100% of the issued and outstanding Equity Interests of OI Group.

 

provided, however, no transaction or event described in clause (2) above
will constitute a Fundamental Change, if at least 90% of the consideration,
excluding cash payments for fractional shares or made pursuant to dissenters’
appraisal rights,  in the transaction or
event that would otherwise have constituted a Fundamental Change consists of
shares of Publicly Traded Securities and as a result of this transaction or
event the Notes become exchangeable into such Publicly Traded Securities
pursuant to Section 11.05, excluding cash payments for fractional shares,
subject to the provisions set forth under Section 11.02.

 

Any
transaction that is a Fundamental Change under clauses (1) and (2) of
the definition thereof shall be a Fundamental Change only under clause (2) of
this definition of Fundamental Change.

 

After
any transaction in which OI Inc. Common Stock is replaced by securities of
another entity, should one occur, following completion of any related
Make-Whole Fundamental Change Period and any related Fundamental Change
Purchase Date, references to OI Inc. in the definition of Fundamental Change
shall apply to such other entity instead.

 

“Fundamental
Change Notice” has the meaning specified in Section 3.01(b).

 

“Fundamental
Change Purchase Date” has the meaning specified in Section 3.01(a).

 

6

 

“Fundamental
Change Purchase Notice” has the meaning specified in Section 3.01(c).

 

“Fundamental
Change Purchase Price” has the meaning specified in Section 3.01(a).

 

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

 

“Global
Notes” has the meaning specified in Section 2.02(b).

 

“Global
Notes Legend” means the legend set forth under that caption in Exhibit A
to the Indenture.

 

“Guarantee”
has the meaning specified in Section 10.01.

 

“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 and
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.

 

“Guarantor”
refers to:

 

(a)           OI Group;

 

(b)           each direct or indirect Domestic
Subsidiary of OI Group (other than the Company) that guarantees the Credit
Agreement as of Issue Date; and

 

(c)           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:

 

(a)           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;

 

(b)           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

 

7

 

(c)           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 the Person in whose name a Note is registered on the Registrar’s books.

 

“incur”
means issue, assume, guarantee, incur or otherwise become liable for.

 

“Indebtedness”
means, with respect to any specified Person, any indebtedness of such Person,
whether or not contingent, in respect of:

 

(a)           borrowed money;

 

(b)           evidenced by bonds,
notes, debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof);

 

(c)           banker’s
acceptances;

 

(d)           representing Capital
Lease Obligations;

 

(e)           the balance deferred
and unpaid of the purchase price of any property, except any such balance that
constitutes an accrued liability or trade payable; or

 

(f)            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.

 

“Initial
Purchasers” means Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Goldman, Sachs &
Co., Barclays Capital Inc., BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., HSBC
Securities (USA) Inc., and Scotia Capital (USA) Inc.

 

“Interest
Payment Date” has the meaning specified in Section 2.03(b).

 

8

 

“Issue
Date” means May 7, 2010.

 

“Last
Reported Sale Price” of OI Inc. Common Stock on any date means:

 

(a)           the
closing sale price per share (or if no closing sale price is reported, the
average of the last bid price and the last ask price or, if more than one in
either case, the average of the average last bid price and the average last ask
price) on that date as reported in composite transactions for the principal
U.S. securities exchange on which OI Inc. Common Stock is listed for trading;

 

(b)           if
OI Inc. Common Stock is not listed for trading on a U.S. securities exchange on
the relevant date, the last quoted bid price for OI Inc. Common Stock in the
over-the-counter market on the relevant date as reported by Pink OTC Markets
Inc. or a similar organization; or

 

(c)           if
OI Inc. Common Stock is not so quoted, as determined by a U.S. nationally
recognized independent investment banking firm selected by the Company for this
purpose.

 

The
Last Reported Sale Price of OI Inc. Common Stock will be determined without
reference to after-hours or extended market trading.

 

“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.

 

“Make-Whole
Fundamental Change” means any transaction or event described under clause (1),
(2), (4) or (5) under the definition of “Fundamental Change” (except
in the case of a Fundamental Change described in clause (2) of the
definition thereof, determined without regard to the proviso in such
definition, but subject to the paragraphs immediately following clause (6) of
the definition thereof)

 

“Make-Whole
Fundamental Change Period” means the period from, and including, the Effective
Date of a Make-Whole Fundamental Change to, and including:

 

(a)           if such Make-Whole Fundamental Change
also constitutes a Fundamental Change, the Business Day immediately preceding
the related Fundamental Change Purchase Date; or

 

(b)           if such Make-Whole Fundamental
Changes does not also constitute a Fundamental Change, the 20th Business Day
immediately following the Effective Date of such Make-Whole Fundamental Change.

 

“Market
Disruption Event,” means, if OI Inc. Common Stock is listed for trading on the
New York Stock Exchange or another U.S. national or regional securities
exchange, the 

 

9

 

occurrence
or existence during the one-half hour period ending on the scheduled close of
trading on any Trading Day of any material suspension or limitation imposed on
trading (by reason of movements in price exceeding limits permitted by the
stock exchange or otherwise) in OI Inc. Common Stock or in any options,
contracts or future contracts relating to OI Inc. Common Stock on the primary
market for the trading of such options, contracts or future contracts.

 

“Maturity
Date” means June 1, 2015.

 

“Note”
or “Notes” means the Company’s 3.00% Exchangeable Senior Notes due 2015.

 

“Notes
Custodian” means the custodian with respect to a Global Note (as appointed by
the Depositary) or any successor person thereto, who shall initially be the
Trustee.

 

“Notice
of Default” has the meaning specified in Section 4.04.

 

“Obligations”
has the meaning specified in Section 10.01.

 

“Offering
Memorandum” means the final offering memorandum dated May 3, 2010 with
respect to the offering and sale of the Notes.

 

“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 or
OI Inc., as the case may be.

 

“Officers’
Certificate” means a certificate signed on behalf of the Company by two
Officers of the Company or OI Inc., as the case may be.  One of the officers executing an Officers’
Certificate must be the Chief Executive Officer, the President, the Chief
Financial Officer, the Treasurer or the principal accounting officer of the
Company or OI Inc., as the case may be.

 

“OI
Group” means Owens-Illinois Group, Inc.

 

“OI
Inc.” means Owens-Illinois, Inc.

 

“OI
Inc. Common Stock” means the shares of common stock, par value $0.01 per share,
of OI Inc. as such stock may be constituted from time to time.  Subject to the provisions of Section 11.05,
shares issuable on exchange of Notes shall include only shares of OI Inc.
Common Stock or shares of any class or classes of common stock resulting from
any reclassification or reclassifications thereof; provided,
however, that if at any time there shall
be more than one such resulting class, the shares so issuable on exchange of
Notes shall include shares of all such classes, and the shares of each such
class then so issuable shall be substantially in the proportion which the total
number of shares of such class resulting from all such reclassifications bears
to the total number of shares of all such classes resulting from all such
reclassifications.

 

10

 

“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.

 

“Original
Notes” has the meaning specified in the Preamble to this Indenture.

 

“Paying
Agent” has the meaning specified in Section 2.04(a).

 

“Payment
Default” has the meaning specified in Section 6.01(h)(i).

 

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

 

“protected
purchaser” has the meaning specified in Section 2.08.

 

“Publicly
Traded Security” means common stock that is traded or equivalent common equity
listed on a U.S. national securities exchange or that will be so traded when
issued or exchanged in connection with the relevant transaction or event.

 

“Purchase
Agreement” means (a) the Purchase Agreement dated May 3, 2010, among
the Company, OI Inc., OI Group and the Guarantors and the Initial Purchasers
and (b) any other similar Purchase Agreement relating to Additional Notes.

 

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

 

“Reference
Property” has the meaning specified in Section 11.05.

 

“Register”
has the meaning specified in Section 2.04(a).

 

“Registrar”
has the meaning specified in Section 2.04(a).

 

“Registration
Default” has the meaning specified in the Registration Rights Agreement.

 

“Registration
Default Additional Interest” has the meaning specified in the Registration
Rights Agreement.

 

“Registration
Rights Agreement” means (a) the Registration Rights Agreement dated as of May 7,
2010, among the Company, OI Inc. and the Initial Purchasers, pursuant to which
OI Inc. will file or have on file with the Commission a shelf registration
statement pursuant to Rule 415 under the covering the resale of the OI
Inc. Common Stock, subject to the terms and conditions therein specified.

 

“Regular
Record Date” means, with respect to any Interest Payment Date, the May 15
and November 15 (whether or not a Business Day) preceding the applicable June 1
and December 1 Interest Payment Date, respectively.

 

11

 

“Reorganization
Event” has the meaning specified in Section 11.05.

 

“Reporting
Default Additional Interest” means all amounts, if any, payable pursuant to Section 6.13.

 

“Resale
Restriction Termination Date” has the meaning specified in Section 2.07(d).

 

“Restricted
Global Note” has the meaning specified in Section 2.07(c).

 

“Restricted
Legend” means the legend set forth in Exhibit A, in the case of Notes or Exhibit B,
in the case of OI Inc. Common Stock.

 

“Restricted
OI Inc. Common Stock” has the meaning specified in Section 2.07(c).

 

“Restricted
Securities” has the meaning specified in Section 2.07(c).

 

“Restricted
Subsidiary” means any Subsidiary of OI Group that is not an Unrestricted
Subsidiary.

 

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

 

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

 

“Schedule
TO” means a Tender Offer Statement under Section 14(d)(1) or 13(e)(1) of
the Exchange Act.

 

“Scheduled
Trading Day” means any day that is scheduled to be a Trading Day on the primary
U.S. securities exchange or market on which OI Inc. Common Stock is listed or
admitted for trading.  If OI Inc. Common
Stock is not so listed or admitted for trading, “Scheduled Trading Day” means a
Business Day.

 

“SEC”
means the Securities and Exchange Commission.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.

 

“Senior
Note Indenture” means any of the following:

 

(a)           the indenture, dated May 6, 2003, among the Company, the guarantors
named therein and U.S. Bank National Association, as trustee, pursuant to which
the 8.25% senior notes due 2013 of the Company were issued;

 

(b)           the indenture, dated December 1, 2004, among the Company, the
guarantors named therein and Law Debenture Trust Company of New York, as
trustee, Deutsche Bank Trust Company Americas, as registrar and dollar notes
paying agent, and Deutsche Bank AG, acting through its London Branch, as euro
notes paying agent, pursuant to which the dollar-

 

12

 

denominated 6.75% senior
notes due 2014 of the Company and the euro-denominated 6.75% senior notes due
2014 of the Company were issued; and

 

(c)           the indenture, dated May 12, 2009,
among the Company, the guarantors named therein and U.S. Bank
National Association, as trustee, pursuant to which the 7.375% senior notes due
2016 of the Company were issued.

 

“Significant
Subsidiary” of a Person means a Subsidiary of such Person that would be a “significant
subsidiary” of such Person within the meaning of Rule 1-02(w) under
Regulation S-X of the Securities Act, as such Regulation is in effect on
the Issue Date.

 

“Spin-Off”
has the meaning specified in Section 11.04(c).

 

“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.

 

“Stock
Price” means the price paid (or deemed paid) per share of OI Inc. Common Stock
in the Make-Whole Fundamental Change. If the holders of OI Inc. Common Stock
receive only cash in a Make-Whole Fundamental Change described in clause (2) of
the definition of Fundamental Change, the Stock Price shall be the cash amount
paid per share of OI Inc. Common Stock. 
In all other cases, the Stock Price shall be the average of the Last
Reported Sale Prices of OI Inc. Common Stock over the five Trading Day period
ending on, and including, the Trading Day immediately preceding the Effective
Date of the Make-Whole Fundamental Change.

 

“Subsidiary”
means, with respect to any specified Person:

 

(a)           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

 

(b)           any partnership (i) the
sole general partner or the managing general partner of which is such Person or
a Subsidiary of such Person or (ii) the only general partners of which are
such Person or one or more Subsidiaries of such Person (or any combination
thereof).

 

“Successor
Company” has the meaning specified in Section 5.01(a)(i).

 

“Successor
Guarantor” has the meaning specified in Section 5.01(b)(i).

 

“TIA”
means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as
in effect on the Issue Date.

 

13

 

“Trading
Day,” except for purposes of determining the Daily Settlement Amounts and the
Daily Exchange Values, means a day on which:

 

(a)           trading in OI Inc. Common Stock generally occurs on the New York Stock
Exchange or, if OI Inc. Common Stock is not then listed on the New York Stock
Exchange, on the principal other U.S. national or regional securities exchange
on which OI Inc. Common Stock is then listed or, if OI Inc. Common Stock is not
then listed on a U.S. national or regional securities exchange, on the
principal other market on which OI Inc. Common Stock is then traded; and

 

(b)           there is no Market Disruption Event.

 

If
OI Inc. Common Stock (or other security for which a Last Reported Sale Price
must be determined) is not so listed or traded, “Trading Day” means a Business
Day.

 

“Trading
Day,” solely for the purposes of determining the Daily Settlement Amounts and
the Daily Exchange Value, means:

 

(a)           a day during which trading in OI Inc. Common Stock generally occurs on
the primary exchange or quotation system on which OI Inc. Common Stock then
trades or is quoted; and

 

(b)           there is no Cash Settlement Averaging Period Market Disruption Event.

 

If
the OI Inc. Common Stock (or other Security for which Daily VWAP must be
determined) is not so listed or traded, a Business Day.

 

“Trading
Price” per $1,000 principal amount of the Notes on any date of determination
means the average of the secondary market bid quotations obtained by the Bid
Solicitation Agent for $5.0 million principal amount of the Notes at
approximately 3:30 p.m., New York City time, on such determination date
from three independent U.S. nationally recognized securities dealers the
Company selects; provided that, if three such bids cannot
reasonably be obtained by the Bid Solicitation Agent but two such bids are
obtained, then the average of the two bids shall be used, and if only one such
bid can reasonably be obtained by the Bid Solicitation Agent, that one bid
shall be used.  If the Bid Solicitation
Agent cannot reasonably obtain at least one bid for $5.0 million principal
amount of the Notes from a U.S. nationally recognized securities dealer, then
the Trading Price per $1,000 principal amount of Notes will be deemed to be
less than 98% of the product of the Last Reported Sale Price of OI Inc. Common
Stock and the applicable Exchange Rate. 
If, upon presentation of reasonable evidence by the Holder, the Company
does not instruct the Bid Solicitation Agent to make such determination, the
Trading Price per $1,000 principal amount of the Notes will be deemed to be
less than 98% of the product of the Last Reported Sale Price of OI Inc. Common
Stock and the applicable Exchange Rate on each day the Company fails to do so.

 

“Trading
Price Measurement Period” has the meaning specified in Section 11.01(b).

 

14

 

“Trustee”
means the party named as such in this Indenture until a successor replaces it
and, thereafter, means the successor.

 

“Trust
Officer” means, with respect to the Trustee:

 

(a)           any officer within the Corporate Trust Office of the Trustee, including
any vice president, managing director, trust officer or any other officer of
the Trustee who customarily performs functions similar to those performed by
the Persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred because of such person’s knowledge of
and familiarity with the particular subject, and

 

(b)           who shall have direct responsibility for the administration of this
Indenture.

 

“Uniform
Commercial Code” means the New York Uniform Commercial Code as in effect from
time to time.

 

“Unrestricted
OI Inc. Common Stock” has the meaning specified in Section 2.14.

 

“Unrestricted
Subsidiary” means any Subsidiary of OI Group (other than the Company) that is designated by
the Board of Directors of OI Group as an ‘‘Unrestricted Subsidiary’’ in
accordance with the terms of any of the Senior Note Indentures, and to the
extent that all of the Senior Note Indentures cease to remain in effect, means
any Subsidiary of OI Group (other than the Company) that is designated by the
Board of Directors of OI Group as an ‘‘Unrestricted Subsidiary’’ in accordance
with the terms of the last of the Senior Note Indentures that ceases to be in
effect as of the last day that such Senior Note Indentures was in effect.

 

“Valuation
Period” has the meaning specified in Section 11.04(c).

 

“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

 

“Wholly
Owned Subsidiary” is a Subsidiary of the Company, all the capital stock of
which (other than directors’ qualifying shares) is owned by the Company or
another Wholly Owned Subsidiary.

 

Section 1.02           Incorporation by Reference of Trust Indenture Act.  This Indenture
incorporates by reference certain provisions of the TIA.  The following TIA terms have the following
meanings:

 

“Commission”
means the SEC.

 

“indenture
securities” means the Notes and the Guarantee.

 

“indenture
security holder” means a Holder.

 

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

 

15

 

“obligor”
on the indenture securities means the Company, and OI Inc. and any other
obligor on the Notes.

 

Section 1.03           Rules of Construction.  Unless the context
otherwise requires:

 

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

 

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

 

(c)           “or” is not exclusive;

 

(d)           “including” means including without limitation;

 

(e)           words in the singular include the plural and words in the plural include
the singular;

 

(f)            provisions apply to successive events and transactions; and

 

(g)           all references to “interest” shall include Registration Default
Additional Interest, if any, payable pursuant to Section 4.05 and
Reporting Default Additional Interest, if any, 
payable pursuant to Section 6.13.

 

Article II

 

The Notes

 

Section 2.01           Designation; Amount and Issuance of Notes.  (a)  The Notes shall be designated as “3.00%
Exchangeable Senior Notes due 2015.”  The
aggregate principal amount of Original Notes which may be authenticated and
delivered under this Indenture is $600,000,000 (or $690,000,000 if the Initial
Purchasers exercise their over-allotment option in full in accordance with the
Purchase Agreement).  An unlimited
aggregate principal amount of Additional Notes may be issued from time to time
in accordance with Section 2.01(b). 
Upon the execution of this Indenture, or from time to time thereafter,
Notes may be executed by the Company and delivered to the Trustee for
authentication.

 

(b)           The Company shall be entitled, without notice to or the consent of the
Holders, to issue Additional Notes in an unlimited aggregate principal amount
under this Indenture with the same terms and with the same CUSIP numbers as the
Notes issued on the Issue Date, other than with respect to the date of issuance
and issue price; provided, however,
that no Additional Notes may be issued unless they will be fungible for U.S.
Federal income tax and securities law purposes with any other Notes issued
under this Indenture.  The Original Notes
issued on the Issue Date and any Additional Notes shall rank equally and
ratably and shall be treated as a single class for all purposes under this
Indenture.

 

With
respect to any Additional Notes issued after the Issue Date (except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 2.07, 2.08, 2.09,
2.10, 3.01(g), or 11.02(e)), there shall be 

 

16

 

(a) established
in or pursuant to a resolution of the Board of Directors of the Company and (b) (i) set
forth or determined in the manner provided in an Officers’ Certificate or
(ii) established in one or more indentures supplemental hereto, prior to
the issuance of such Additional Notes:

 

(1)           the aggregate principal amount of such
Additional Notes to be authenticated and delivered under this Indenture,

 

(2)           the issue price and issuance date of such
Additional Notes, including the date from which interest on such Additional
Notes shall accrue; and

 

(3)           if applicable, that such Additional Notes
shall be issuable in whole or in part in the form of one or more Global Notes
and, in such case, the respective depositaries for such Global Notes, the form
of any legend or legends which shall be borne by such Global Notes in addition
to or in lieu of those set forth in Exhibit A hereto and any circumstances
in which any such Global Note may be exchanged in whole or in part for
Additional Notes registered, or any transfer of such Global Note in whole or in
part may be registered, in the name or names of Persons other than the
depositary for such Global Note or a nominee thereof.

 

If
any of the terms of any Additional Notes are established by action taken
pursuant to a resolution of the Board of Directors of the Company, a copy of an
appropriate record of such action shall be certified by the Secretary or any
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers’ Certificate or the indenture supplemental hereto
setting forth the terms of the Additional Notes.

 

Section 2.02           Form, Dating and Denomination; Execution and
Authentication.  (a) The Notes and the Trustee’s
certificate of authentication shall each be substantially in the form of
Exhibit A hereto, which is hereby incorporated in and expressly made a
part of this Indenture.  The Notes may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company or the Guarantors are subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company).

 

(b)           Each Note shall be dated the date of its authentication.  The Notes shall be issuable only in
registered form without interest coupons and only in minimum denominations of
$1,000 and integral multiples of $1,000 in excess thereof.

 

So long as the Notes are eligible for
book-entry settlement with the Depositary, or unless otherwise required by law,
or otherwise contemplated by Section 2.08(b), all of the Notes will be
represented by one or more Notes in global form registered in the name of the
Depositary or the nominee of the Depositary (the “Global Notes”).  The
transfer and exchange of beneficial interests in any such Global Notes shall be
effected through the Depositary in accordance with this Indenture and the
applicable procedures of the Depositary. 
Except as provided in Section 2.07(b), beneficial owners of a
Global Note shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered Holders of such
Global Note.

 

17

 

Any Global Notes shall represent such of
the outstanding Notes as shall be specified therein and shall provide that it
shall represent the aggregate amount of outstanding Notes from time to time
endorsed thereon and that the aggregate amount of outstanding Notes represented
thereby may from time to time be increased or reduced to reflect purchases,
exchanges, transfers or exchanges permitted hereby.  Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the amount of outstanding Notes
represented thereby shall be made by the Trustee or the custodian for the
Global Note, at the direction of the Trustee, in such manner and upon instructions
given by the Holder of such Notes in accordance with this Indenture.  Payment of principal of, and interest on any
Global Notes shall be made to the Depositary in immediately available funds.

 

(c)           One
Officer 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 Trustee authenticates
the Note, the Note shall be valid nevertheless.

 

A
Note shall not be valid until an authorized signatory of the Trustee manually
signs the certificate of authentication on the Note.  The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.

 

The
Trustee shall authenticate and make available for delivery upon a written order
of the Company signed by one Officer (a) Original Notes for original issue
on the date hereof in an aggregate principal amount of $600,000,000 (or
$690,000,000 if the Initial Purchasers exercise their over-allotment option in
full in accordance with the Purchase Agreement), the principal amount of Notes
to be initially issued by the Company and authenticated by the Trustee shall be
set forth in the written order, and (b) subject to the terms of the
Indenture, Additional Notes in an aggregate principal amount to be determined
at the time of issuance and specified therein. 
Such order shall specify the amount of the Notes to be authenticated and
the date on which the original issue of Notes is to be authenticated.  Notwithstanding anything to the contrary in
the Indenture, any issuance of Additional Notes after the Issue Date shall be
in a principal amount of at least $1,000.

 

The
Notes will be resold only to QIBs in reliance on Rule 144A. The Notes may
thereafter be transferred only to QIBs. 
Notes shall be resold pursuant to Rule 144A and shall be issued
initially in the form of Restricted Global Notes, without interest coupons and
with the Global Notes Legend and the applicable Restricted Legend set forth in Exhibit A
hereto, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Notes Custodian and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as provided in this Indenture.

 

The
Trustee may appoint an authenticating agent reasonably acceptable to the
Company to authenticate the Notes.  Any
such appointment shall be evidenced by an instrument signed by a Trust Officer,
a copy of which shall be furnished to the Company.  Unless limited by the terms of such
appointment, 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 any Registrar, Paying Agent or agent for service of notices and
demands.

 

18

 

Section 2.03           Payment at
Maturity; Payment of Interest.

 

(a)           Payment at Maturity.  The Notes shall mature on June 1, 2015,
unless earlier exchanged or repurchased in accordance with the provisions
hereof.  On the Maturity Date, each
Holder shall be entitled to receive from the Company or its designee on such
date $1,000 in cash for each $1,000 principal amount of Notes.  With respect to Global Notes, principal and
interest will be paid to the Depositary or its nominee in immediately available
funds.  With respect to any certificated
Notes, principal will be payable at the Company’s office or agency in New York
City.

 

(b)           Payment of Interest.  Interest on the Notes will accrue at the rate
of 3.00% per annum.  Interest will accrue
from the most recent date to which interest has been paid or provided for, or,
if no interest has been paid or provided for, May 7, 2010.  Interest shall be payable semi-annually in
arrears on June 1 and December 1 of each year (each, an “Interest
Payment Date”), commencing December 1, 2010, to the Person in whose name
any Note is registered at 5:00 p.m., New York City time, on the relevant
Regular Record Date with respect to the applicable Interest Payment Date.

 

Interest on the Notes will be computed on
the basis of a 360-day year comprised of twelve 30-day months.

 

Payments in respect of the Notes
represented by a Global Note (including principal and interest) shall be made
by wire transfer of immediately available funds to the accounts specified by
The Depository Trust Company or any successor depositary.  The Company will make all payments in respect
of a certificated Note (including principal, and interest), at the office or
agency of the Paying Agent, except that, at the option of the Company, payment
of interest may be made by mailing a check to the registered address of each
Holder thereof; provided, however,
that payments on the Notes may also be made, in the case of a Holder of at
least $5,000,000 aggregate principal amount of Notes, by wire transfer to a
U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Registrar to such effect designating such account not later than
the relevant Regular Record Date, which application shall remain in effect
until the Holder provides written notice to the Registrar to the contrary.

 

If an Interest Payment Date falls on a
date that is not a Business Day, such payment of interest (and principal in the
case of the Maturity Date and Fundamental Change Purchase Price in the case of
a Fundamental Change Purchase Date) will be postponed until the next succeeding
Business Day, and no interest or other amounts will be paid as a result of any
such postponement.

 

Section 2.04           Registrar and Paying Agent.  (a)  The Company
shall maintain an office or agency where Notes may be presented for
registration of transfer or for exchange (the “Registrar”), an office or agency
where Notes may be presented for payment (the “Paying Agent”) and an office or
agency where the Notes may be surrendered for exchange (the “Exchange Agent”)
(which shall, in each case, be in the Borough of Manhattan, New York
City).  The Registrar shall keep a
register of the Notes (the “Register”) and of their transfer and exchange.  The Company may have one or more
co-registrars and one or more additional paying 

 

19

 

agents.  The term “Paying Agent” includes any
additional paying agent, and the term “Registrar” includes any
co-registrars.  The Company initially
appoints U.S. Bank National Association as (i) Registrar, Paying Agent and
Exchange Agent in connection with the Notes and (ii) the Notes Custodian
with respect to the Global Notes.

 

(b)           The agreement shall implement the provisions of this Indenture that
relate to such agent.  The Company shall
notify the Trustee of the name and address of any agent.  If the Company fails to maintain a Registrar,
Paying Agent or Exchange Agent, the Trustee shall act as such as an agent and
shall be entitled to appropriate compensation therefor pursuant to
Section 7.06.  The Company or any of
its Wholly Owned Subsidiaries may act as Paying Agent, Registrar or Exchange
Agent.

 

(c)           The Company may remove any Registrar, Paying Agent or Exchange Agent upon
written notice to such Registrar, Paying Agent or Exchange Agent and to the
Trustee; provided, however,
that no such removal shall become effective until (i) if applicable,
acceptance of an appointment by a successor as evidenced by an appropriate
agreement entered into by the Company and such successor Registrar, Paying
Agent or Exchange Agent, as the case may be, and delivered to the Trustee or
(ii) notification to the Trustee that the Trustee shall serve in an agency
capacity as Registrar, Paying Agent or Exchange Agent until the appointment of
a successor in accordance with clause (i) above.  The Registrar, Paying Agent or Exchange Agent
may resign at any time upon written notice to the Company and the Trustee;  provided, however, that the Trustee may resign as Paying Agent,
Registrar or Exchange Agent only if the Trustee also resigns as Trustee in
accordance with Section 7.07.

 

Section 2.05           Paying Agent to Hold Money in Trust.  Prior to each due date of
the principal of and interest on any Note, the Company shall deposit with the
Paying Agent (or if the Company or a Wholly Owned Subsidiary of the Company is
acting as Paying Agent, segregate and hold in trust for the benefit of the
Persons entitled thereto) a sum sufficient to pay such principal and interest
when so becoming due.  The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that the
Paying Agent shall hold in trust for the benefit of Holders or the Trustee all
money held by the Paying Agent for the payment of principal of and interest on
the Notes, and shall notify the Trustee of any default by the Company in making
any such payment.  If the Company or a
Wholly Owned Subsidiary of the Company acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund.  The Company at any time may require the Paying
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent.  Upon
complying with this Section 2.05, the Paying Agent shall have no further
liability for the money delivered to the Trustee.

 

Section 2.06           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.  If the
bank that is acting as Trustee is not the Registrar, the Company shall furnish,
or cause the Registrar to furnish, to the Trustee, in writing at least five
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.

 

20

 

Section 2.07           Exchange and
Registration of Transfer of Notes; Restrictions on Transfer.(a)         The Company shall cause to be kept at the Corporate Trust Office the
Register in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Notes and of transfers of
Notes. The Register shall be in written form or in any form capable of being
converted into written form within a reasonably prompt period of time.

 

Upon surrender for registration of
transfer of any Notes to the Registrar or any co-registrar, and satisfaction of
the requirements for such transfer set forth in this Section 2.07, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Notes of any
authorized denominations and of a like aggregate principal amount and bearing
such restrictive legends as may be required by this Indenture.

 

Notes may be exchanged for other Notes of
any authorized denominations and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at any such office or agency maintained
by the Company.  Whenever any Notes are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes that the Holder making the exchange is
entitled to receive bearing registration numbers not contemporaneously
outstanding.

 

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

 

All Notes presented or surrendered for
registration of transfer or for exchange, repurchase or exchange pursuant to Article XI
shall (if so required by the Company or the Registrar) be duly endorsed, or be
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company, and the Notes shall be duly executed by the Holder
thereof or his attorney duly authorized in writing.

 

No service charge shall be made to any
Holder for any registration of transfer or exchange of Notes, but the Company
or the Trustee may require payment by the Holder of a sum sufficient to cover any
tax, assessment or other governmental charge required by law or permitted by
this Indenture that may be imposed in connection with any registration of
transfer or exchange of Notes in the event a Holder requests any shares to be
issued in a name other than such Holder’s name.

 

Neither the Company nor the Trustee nor
any Registrar shall be required to exchange, issue or register a transfer or
exchange of (a) any Note or portions thereof surrendered for exchange
pursuant to Article XI or (b) any Note or portions thereof tendered
for repurchase (and not withdrawn) pursuant to Article III.

 

(b)           The following provisions shall apply only to Global Notes:

 

(i)            Each Global Note authenticated under this Indenture shall be registered
in the name of the Depositary or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian for the Global Notes therefor, and
each such Global Note shall constitute a single Note for all purposes of this
Indenture.

 

21

 

(ii)           Notwithstanding any other provision in this Indenture, no Global Note may
be exchanged in whole or in part for Notes registered, and no transfer of a
Global Note in whole or in part may be registered, in the name of any Person
other than the Depositary or a nominee thereof unless (A) the Depositary
(x) has notified the Company that it is unwilling or unable to continue as
Depositary for such Global Note and a successor depositary is not appointed
within 90 calendar days or (y) has ceased to be a clearing agency
registered under the Exchange Act, and a successor Depositary has not been
appointed by the Company within 90 calendar days, or (B) an Event of
Default in respect of the Notes has occurred and is continuing; or (C) the
Company, at its option, notifies the Trustee in writing that it no longer
wishes to have all the Notes represented by Global Notes.  Any Global Note exchanged pursuant to this Section 2.07(b)(ii) shall
be so exchanged in whole and not in part.

 

(iii)          In addition, certificated Notes will be issued in exchange for beneficial
interests in a Global Note upon request by or on behalf of the Depositary in
accordance with customary procedures following the request of a beneficial
owner seeking to enforce its rights under the Notes or this Indenture,
including its rights following the occurrence of an Event of Default.

 

(iv)          Notes issued in exchange for a Global Note or any portion thereof
pursuant to clause (ii) or (iii) above shall be issued in definitive,
fully registered form, without interest coupons, shall have an aggregate
principal amount equal to that of such Global Notes or portion thereof to be so
exchanged, shall be registered in such names and be in such authorized
denominations as the Depositary shall designate and shall bear any legends
required hereunder.  Any Global Notes to
be exchanged shall be surrendered by the Depositary to the Trustee, as
Registrar, provided that pending completion of the
exchange of a Global Note or upon the exchange of a portion of a Global Note,
the Trustee acting as custodian for the Global Note for the Depositary or its
nominee with respect to such Global Note, shall reduce the principal amount
thereof, by an amount equal to the portion thereof to be so exchanged, by means
of an appropriate adjustment made on the records of the Trustee.  Upon any such surrender or adjustment, the
Trustee shall authenticate and make available for delivery the Notes issuable
on such exchange to or upon the written order of the Depositary or an
authorized representative thereof.

 

(v)           In the event of the occurrence of any of the events specified in clause (ii) above
or upon any request described in clause (iii) above, the Company will
promptly make available to the Trustee a sufficient supply of certificated Notes
in definitive, fully registered form, without interest coupons.

 

(vi)          Neither any members of, or participants in, the Depositary (the “Agent
Members”) nor any other Persons on whose behalf Agent Members may act shall
have any rights under this Indenture with respect to any Global Notes
registered in the name of the Depositary or any nominee thereof, and the
Depositary or such nominee, as the case may be, may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner
and Holder of such Global Notes for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written 

 

22

 

certification,
proxy or other authorization furnished by the Depositary or such nominee, as
the case may be, or impair, as between the Depositary, its Agent Members and
any other Person on whose behalf an Agent Member may act, the operation of
customary practices of such Persons governing the exercise of the rights of a
Holder of any Notes.

 

(vii)         At
such time as all interests in a Global Note have been repurchased pursuant to Article III
or exchanged pursuant to Article XI, cancelled or exchanged for Notes in
certificated form, such Global Note shall, upon receipt thereof, be cancelled
by the Trustee in accordance with standing procedures and instructions existing
between the Depositary and the custodian for the Global Note.  At any time prior to such cancellation, if
any interest in a Global Note is repurchased pursuant to Article III or
exchanged pursuant to Article XI, cancelled or exchanged for Notes in
certificated form, the principal amount of such Global Note shall, in accordance
with the standing procedures and instructions existing between the Depositary
and the custodian for the Global Note, be appropriately reduced.

 

(c)           Every Note (and all securities issued in exchange therefor or in
substitution thereof) is required under this Section 2.07(c) to bear
the Restricted Legend (a “Restricted Global Note”) and shall be subject to the
restrictions on transfer set forth in this Section 2.07(c) and in the
Restricted Legend set forth in Exhibit A, and the holder of each such Restricted
Global Note, by such Holder’s acceptance thereof, agrees to be bound by all
such restrictions on transfer.

 

Every
share of OI Inc. Common Stock (and all securities issued in exchange therefore
or in substitution thereof) issued upon exchange of a Note in accordance with Article XI
is required under this Section 2.07(c) to bear the Restricted Legend
(the “Restricted OI Inc. Common Stock,” and together with the Restricted Global
Note, the “Restricted Securities”) and shall be subject to the restrictions on
transfer set forth in this Section 2.07(c) and in the Restricted
Legend set forth in Exhibit B, which is hereby incorporated in and
expressly made a part of this Indenture, and the holder of each such share of
Restricted OI Inc. Common Stock, by such holder’s acceptance thereof, agrees to
be bound by all such restrictions on transfer. Each Holder which exchanges
Notes for OI Inc. Common Stock will be deemed to have represented to the
Company and OI Inc. that it is a QIB.

 

As used in this Section 2.07(c),
the term “transfer” means any sale, pledge, loan, transfer or other disposition
whatsoever of any Restricted Security or any interest therein.

 

(d)           Until the date (the “Resale Restriction Termination Date”) that is the
later of (1) the date that is one year after the last date of issuance of
shares of OI Inc. Common Stock upon exchange and (2) such later date, if
any, as may be required by applicable laws, any certificate evidencing
Restricted OI Inc. Common Stock shall bear the Restricted Legend set forth in Exhibit B,
unless such Restricted OI Inc. Common Stock has been sold pursuant to a
registration statement that has been declared effective under the Securities
Act (and which continues to be effective at the time of such transfer) or sold
pursuant to Rule 144 under the Securities Act or any similar provision
then in force, or unless otherwise agreed by the Company in writing following
receipt of legal advice supporting the permissibility of the waiver of such
transfer restrictions, with written notice thereof to the Trustee.

 

23

 

(e)           In connection with any transfer of the Notes the Holder must complete and
deliver the form of assignment set forth on the certificate representing the
Note, with the appropriate box checked, to the Trustee (or any successor
Trustee, as applicable), including the certification, that such Holder is a QIB
and such Note is being transferred to a QIB in accordance with Rule 144A.

 

In connection with any
transfer of the OI Inc. Common Stock issued upon exchange, if any, prior to the
Resale Restriction Termination Date, the holder much complete and deliver the
form of assignment set forth in Exhibit B, the appropriate box checked, to
the transfer agent.

 

(f)            Any OI Inc. Common Stock issued upon exchange of the Notes as to which
such restriction on transfer shall have expired in accordance with their terms
may, upon surrender of certificates representing such shares of OI Inc. Common
Stock for exchange in accordance with the procedures of the transfer agent for
the OI Inc. Common Stock, be exchanged for a new certificate or certificates
for a like aggregate number of shares of OI Inc. Common Stock, which shall not
bear the Restricted Legend.

 

(g)           The Trustee shall have no responsibility or obligation to any Agent
Members or any other Person with respect to the accuracy of the books or
records, or the acts or omissions, of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Notes or with respect to the delivery to any Agent Member or other Person
(other than the Depositary) of any notice or the payment of any amount, under
or with respect to such Notes.  All
notices and communications to be given to the holders of Notes and all payments
to be made to holders of Notes under the Notes shall be given or made only to
or upon the order of the registered holders of Notes (which shall be the
Depositary or its nominee in the case of a Global Note).  The rights of beneficial owners in any Global
Notes shall be exercised only through the Depositary subject to the customary
procedures of the Depositary.  The
Trustee may rely and shall be fully protected in relying upon information
furnished by the Depositary with respect to its Agent Members.

 

(h)           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 Notes (including any transfers between or among Agent Members) 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.

 

Section 2.08           Replacement Notes.  If a mutilated Note is surrendered to the
Registrar 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 requirements of Section 8-405 of
the Uniform Commercial Code are met, such that the Holder (a) notifies the
Company or the Trustee within a reasonable time after such Holder has notice of
such loss, destruction or wrongful taking and the Registrar does not register a
transfer prior to receiving such notification, (b) makes such request to
the Company or the Trustee prior to the Note being acquired by a protected
purchaser as defined in Section 8-303 of the Uniform 

 

24

 

Commercial Code
(a “protected purchaser”) and (c) satisfies any other reasonable
requirements of the Company or the Trustee. 
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, the Paying Agent and the Registrar from any
loss that any of them may suffer if a Note is replaced.  The Company and the Trustee may charge the
Holder for their expenses in replacing a Note. 
In the event any such mutilated, lost, destroyed or wrongfully taken Note
has become or is about to become due and payable, the Company in its discretion
may pay such Note instead of issuing a new Note in replacement thereof.

 

Every
replacement Note is an additional obligation of the Company and the Guarantors.

 

The
provisions of this Section 2.08 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, lost, destroyed or wrongfully taken Notes.

 

Section 2.09           Outstanding Notes.  Notes outstanding at any time are all Notes
authenticated by the Trustee except for those canceled by it, those delivered
to it for cancellation and those described in this Section 2.09 as not
outstanding.  Subject to
Section 12.05, 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 2.08, it ceases to be outstanding
unless the Trustee and the Company receive proof satisfactory to them that the
replaced Note is held by a protected purchaser.

 

If
the Paying Agent segregates and holds in trust, in accordance with this
Indenture, on the maturity date money sufficient to pay all principal and
interest payable on that date with respect to the Notes (or portions thereof)
to be repurchased or maturing, as the case may be, and the Paying Agent is not
prohibited from paying such money to the Holders on that date pursuant to the
terms of this Indenture, then on and after that date, such Notes (or portions
thereof) cease to be outstanding and interest on them ceases to accrue.

 

Section 2.10           Temporary Notes.  In the event that certificated Notes are to
be issued under the terms of this Indenture, until such certificated Notes are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Notes.  Temporary Notes shall
be substantially in the form of certificated 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 certificated Notes and deliver them
in exchange for temporary Notes upon surrender of such temporary Notes at the
office or agency of the Company, without charge to the Holder.

 

Section 2.11           Cancellation.  The Company at any time may deliver Notes to
the Trustee for cancellation. The Company shall forward to the Trustee for
cancellation any Notes purchased by it. 
The Registrar, the Paying Agent and the Exchange Agent shall forward to
the Trustee any Notes surrendered to them for registration of transfer,
exchange or payment.  The Trustee and no
one else shall cancel all Notes surrendered for registration of transfer,
exchange, 

 

25

 

payment or
cancellation and shall dispose of canceled Notes in accordance with its
customary procedures or deliver canceled Notes to the Company pursuant to
written direction by an Officer.  The
Company may not issue new Notes to replace Notes it has repurchased, paid or
delivered to the Trustee for cancellation. 
The Trustee shall not authenticate Notes in place of canceled Notes
other than pursuant to the terms of this Indenture.

 

Section 2.12           Defaulted Interest.  If the Company defaults in a payment of
interest on the Notes and such default continues for a period of 30 calendar
days, the interest which is payable shall forthwith cease to be payable to the
Holder on the Regular Record Date and the Company shall pay the defaulted
interest (plus interest on such defaulted interest to the extent lawful) to the
Persons who are Holders on a subsequent special record date.  The Company shall fix or cause to be fixed
any such special record date and payment date to the reasonable satisfaction of
the Trustee and shall promptly mail or cause to be mailed to each Holder a
notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.

 

Section 2.13           CUSIP Numbers and ISINs.  The Company in issuing the Notes may use
CUSIP numbers and ISINs (if then generally in use) and, if so, the Trustee
shall use CUSIP numbers and ISINs in notices of repurchase as a convenience to
Holders; provided, however,
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a repurchase and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such repurchase shall not
be affected by any defect in or omission of such numbers.  The Company shall advise the Trustee of any
change in the CUSIP numbers or ISINs.

 

Section 2.14           Automatic Exchange from Restricted OI Inc. Common
Stock to Unrestricted OI Inc. Common Stock.

 

To
the extent there are any shares of Restricted OI Inc. Common Stock outstanding
on the Resale Restriction Termination Date, Restricted OI Inc. Common Stock,
shall be automatically exchanged on the Resale Restriction Termination Date
into an unrestricted stock certificate representing OI Inc. Common Stock that
is no longer subject to the restrictions set out in Section 2.07(c) (including
removal of the Restricted Legend) (the “Unrestricted OI Inc. Common Stock”),
without any action required by or on behalf of the holder (the “Automatic
Exchange”). In order to effect such exchange, the Company shall at least 15
days but not more than 30 days prior to the Resale Restriction Termination
Date, deliver a notice of Automatic Exchange (an “Automatic Exchange Notice”)
to each holder at such holder’s address appearing in the register maintained at
the registrar for OI Inc. Common Stock with a copy to the transfer agent for OI
Inc. Common Stock.  The Automatic
Exchange Notice shall identify the OI Inc. Common Stock subject to the
Automatic Exchange and shall state: (1) the date of the Automatic
Exchange; (2) the section of this Indenture pursuant to which the
Automatic Exchange shall occur; (3) the “CUSIP” number the Restricted OI
Inc. Common Stock from which such holders’ beneficial interests shall be
transferred and (4) the “CUSIP” number of the Unrestricted OI Inc. Common
Stock  into which such holders’
beneficial interests shall be transferred.

 

26

 

Article III

 

Purchases
Upon a Fundamental Change

 

Section 3.01           Purchase at Option of Holder Upon a Fundamental
Change.

 

(a)           Repurchase Option.  If a Fundamental Change occurs at any time, a
Holder will have the right, at its option, to require the Company to purchase
for cash any or all of its Notes, or any portion of the principal amount
thereof, that is equal to $1,000 or an integral multiple of $1,000.  The price the Company is required to pay is
equal to 100% of the principal amount of the Notes to be purchased plus accrued
and unpaid interest to, but excluding, the Fundamental Change Purchase Date
(the “Fundamental Change Purchase Price”); provided, however, that if the Fundamental Change Purchase Date is
after a Regular Record Date and on or prior to the Interest Payment Date to
which such Regular Record Date relates, the Company will instead pay the full
amount of accrued and unpaid interest to the Holder of record on such Regular
Record Date and the Fundamental Change Purchase Price shall not include such
accrued and unpaid interest.  The
Fundamental Change Purchase Date will be the date specified by the Company that
is not less than 20 or more than 35 Business Days following the date of the
Company’s Fundamental Change Notice.  Any
Notes purchased by the Company will be paid for in cash.

 

No
Notes may be purchased at the option of Holders upon a Fundamental Change if
the principal amount of the Notes has been accelerated, and such acceleration
has not been rescinded, on or prior to such date.

 

(b)           Notice of Fundamental Change.  On or before the 20th calendar
day after the occurrence of a Fundamental Change, the Company will provide to
all Holders, the Trustee and Paying Agent a notice (the “Fundamental Change
Notice”) of the occurrence of the Fundamental Change and of the resulting
purchase right.  Such notice shall state,
among other things:

 

(i)            the events causing a Fundamental Change;

 

(ii)           the effective date of the Fundamental Change, and whether the Fundamental
Change is a Make-Whole Fundamental Change, in which case the Effective Date of
the Make-Whole Fundamental Change;

 

(iii)          the last date on which a Holder may exercise the purchase right;

 

(iv)          the Fundamental Change Purchase Price;

 

(v)           the Fundamental Change Purchase Date;

 

(vi)          the name and address of the Paying Agent and the Exchange Agent;

 

(vii)         the
applicable Exchange Rate and any adjustments to the applicable Exchange Rate;

 

27

 

(viii)        that
the Notes with respect to which a Fundamental Change Purchase Notice has been
delivered by a Holder may be exchanged only if the Holder withdraws the
Fundamental Change Purchase Notice in accordance with the terms of this
Indenture or to the extent that portions of such Notes are not subject to such
Fundamental Change Purchase Notice; and

 

(ix)           the procedures that Holders must follow to require the Company to
purchase their Notes.

 

The
Company shall purchase Notes that have been validly surrendered for Purchase
and not withdrawn on the Fundamental Change Purchase Date.

 

Simultaneously
with providing the Fundamental Change Notice, the Company will issue a press
release (and make the press release available on its website).

 

No
failure of the Company to give the foregoing notices and no defect therein
shall limit the purchase rights of the Holders of Notes or affect the validity
of the proceedings for the purchase of the Notes pursuant to this Section 3.01.

 

(c)           Exercise of Purchase Option.  To exercise the Fundamental
Change repurchase option, a Holder must deliver, prior to 5:00 p.m., New
York City time, on the Business Day immediately preceding the Fundamental
Change Purchase Date, the Notes to be purchased, duly endorsed for transfer, if
certificated, together with a written purchase notice, if certificated, in the
form entitled “Form of Fundamental Change Purchase Notice” on the reverse
side of the Notes duly completed (the “Fundamental Change Purchase Notice”), to
the Paying Agent.  The Fundamental Change
Purchase Notice must state:

 

(i)            if certificated Notes have been issued, the certificate numbers of the
Holder’s Notes to be delivered for purchase;

 

(ii)           the portion of the principal amount of Notes to be purchased, which must
be $1,000 or an integral multiple thereof; and

 

(iii)          that the Notes are to be purchased by the Company pursuant to the
applicable provisions of the Notes and this Indenture.

 

If the Notes are not in certificated form, the Fundamental Change
Purchase Notice delivered by any Holder must comply with the appropriate
Depositary procedures.

 

(d)           Withdrawal of Purchase Notice.  Holders may withdraw any
Fundamental Change Purchase Notice (in whole or in part) by a written notice of
withdrawal delivered to the Paying Agent prior to 5:00 p.m., New York City
time, on the Business Day immediately preceding the Fundamental Change Purchase
Date.  The notice of withdrawal shall
state:

 

(i)            the principal amount of the withdrawn Notes;

 

(ii)           if certificated Notes have been issued, the certificate numbers of the
withdrawn Notes; and

 

28

 

(iii)          the principal amount, if any, which remains subject to the Fundamental
Change Purchase Notice.

 

If the Notes are not in certificated form, the Withdrawal
Notice delivered by any Holder must comply with the appropriate Depositary
procedures.

 

The
Paying Agent will promptly return to the respective Holders thereof any
certificated Notes with respect to which a Fundamental Change Purchase Notice
has been withdrawn in compliance with the provisions of this Section 3.01(d).

 

(e)           Effect of Fundamental Change Purchase Notice.  Upon receipt by the Paying Agent
of the Fundamental Change Purchase Notice specified in Section 3.01(c),
the Holder of the Note in respect of which such Fundamental Change Purchase
Notice was given shall (unless such Fundamental Change Purchase Notice is
withdrawn in accordance with Section 3.01(d)) thereafter be entitled to
receive solely the Fundamental Change Purchase Price in cash with respect to
such Note.  The Paying Agent shall pay
the Fundamental Change Purchase Price to such Holder, subject to receipt of
funds by the Company, promptly following the later of (i) the Fundamental
Change Purchase Date with respect to such Note (provided,  the conditions in Section 3.01(c) have been
satisfied) and (ii) the time of delivery or book-entry transfer of such
Note to the Paying Agent by the Holder thereof in the manner required by
Section 3.01(c).

 

(f)            Deposit of Fundamental Change Purchase Price.  Prior to 10:00 a.m., New
York City time, on the Fundamental Change Purchase Date, the Company shall
deposit with the Paying Agent (or, if the Company or a Wholly Owned Subsidiary
of the Company is acting as the Paying Agent, shall segregate and hold in trust
as provided herein) an amount of money (in immediately available funds if
deposited on such Business Day) sufficient to pay the Fundamental Change
Purchase Price of all the Notes or portions thereof that are to be purchased as
of the Fundamental Change Purchase Date. If the Paying Agent holds (or, if the
Company or a Wholly Owned Subsidiary of the Company is acting as the Paying
Agent, has segregated and holds in trust) cash or securities sufficient to pay
the Fundamental Change Purchase Price of the Notes for which a Fundamental
Change Purchase Notice has been tendered and not withdrawn in accordance with
this Indenture on the Fundamental Change Purchase Date, then as of such
Fundamental Change Purchase Date, (i) such Notes will cease to be outstanding
and interest will cease to accrue thereon (whether or not book-entry transfer
of such Notes is made or such Notes have been delivered to the Paying Agent)
and (ii) all other rights of the Holders in respect thereof will terminate
(other than the right to receive the Fundamental Change Purchase Price and
previously accrued and unpaid interest upon delivery or book-entry transfer of
such Notes in the event that the Fundamental Change Purchase Date is after a
Regular Record Date and on or prior to the Interest Payment Date to which it
relates).

 

(g)           Notes Purchased in Whole or in Part.  Any Note that is to be purchased,
whether in whole or in part, shall be surrendered at the office of the Paying
Agent (with, if the Company or the Trustee so requires in the case of
certificated Notes, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder’s attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Note, without 

 

29

 

service charge, a new Note
or Notes, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to, and in exchange for, the portion of the
principal amount of the Note so surrendered that is not purchased.

 

(h)           Covenant to Comply With Applicable Laws Upon
Purchase of Notes.  In connection with any offer to purchase
Notes under this Section 3.01, the Company shall, in each case if
required, (i) comply with Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act that may then be applicable, (ii) file
a Schedule TO or any successor or similar schedule if required under the
Exchange Act and (iii) otherwise comply with all federal and state
securities laws in connection with any offer by us to purchase the Notes so as
to permit the rights and obligations under this Section 3.01 to be
exercised in the time and in the manner specified in this Section 3.01.

 

(i)            Repayment to the Company.  To the extent that the aggregate amount of
cash deposited by the Company pursuant to Section 3.01(f) exceeds the
aggregate Fundamental Change Purchase Price of the Notes or portions thereof
that the Company is obligated to purchase as of the Fundamental Change Purchase
Date, then, following the Fundamental Change Purchase Date, the Paying Agent
shall promptly return any such excess to the Company.

 

(j)            The Company shall not be required to make an offer to purchase the Notes
upon a Fundamental Change if a third party makes such offer to purchase the
Notes upon a  Fundamental Change in the
manner, at the times and otherwise in compliance with the requirements set
forth in this Article III and purchases all Notes validly and not
withdrawn under such offer to purchase the Notes.

 

Article IV

 

Covenants

 

Section 4.01           Payment of Notes.

 

The Company shall promptly pay the
principal of and interest on the Notes on the dates and in the manner provided
in the Notes and in this Indenture. 
Principal and interest shall be considered paid on the date due if on
such date the Trustee or the Paying Agent holds in accordance with this
Indenture money in immediately available funds sufficient to pay all principal
and interest then due and the Trustee or the Paying Agent, as the case may be,
is not prohibited from paying such money to the Holders on that date pursuant
to the terms of this Indenture.

 

The Company shall pay interest on overdue
principal at the rate borne by the Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.

 

Section 4.02           Commission Reports.

 

Any documents or reports that (i) OI
Group is required to file with the SEC or furnish to the holders of notes
governed by any Senior Note Indenture pursuant to any Senior Note Indenture, or
(ii) OI Inc. is required to file with the SEC pursuant to Section 13
or 15(d) of

 

30

 

the Exchange Act, shall be furnished by OI
Group or OI Inc., as applicable, to the trustee and Holders, at their request,
within 15 calendar days after the same are required (pursuant to the Senior
Note Indentures or the Exchange Act, as the case may be) to be filed with the
SEC (in each case, giving effect to any grace period provided by Rule 12b-25
under the Exchange Act).  Documents filed
by OI Group or OI Inc., as applicable, with the SEC via the EDGAR system will
be deemed furnished to the trustee and the Holders as of the time such
documents are filed via EDGAR.

 

If
at any time OI Group or OI Inc. is not subject to the reporting requirements of
the Exchange Act, OI Group or OI Inc., as applicable, shall promptly furnish to
the Holders, beneficial owners and prospective purchasers of the Notes, upon
their request, the information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act to facilitate the resale of those Notes pursuant to Rule 144A
for so long as the Notes are outstanding.

 

(a)           The subsequent filing with the Trustee and, if applicable, the SEC of any
report required by Section 4.02(a) shall be deemed to automatically
cure any Default or Event of Default resulting from the failure to file such
report within the time period required by Section 4.02(a).

 

(b)           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 compliance with any
of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively (subject to Article VII) on Officers’ Certificates).

 

Section 4.03      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 Default and whether or not the signers know of any
Default that occurred during such period. 
If they do, the certificate shall describe the Default, its status and
what action the Company is taking or proposes to take with respect thereto.

 

Section 4.04      Notice of Defaults.

 

The Company shall deliver to the Trustee,
forthwith upon becoming aware of any Default or Event of Default, a statement
specifying such Default or Event of Default (the “Notice of Default”).  The Trustee may withhold from Holders,
notices of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest, including a
default arising from the Company’s failure to purchase any Notes when required
upon a Fundamental Change, or the failure to deliver, upon exchange, cash and
shares of OI Inc. Common Stock, if any), if it determines that withholding
notice in their interest.

 

31

 

Section 4.05      Registration Default Additional Interest.

 

(a)           If a Registration Default or Effective Default occurs under the
Registration Rights Agreement, the Company shall pay, as agreed in the
Registration Rights Agreement, Registration Default Additional Interest (in additional
to any Reporting Default Additional Interest), if any, on the Notes which shall
accrue until such Registration Default or Effective Default, as applicable, is
no longer continuing, at a rate equal to 0.25% per annum of the principal
amount of Notes outstanding for the first 90 days after such Registration
Default or Effective Default, as applicable, has occurred and is continuing,
which rate shall be increased by an additional 0.25% per annum following the
90th day after such Registration Default 
or Effective Default, as the case may be, is continuing, provided that
the rate at which such Registration Default Additional Interest under this Section 4.05(a) accrues
may in no event exceed 0.50% per annum. For the avoidance of doubt, no
Registration Default Additional Interest shall accrue following the expiration
of the time period during which OI Inc. is required to use commercially
reasonable efforts to keep a registration statement effective under the
Registration Rights Agreement.

 

(b)           Registration Default Additional Interest payable in accordance with
Section 4.05(a) shall be payable in arrears on each Interest Payment
Date following accrual in the same manner and to the same persons as regular
interest on the Notes.

 

(c)           If a Holder exchanges all or a portion of its Notes when there exists a
Registration Default or Effective Default with respect to the OI Inc. Common
Stock and any shares of OI Inc. Common Stock are due upon such exchange, the
Holder will not be entitled to receive Registration Default Additional
Interest, but the Exchange Rate will be increased by 3.00%.  If a Registration Default with respect to the
OI Inc. Common Stock occurs after a Holder has exchanged its Notes and received
OI Inc. Common Stock, such Holder will not be entitled to any compensation with
respect to such OI Inc. Common Stock.

 

Article V

 

Successor
Company or Successor Guarantor

 

Section 5.01      When the Company, OI Group or OI Inc. May Merge
or Transfer Assets.  None of the Company, OI Inc. or OI Group
shall, 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, unless:

 

(i)            either (a) the Company, OI Group or OI Inc., as applicable, is the
resulting, surviving or transferee Person; or (b) if the Company, OI
Group, or OI Inc., as applicable, is not the resulting, surviving or transferee
Person, the resulting, surviving or transferee Person (the “Successor Company”)
is a corporation organized and existing under the laws of the United States,
any state thereof or the District of Columbia and such corporation assumes all
the obligations of the Company, OI Group or OI Inc., as applicable, under the
Notes and the Indenture pursuant to a supplemental indenture and under the
Registration Rights Agreement pursuant to a supplemental agreement;

 

32

 

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

 

(iii)          the Company shall have delivered or caused to be delivered to the Trustee
an Officers’ Certificate and an Opinion of Counsel, each stating that such
transactions described above and such supplemental indenture (if any) comply
with this Indenture.

 

If the Company, OI Group or OI Inc., as
applicable, is not the resulting or surviving Person, upon any such
consolidation, merger or sale, assignment, conveyance, or transfer (other than
in the case of a lease), the Successor Company shall succeed to, and may
exercise every right and power of the Company, OI Group or OI Inc., as
applicable, under this Indenture.

 

(b)           No Guarantor shall sell or otherwise dispose of all or substantially all
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:

 

(i)            (a) either (1) such Guarantor is the resulting or surviving
Person; or (2) if such Guarantor is not the resulting or surviving person,
the resulting, surviving or transferee person (“Successor Guarantor”) is a
corporation or limited liability company organized and existing under the laws
of the United States, any state thereof or the District of Columbia and such
corporation or limited liability company assumes all the obligations of such
Guarantor under the Notes, the Guarantee and this Indenture pursuant to a
supplemental indenture; (b) immediately after giving effect to such
transaction, no Default or Event of Default has occurred and is continuing; and
(c) the Company shall have delivered or caused to be delivered to the
Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that
such transactions described above and such supplemental indenture (if any)
comply with this Indenture; or

 

(ii)           the transaction is made in compliance with the Credit Agreement and the
Senior Note Indentures.

 

If such Guarantor is not the resulting or
surviving Person, upon any such consolidation, merger or sale, assignment,
conveyance, or transfer, the Successor Guarantor shall succeed to, and may
exercise every right and power of, such Guarantor under this Indenture, and the
Guarantee of such Guarantor shall be automatically released under this
Indenture.

 

(c)           This Article V shall not apply to a merger or consolidation of the
Company, OI Group, 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.

 

Section 5.02      Assignment of Obligations On and after May 7, 2011, the Company may assign its
obligations under the Notes and this Indenture to OI Inc., and the Company and
each Guarantor, in its capacity as a Guarantor, would thereafter be released
from its obligations under the Notes, the Guarantees of the Notes and this
Indenture, provided that (a) OI
Inc. assumes all of the obligations under the Notes and this Indenture and (b) the
obligations of each 

 

33

 

domestic
borrower under the Credit Agreement have been or will be concurrently assumed
by OI Inc.

 

In the event of any such assignment, OI
Inc. shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under the Indenture with the same effect as if OI Inc.
had been named the Company herein, and restrictions imposed on and obligations
of OI Group in this Indenture shall become restrictions imposed on and
obligations of OI Inc., unless the context otherwise requires.

 

Article VI

 

Defaults
and Remedies

 

Section 6.01      Events of Default An
“Event of Default” occurs if:

 

(a)           the Company defaults for 30 days in the payment when due of interest on
the Notes;

 

(b)           the Company defaults in payment of principal of the Notes when due at
Stated Maturity, upon required purchase upon a Fundamental Change, by
acceleration or otherwise;

 

(c)           the Company fails to pay the cash portion of the Exchange Consideration
or OI Inc. fails to deliver the portion of the Exchange Consideration that
consists of shares of OI Inc. Common Stock (or cash in lieu of fractional
shares thereof), if any, in accordance with this Indenture upon exercise of a
Holder’s exchange right within five days after the due date thereof;

 

(d)           the Company fails to give a Fundamental Change Notice pursuant to Section 3.01(b),
a notice of a Make-Whole Fundamental Change pursuant to Section 11.03(g) or
notice of a specified corporate transaction as under Sections 11.01(c) or
(d), in each case when due;

 

(e)           the Company fails to comply with the provisions described under Article III;

 

(f)            the Company, OI Inc., OI Group or any of the other Guarantors fails to
comply with the provisions described under Article V;

 

(g)           the Company, OI Inc., OI Group or any of the other Guarantors fails for
60 days after notice to comply with any of the agreements in this Indenture
(other than an agreement or Default in whose performance or whose breach is
specifically dealt with in another clause), the Notes and the Guarantees of the
Notes (with respect to any Guarantor);

 

(h)           the Company defaults 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 of its Restricted
Subsidiaries (or the payment of which is 

 

34

 

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:

 

(i)        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

 

(ii)       results
in the acceleration of such Indebtedness prior to its express maturity;
provided, that an Event of Default will 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;

 

(i)            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;

 

(j)            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;

 

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

 

(i)        commences
a voluntary case;

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

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

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

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

 

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

 

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

 

(ii)       appoints
a Custodian of the Company, OI Inc., OI Group or any Significant Subsidiary of
OI Group or for all or substantially all of 

 

35

 

such
entity’s property; or orders the liquidation of the Company, OI Inc., OI Group
or any Significant Subsidiary of OI Group;

 

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

 

The
foregoing shall constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.

 

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

 

Section 6.02      Acceleration.If
an Event of Default (other than an Event of Default specified in
Section 6.01(k) or (l) with respect to the Company, OI Group, OI
Inc. or a Significant Subsidiary of OI Group) 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, and the Trustee at the request of such Holders shall, declare 100% of the
principal of and accrued but unpaid interest on all the Notes to be due and
payable, provided, however,
that the Trustee shall be held harmless with respect to any such declaration at
the request of such Holders.  Upon such a
declaration, such principal and interest shall be due and payable immediately.  If an Event of Default specified in
Section 6.01(k) or (l) with respect to the Company, OI Group, OI
Inc. or a Significant Subsidiary of OI Group occurs, 100% of the principal of
and interest on all the Notes shall ipso facto become and be immediately due
and payable without any declaration, other act or notice on the part of the
Trustee or any Holders.

 

Section 6.03      Other Remedies.If
an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal of 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.  No remedy is
exclusive of any other remedy.  All
available remedies are cumulative.

 

Section 6.04      Waiver of Past Defaults.The
Holders of a majority in aggregate principal amount of the then outstanding
Notes by notice to the Trustee may, on behalf of all Holders of all of the
Notes (1) waive any existing Default or Event of Default and its
consequences under the Indenture except (a) a continuing Default or Event
of Default in the payment of the principal of or interest, including a Default
arising from a failure to purchase any Notes when required upon a Fundamental
Change, on a Note or (b) a Default with respect to the Company’s failure
to deliver upon exchange the cash portion of the Exchange Consideration or OI
Inc.’s failure to deliver upon exchange the portion of the Exchange
Consideration that consists of shares of OI Inc. Common Stock, if any, and (2) rescind
any such acceleration with 

 

36

 

respect to the
Notes and its consequences, including any related payment default that resulted
from such acceleration, if:

 

(a)           rescission would not conflict with any judgment or decree of a court of
competent jurisdiction; and

 

(b)           all existing Events of Default, other than the nonpayment of the
principal or/and interest on the Notes that have become due solely by such
declaration of acceleration have been cured and waived.

 

When a Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
impair any consequent right.

 

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 of exercising any trust or power conferred on the
Trustee.  However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture or, subject
to Section 7.01, that the Trustee determines is unduly prejudicial to the
rights of any other Holder or that would involve the Trustee in personal
liability; provided, however,
that the Trustee may take any other action deemed proper by the Trustee that is
not inconsistent with such direction. 
Prior to taking any action under this Indenture, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.

 

Section 6.06      Limitation on Suits.
(a) Except to enforce the right to receive payment of principal or
interest when due, or the right to receive payment or delivery of the
consideration due upon exchange, no Holder may pursue any remedy with respect
to this Indenture or the Notes or any Guarantee unless:

 

(i)            the Holder has previously given to the Trustee written notice stating
that an Event of Default is continuing;

 

(ii)           the Holders of at least 25% in principal amount of the Notes have made a
written request to the Trustee to pursue the remedy;

 

(iii)          such Holder or Holders have offered to the Trustee indemnity satisfactory
to it against any loss, liability or expense;

 

(iv)          the Trustee has not complied with the request within 60 days after
receipt of the request and the offer of security or indemnity; and

 

(v)           the Holders of a majority in principal amount of the Notes have not given
the Trustee a direction that, in the opinion of the Trustee, is inconsistent
with the request during such 60-day period.

 

(b)           A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.

 

37

 

Section 6.07      Rights of Holders to Receive Payment.  (a) Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Notes held by such Holder on or
after the respective due dates expressed or provided for in the Notes, 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 such Holder.  In addition, notwithstanding any other
provision of this Indenture, the right of any Holder to enforce its rights of
exchange in accordance with the provisions of Article XI, on or after the
applicable date for settlement of the Exchange Obligation of the Company and OI
Inc., shall not be impaired or affected without the consent of such Holder.

 

(b)  Notwithstanding any other
provision of this Indenture, OI Inc.’s only obligation in connection with a
Holder’s exercise of its exchange rights under this Indenture is to deliver the
portion of the Exchange Consideration that consists of shares of OI Inc. Common
Stock.  As a result, in the case of any
failure to deliver the Exchange Consideration to an exchanging Holder upon such
Holder’s exercise of its exchange rights under this Indenture, such Holder’s
only claim with respect to OI Inc. would be for the portion of the Exchange
Consideration that consists of shares of OI Inc. Common Stock (or cash in lieu
of a fractional share of OI Inc. Common Stock), and such Holder’s only claim
with respect to the Company would be for the portion of the Exchange
Consideration that consists of cash (other than any portion that corresponds to
a fractional share of OI Inc. Common Stock).

 

Section 6.08      Collection Suit by Trustee.  If an Event of Default
specified in Section 6.01(a) or (b) occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an express
trust against the Company or any other obligor on the Notes for the whole
amount then due and owing (together with interest on overdue principal and (to
the extent lawful) on any unpaid interest at the rate provided for in the
Notes) and the amounts provided for in Section 7.06.

 

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 the Guarantor, their creditors
or their property and, unless prohibited by law or applicable regulations, may
vote on behalf of the Holders in any election of a trustee in bankruptcy or
other Person performing similar functions, and any Custodian in any such
judicial proceeding is hereby authorized by each Holder to make 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 it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and its counsel, and any other amounts due the Trustee
under Section 7.06.

 

Section 6.10      Priorities.  If the Trustee collects any money or property
pursuant to this Article VI, it shall pay out the money or property in the
following order:

 

FIRST:  to the Trustee for
amounts due under Section 7.06;

 

38

 

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.

 

The
Trustee may fix a record date and payment date for any payment to Holders
pursuant to this Section 6.10.  At
least 15 days before such record date, the Trustee shall mail to each
Holder and the Company a notice that states the record date, the payment date
and amount to be paid.

 

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 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 and expenses, against any party litigant
in the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. 
This Section 6.11 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 Notes.

 

Section 6.12      Waiver of Stay or Extension Laws. Neither the Company nor the Guarantor (to the extent it may
lawfully do so) shall at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company and the
Guarantor (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been
enacted.

 

Section 6.13      Failure to Comply with Reporting Covenant.  Notwithstanding anything
to the contrary in this Indenture, to the extent that the Company elects, the
sole remedy for an Event of Default relating to OI Group or OI Inc.’s failure
to perform or observe the covenant in Section 4.02(a) will, for the
365 days after the occurrence of such an Event of Default (which will be the
60th day after the written notice is provided to the Company in accordance with
Section 6.01(g)), consist exclusively of the right to receive additional
interest (the “Reporting Default Additional Interest”) on the Notes at a rate
equal to 0.25% per annum of the outstanding principal amount of the Notes
outstanding for each day during the 180-day period beginning on, and including,
the occurrence of such an Event of Default during which such Event of Default
is continuing in such 365 day period, and which such Reporting Default
Additional Interest will be increased to 0.50% per annum of the then
outstanding aggregate principal amount of the Notes, for the remaining 185 days
after such Event of Default is continuing for such 365 day period, provided
that the rate at which such Reporting Default Additional Interest accrues may
in no event exceed 0.50% per annum.  If
the Company so elects, such Reporting Default Additional Interest (in addition
to any Registration Default Additional Interest) will be payable in arrears in
the same manner and on the same Interest Payment Dates as the stated interest
payable on the Notes.  On the 366th day
after the occurrence of such Event of Default (if the Event of Default is not
cured or waived prior to such 366th day), such 

 

39

 

Reporting
Default Additional Interest will cease to accrue and the Notes will be subject
to acceleration as provided in Section 6.02.  The provisions of this Section 6.13 will
not affect the rights of Holders in the event of the occurrence of any other
Event of Default.

 

In the event the Company does not elect to
pay the Reporting Default Additional Interest following an Event of Default in
accordance with this Section 6.13, the Notes will be subject to
acceleration as provided in Section 6.02. 
For the avoidance of doubt, in the event Registration Default Additional
Interest is also triggered pursuant to Section 4.05, the interest rate
applicable to the Notes under such Section 4.05 shall also apply to the
Notes.  In order to elect to pay the Reporting
Default Additional Interest as the sole remedy during the first 365 days after
the occurrence of an Event of Default relating to OI Group’s or OI Inc.’s
obligations pursuant to Section 4.02(a), the Company must notify the
Holders and the Trustee and Paying Agent of such election, and make the notice
available on the Company’s website, on or before 5:00 p.m., New York City
time, on the fifth Business Day after the date on which such Event of Default
otherwise would occur.  Upon the Company’s
failure to timely give such notice, the Notes will be immediately subject to
acceleration as provided in Section 6.02.

 

Article VII

 

Trustee

 

Section 7.01      Duties of Trustee.  (a)  If an Event of Default has occurred
and is continuing, the Trustee shall exercise 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 person would exercise or use under the circumstances in
the conduct of such person’s own affairs.

 

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

 

(i)            the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture 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, in the case of certificates or
opinions required by any provision hereof to be provided to it, the Trustee
shall examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein).

 

(c)           The Trustee may not be relieved from liability for its own grossly
negligent action, its own grossly 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;

 

40

 

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

 

(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; and

 

(iv)          no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers.

 

(d)           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)           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.

 

(f)            Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.

 

(g)           Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section 7.01.

 

Section 7.02      Rights of Trustee.  (a)  The Trustee may conclusively rely
on any document believed by it to be genuine and to have been signed or
presented by the proper person.  The
Trustee need not investigate any fact or matter stated in the document.

 

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

 

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

 

(d)           The Trustee shall not be liable for any action it takes or omits to take
in good faith which it believes to be authorized or within its rights or
powers.

 

(e)           The Trustee may consult with counsel of its own selection and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability in respect of any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.

 

(f)            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, consent, order, approval, bond, debenture,
note or other paper or document unless 

 

41

 

requested in writing to do
so by the Holders of not less than a majority in principal amount of the Notes
at the time outstanding and indemnified in connection therewith, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney,
at the expense of the Company and shall incur no liability of any kind by reason
of such inquiry or investigation.

 

(g)           The Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any of the
Holders pursuant to this Indenture, unless such Holders shall have offered to
the Trustee indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which might be incurred by it in compliance with such request
or direction.

 

(h)           The rights, privileges, protections, immunities and benefits given to the
Trustee, including its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each
agent, custodian and other Person employed to act hereunder.

 

(i)            The recitals contained herein are made by the Company and not by the
Trustee and neither the Trustee nor the Exchange Agent or Paying Agent assumes
any responsibility for the correctness thereof. 
The Trustee makes no representation as to the validity or sufficiency of
this Indenture or the OI Inc. Common Stock, the Daily VWAP, the Guarantee, the
Notes, any Stock Price, any Trading Price, or any calculations performed by the
Company.

 

(j)            In no event shall the Trustee, the Exchange Agent or the Paying Agent be
responsible or liable for any failure or delay in the performance of its
obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware)
services; it being understood that the Trustee, the Exchange Agent or the
Paying Agent shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable
under the circumstances.

 

(k)           In no event shall the Trustee be responsible or liable for special,
indirect, or consequential loss or damage of any kind whatsoever (including,
but not limited to, loss of profit) irrespective of whether the Trustee has
been advised of the likelihood of such loss or damage and regardless of the
form of action.

 

(l)            Any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a written order of the Company and any resolution of
the Board of Directors may be sufficiently evidenced by a resolution of the
Board of Directors.

 

(m)          The rights, privileges, protections, immunities and benefits given to the
Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, U.S. Bank National Association in
each of its capacities hereunder, and each 

 

42

 

agent, custodian and other
Person employed to act hereunder, except that under no circumstances shall the
Exchange Agent or the Paying Agent be deemed to owe any fiduciary duty to the
Company, the Guarantor, or the Holders.

 

(n)           The Trustee may request that the Company and the Guarantor each deliver a
certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to the Indenture.

 

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 its Affiliates with the same rights it
would have if it were not Trustee.  Any
Paying Agent or Registrar may do the same with like rights.  However, the Trustee must comply with Section 7.09.

 

Section 7.04      Trustee’s Disclaimer.  The Trustee shall not be responsible for and
makes no representation as to the validity or adequacy of this Indenture, any
Guarantee or the Notes, shall not be accountable for the Company’s use of the
proceeds from the Notes, and it shall not be responsible for any statement of
the Company or the Guarantor in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee’s
certificate of authentication.  The
Trustee shall not be charged with knowledge of any Default or Event of Default
under Sections 6.01(c), (d), (e), (f), (g), (h), (i), (j), (k) or (l) or
of the identity of any Significant Subsidiary unless a Trust
Officer of the Trustee shall have received written notice thereof in
accordance with Section 12.01 from the Company, the Guarantor or any
Holder referencing this Indenture and the specific Default or Event of Default.

 

Section 7.05      Notice of Defaults.  If a Default or Event of Default occurs and
is continuing and if in the case of an Event of Default specified in Section 6.01(a) or
(b) it is actually known to the Trustee, or otherwise, if the Trustee has
received written notice thereof, the Trustee shall mail to each Holder notice
of the Default within the earlier of 90 days after it occurs or
30 days after it is actually known to a Trust Officer in the event of a
payment default under Section 6.01(a) or 6.01(b) or written
notice of it is received by a Trust Officer of the Trustee.  Except in the case of a Default in the
payment of principal of, premium (if any) or interest on any Note or a default
in the payment or delivery of the consideration due upon exchange, the Trustee
may withhold the notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the interests of the
Holders.

 

Section 7.06      Compensation and Indemnity.  The Company shall pay to
the Trustee from time to time reasonable compensation for its services.  The Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust.  The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its
services.  Such expenses shall include
the reasonable compensation and expenses, disbursements and advances of the
Trustee’s agents, counsel, accountants and experts.  The Company and the Guarantor, jointly and
severally, shall indemnify the Trustee (which, for the purposes of this Section 7.06,
shall include its directors, officers, employees and agents) against any and
all loss, liability, claim, damage or expense (including reasonable attorneys’
fees and expenses) incurred by or in connection with the administration of this
trust and the performance of its duties hereunder.  The 

 

43

 

Trustee shall notify
the Company of any claim for which it may seek indemnity promptly upon
obtaining actual knowledge thereof; provided, however, that any failure so to notify the Company
shall not relieve the Company or the Guarantor of its indemnity obligations
hereunder.  The Company shall defend the
claim and the indemnified party shall provide reasonable cooperation at the
Company’s expense in the defense.  Such
indemnified parties may have separate counsel and the Company and the
Guarantor, as applicable, shall pay the fees and expenses of such counsel; provided, however, that
the Company shall not be required to pay such fees and expenses if it assumes
such indemnified parties’ defense and, in such indemnified parties’ reasonable
judgment, there is no conflict of interest between the Company and the
Guarantor, as applicable, and such parties in connection with such
defense.  The Company need not reimburse
any expense or indemnify against any loss, liability or expense incurred by an
indemnified party solely attributable to such party’s own willful misconduct,
gross negligence or bad faith.

 

To
secure the Company’s payment obligations in this Section 7.06, the Trustee
shall have a lien prior to the Notes on all money or property held or collected
by the Trustee other than money or property held in trust to pay principal of
and interest on particular Notes or to pay or deliver the consideration due
upon exchange.

 

The
Company’s payment and indemnity obligations pursuant to this Section 7.06
shall also extend to the Registrar, Paying Agent and Exchange Agent hereunder,
and survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any bankruptcy law or the resignation or
removal of the Trustee.  Without
prejudice to any other rights available to the Trustee under applicable law,
when the Trustee incurs expenses after the occurrence of a Default specified in
Section 6.01(h) or (i) with respect to the Company, the expenses
are intended to constitute expenses of administration under the Bankruptcy Law.

 

Section 7.07      Replacement of Trustee.  (a)  The Trustee may resign at any time
by so notifying the Company.  The Holders
of a majority in principal amount of the Notes may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee.  The Company shall remove the Trustee if:

 

(i)            the Trustee fails to comply with Section 7.09;

 

(ii)           the Trustee is adjudged bankrupt or insolvent;

 

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

 

(iv)          the Trustee otherwise becomes incapable of acting.

 

(b)           If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the Notes and such Holders do not reasonably
promptly appoint a successor Trustee, or if a vacancy exists in the office of
Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Company shall promptly appoint a successor Trustee.

 

44

 

(c)           A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. 
Thereupon 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.  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 7.06.

 

(d)           If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Notes may petition at the expense of the Company
any court of competent jurisdiction for the appointment of a successor Trustee.

 

(e)           If the Trustee fails to comply with Section 7.09, unless the Trustee’s
duty to resign is stayed as provided in Section 310(b) of the TIA,
any Holder who has been a bona fide holder of a Note for at least six months
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

 

(f)            Notwithstanding the replacement of the Trustee pursuant to this Section 7.07,
the Company’s obligations under Section 7.06 shall continue for the
benefit of the retiring Trustee.

 

Section 7.08      Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business or assets
to, another corporation or banking association, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee.

 

In
case, at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture, any of the Notes shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication
of any predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee may authenticate such Notes either in the name of any
predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which is anywhere in
the Notes or in this Indenture provided that the certificate of the Trustee
shall have.

 

Section 7.09      Eligibility; Disqualification.  The Trustee shall at all
times satisfy the requirements of Section 310(a) of the TIA.  The Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition.  The Trustee
shall comply with Section 310(b) of the TIA, subject to its right to
apply for a stay of its duty to resign under the penultimate paragraph of
Section 310(b) of the TIA; provided, however, that there shall be excluded from the operation of
Section 310(b)(1) of the TIA any indenture or indentures under which
other Notes or certificates of interest or participation in other Notes of the
Company are outstanding if the requirements for such exclusion set forth in
Section 310(b)(1) of the TIA are met.

 

45

 

Article VIII

 

Discharge
of Indenture

 

Section 8.01      Discharge of Liability on Notes.  (a)  When
(i) all outstanding Notes (other than Notes replaced or paid pursuant to
Section 2.08) have been canceled or delivered to the Trustee for
cancellation or (ii) all outstanding Notes have become due and payable,
whether at Stated Maturity or as a result of receipt of Fundamental Change
Purchase Notices or upon exchange or otherwise in respect of all outstanding
Notes and the Company irrevocably deposits with the Trustee funds in an amount
sufficient to pay the principal of and interest on the outstanding Notes when
due at Stated Maturity or upon any Fundamental Change Purchase Date, including
interest thereon to the Maturity Date or Fundamental Change Purchase Date
(other than Notes replaced or paid pursuant to Section 2.08), and/or the
cash portion of the Exchange Consideration and OI Inc. has deposited the
applicable number of shares of OI Inc. Common Stock, if any, and if in each case
the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 8.01(b), cease to be of further
effect.  The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company accompanied
by an Officers’ Certificate and an Opinion of Counsel and at the cost and
expense of the Company.

 

Upon
satisfaction of the conditions set forth herein and upon request of the
Company, the Trustee shall acknowledge in writing the discharge of those obligations
that the Company terminates.

 

(b)           Notwithstanding clauses (a) above, the Company’s obligations in
Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 7.06, 7.07 and in this Article VIII
shall survive until the Notes have been paid in full.  Thereafter, the Company’s obligations in
Sections 7.06, 8.05 and 8.06 shall survive such satisfaction and discharge.

 

Section 8.02      Application of Trust Money.  The Trustee shall hold in
trust money or any shares of OI Inc. Common Stock due in respect of exchanged
Notes deposited with it pursuant to this Article VIII.  It shall apply the deposited money through
the Paying Agent and in accordance with this Indenture to the payment of
principal of and interest on the Notes or, in the case of any shares of OI Inc.
Common Stock in respect of exchanged Notes, in accordance with this Indenture
in relation to the exchange of Notes pursuant to the terms hereof

 

Section 8.03      Repayment to Company.  Each of the Trustee and the Paying Agent
shall promptly turn over to the Company upon request any money or to OI Inc.
upon request any shares of OI Inc. Common Stock due in respect of exchanged
Notes held by it as provided in this Article VIII are in excess of the
amount thereof which would then be required to be deposited to effect an equivalent
discharge in accordance with this Article VIII.

 

Subject
to any applicable abandoned property law, the Trustee and the Paying Agent
shall pay to the Company and OI Inc., as applicable, upon written request any
money held by them for the payment of principal or interest or any shares of OI
Inc. Common Stock due in respect of exchanged Notes that remains unclaimed for
two years, and, thereafter, Holders entitled to the money or any shares of OI
Inc. Common Stock due in respect of exchanged Notes 

 

46

 

must
look to the Company for payment as general creditors, and the Trustee and the
Paying Agent shall have no further liability with respect to such monies or
shares of OI Inc. Common Stock due in respect of exchanged Notes.

 

Section 8.04      Reinstatement.  If the Trustee or Paying Agent is unable to
apply any money or any shares of OI Inc. Common Stock or other property due in
respect of exchanged Notes in accordance with this Article VIII by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company’s and Guarantor’s obligations under this Indenture,
and OI Inc.’s obligations under this Indenture with respect to delivering the
portion of the Exchange Consideration that consists of shares of OI Inc. Common
Stock and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to this Article VIII until such time as the Trustee or
Paying Agent is permitted to apply all such money or any shares of OI Inc.
Common Stock or other property due in respect of exchanged Notes in accordance
with this Article VIII; provided, however, that, if the Company has made any payment of
principal of or interest on any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.

 

Article IX

 

Amendments
and Waivers

 

Section 9.01      Without Consent of Holders.  The Company, the
Guarantors and the Trustee may amend this Indenture or the Notes without notice
to or consent of any Holder:

 

(i)            cure any ambiguity, omission, defect or inconsistency in this Indenture
or the Notes in a manner that does not adversely affect the rights of any
Holder;

 

(ii)           provide for the assumption by a Successor Company or Successor Guarantor,
as the case may be, of the obligations of the Company, OI Inc., OI Group or the
other Guarantors under Article V;

 

(iii)          provide for the assumption of the obligations of the Company and the
Guarantors to Holders of the Notes by OI Inc. in accordance with Article V
and Section 11.05;

 

(iv)          add additional Guarantees with respect to the Notes;

 

(v)           secure the Notes;

 

(vi)          add to the covenants of the Company, the Guarantors or OI Inc. or the
benefit of the Holders or surrender any right or power conferred upon the
Company, the Guarantors or OI Inc.;

 

(vii)         make
any change that does not adversely affect the rights of any Holder;

 

(viii)        appoint
a successor Trustee with respect to the Notes;

 

47

 

(ix)           comply with any requirement of the SEC in connection with the
qualification of this Indenture under the Trust Indenture Act; or

 

(x)            conform the provisions of this Indenture to the “Description of Notes”
section in the Offering Memorandum, as supplemented by the pricing term sheet.

 

After
an amendment under this Section 9.01 becomes effective, the Company shall
mail to Holders a notice briefly describing such amendment and make such notice
available on the Company’s website.  The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.01.

 

Section 9.02      With Consent of Holders.  The Company, the Guarantors and the Trustee
may amend this Indenture or the Notes without notice to any Holder but with the
written consent of the Holders of at least a majority in aggregate 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, the Notes).  However, without the
consent of each Holder affected, an amendment may not:

 

(i)            reduce the percentage in aggregate principal amount of Notes whose
Holders must consent to an amendment of this Indenture or to waive any past
Default;

 

(ii)           reduce the rate of, or extend the stated time for, payment of interest on
any Note;

 

(iii)          reduce the principal amount, or extend the Maturity Date, of any Note;

 

(iv)          make any change that impairs or otherwise adversely affects the exchange
rights of any Notes;

 

(v)           reduce the Fundamental Change Purchase Price of any Note or amend or
modify in any manner adverse to the Holders of Notes the Company’s obligation
to make such payments, whether through an amendment or waiver of provisions in
the covenants, definitions or otherwise;

 

(vi)          make any Note payable in a currency other than that stated in the Note;

 

(vii)         other
than in accordance with the provisions of this Indenture release any Guarantor
from any of its obligations under its Guarantee of the Notes;

 

(viii)        impair
the right of any Holder to receive payment of principal of and interest on such
Holder’s Notes on or after the due dates therefor, the right to receive payment
or delivery of the Exchange Consideration due upon exchange, or to institute
suit for the enforcement of any payment on or with respect to such Holder’s
Notes; or

 

(ix)           make any change in the amendment or waiver provisions of the Indenture.

 

48

 

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, but
it shall be sufficient if such consent approves the substance thereof.

 

After
an amendment under this Section 9.02 becomes effective, the Company shall
mail to Holders a notice briefly describing such amendment and make such notice
available on the Company’s website.  The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.02.

 

Section 9.03      Revocation and Effect of Consents and Waivers.  (a)  A consent to an
amendment or a waiver by a Holder of a Note shall bind the Holder and every
subsequent Holder of that Note or portion of the Note that evidences the same
debt as the consenting Holder’s Note, even if notation of the consent or waiver
is not made on the Note.  However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder’s Note or portion of the Note if the Trustee receives the notice of
revocation before the date on which the Trustee receives an Officers’
Certificate from the Company certifying that the percentage of consents have
been received.  After an amendment or
waiver becomes effective, it shall bind every applicable Holder.  An amendment or waiver becomes effective upon
the receipt by the Company or the Trustee of the requisite percentage of
consents.

 

(b)           The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to give their consent or take any
other action described above or required or permitted to be taken pursuant to
this Indenture.  If a record date is
fixed, then notwithstanding the immediately preceding paragraph, those Persons
who were Holders at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such
Persons continue to be Holders after such record date.  No such consent shall be valid or effective
for more than 120 days after such record date.

 

Section 9.04      Notation on or Exchange of Notes.  If an amendment changes
the terms of a Note, the Trustee may require the Holder of the Note to deliver
it to the Trustee.  The Trustee may place
an appropriate notation on the Note regarding the changed terms and return it
to the Holder.  Alternatively, 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.  Failure to make the
appropriate notation or to issue a new Note shall not affect the validity of
such amendment.

 

Section 9.05      Trustee to Sign Amendments.  The Trustee shall sign any
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the
Trustee.  If it does, the Trustee may,
but need not, sign it.  In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and shall be provided with, and (subject to
Section 7.01) shall be fully protected in relying upon, an Officers’
Certificate and an Opinion of Counsel stating that such amendment is authorized
or permitted by this Indenture and that such amendment is the legal, valid and
binding obligation of the Company and the Guarantor enforceable against them in
accordance with its terms, subject to customary exceptions, and complies with
the provisions hereof.

 

49

 

Article X

 

Guarantees

 

Section 10.01    Guarantees.
Subject to the provisions of this Article X, the Guarantors hereby,
jointly and severally, fully and unconditionally, guarantee (the “Guarantee”)
to each Holder and to the Trustee and its successors and assigns (x) the
due and punctual payment of principal of and interest on the Notes whether at
Stated Maturity, by acceleration or otherwise, and all other monetary
obligations of the Company under this Indenture (including obligations to the
Trustee) with respect to the Notes on a senior unsecured basis and (y) 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 X 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 X 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 X), the Notes or any other agreement,
unless such rescission, waiver, amendment, modification or supplement expressly
affects the obligations of any Guarantor under this Section 10.01;

 

(d) the release of any
security held by any Holder or the Trustee for the Obligations or any of them;

 

(e) the failure of any Holder
or Trustee to exercise any right or remedy against any other guarantor of the
Obligations; or

 

(f) any change in the
ownership of the Company.

 

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

 

50

 

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 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, (w) the maturity of the Obligations guaranteed hereby may be
accelerated as provided in Article VI 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 (x) in
the event of any declaration of acceleration of such Obligations as provided in
Article VI, 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.

 

51

 

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 Guarantees.

 

To
evidence its Guarantee set forth in Section 10.01, each Guarantor hereby
agrees 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 the absence of the
endorsement or any notation of such Guarantee on the Notes.

 

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

 

The
delivery of any Note to which this Article X 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 X 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 X shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise of any right, power or privilege.  The rights, remedies and benefits of the
Trustee and the Holders herein expressly specified are cumulative and not
exclusive of any other rights, remedies or benefits which either may have under
this Article X 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 10.06.  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 

 

52

 

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 direct or indirect Domestic Subsidiary of OI Group that
guarantees the Company’s Indebtedness under the Credit Agreement, including the
reinstatement or renewal of a guarantee of Indebtedness under the Credit
Agreement previously released under the Credit Agreement, to execute and
deliver a supplement to this Indenture providing that such Domestic Subsidiary
will be a Guarantor hereunder and deliver an Opinion of Counsel to the Trustee
within 10 Business Days of the date on which it executes a Guarantee under the
Credit Agreement.  Domestic Subsidiaries
that are Guarantors on the date any such supplement is executed by an
additional Domestic Subsidiary shall not be required to become parties to such
supplement and hereby agree to the execution and delivery by any additional
Domestic Subsidiary of any such supplement. 
In addition, OI Group shall cause each direct or indirect Domestic
Subsidiary of OI Group that, directly or indirectly, guarantees the payment of
any other Indebtedness of the Company or OI Group to simultaneously execute and
deliver 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 10.09         Modification.No
modification, amendment or waiver of any provision of this Article X, 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 X 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)     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 X.

 

53

 

(b)           A Guarantor shall be released from its Obligations under this Indenture
and Guarantee if such Guarantor sells or otherwise disposes of all or
substantially all of its assets to, or consolidates with or merges with or into
another Person or upon any sale of all of the Capital Stock of a Guarantor to
another person, other than the Company or another Guarantor and the
consolidation, merger or sale, assignment, conveyance, transfer or other
disposition is effected in accordance with Section 5.01(b)(ii).

 

(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 5.02
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 5.01(b)(ii).

 

Article XI

 

Exchange of
Notes

 

Section 11.01         Exchange Rights.Subject
to and upon compliance with the provisions of this Article XI, a Holder
shall have the right, at such Holder’s option, to exchange all or any portion
(long as the portion exchanged has an aggregate principal amount that is equal
to an integral multiple of $1,000 principal amount) of its Notes, at any time
prior to 5:00 p.m., New York City time, on the second Scheduled Trading
Day immediately preceding the Maturity Date at an exchange rate (the “Exchange
Rate”) initially equal to 21.0642 shares of OI Inc. Common Stock (subject to
adjustments as provided in Sections 11.03 and 11.04) per $1,000 principal
amount of Notes (the “Exchange Obligation”) only under the following
circumstances:

 

(a)           Exchange Upon Satisfaction of Sale Price Condition.  Prior to 5:00 p.m., New York
City time, on the Business Day immediately preceding March 1, 2015, a
Holder may surrender all or a portion of its Notes for exchange in any fiscal
quarter (and only during such fiscal quarter) commencing after June 30,
2010 if the Last Reported Sale Price of OI Inc. Common Stock for at least 20
Trading Days (whether or not consecutive) in the period of 30 consecutive
Trading Days ending on the last Trading Day of the immediately preceding fiscal
quarter is greater than or equal to 130% of the applicable Exchange Price on
each applicable Trading Day;

 

Whenever
the Notes shall become exchangeable pursuant to this Section 11.01(a), the
Company shall notify the Holders and the Trustee in writing and shall make such
notice available on the Company’s website.

 

(b)           Exchange Upon Satisfaction of Trading Price
Condition.  Prior to 5:00 p.m., New York City time,
on the Business Day immediately preceding March 1, 2015, a Holder may
surrender all or a portion of its notes for exchange during the five Business
Day period immediately after any five consecutive Trading Day period (the “Trading
Price Measurement Period”) in which the Trading Price per $1,000 principal
amount of Notes, as determined following a request by a Holder of at least
$2,000,000 in aggregate principal amount of Notes in accordance with the
procedures set forth in this Section 11.01(b), for each Trading Day in
that 

 

54

 

Trading Price Measurement
Period was less than 98% of the product of the Last Reported Sale Price of OI
Inc. Common Stock and the applicable Exchange Rate for such Trading Day.

 

The Bid Solicitation Agent
shall have no obligation to determine the Trading Price of the Notes on a date
of determination unless the Company has requested that the Bid Solicitation
Agent make such determination.  The
Company shall have no obligation to request that the Bid Solicitation Agent
determine the Trading Price per $1,000 principal amount of Notes on a date of
determination unless a Holder of at least $2,000,000 in aggregate principal
amount of Notes provides the Company with reasonable evidence that the Trading
Price per $1,000 principal amount of Notes would be less than 98% of the product
of the Last Reported Sale Price of the OI Inc. Common Stock and the applicable
Exchange Rate.  At such time, the Company
shall instruct the Bid Solicitation Agent to determine the Trading Price per
$1,000 principal amount of the Notes beginning on the next Trading Day and on
each successive Trading Day until the Trading Price per $1,000 principal amount
of Notes is greater than or equal to 98% of the product of the Last Reported
Sale Price of OI Inc. Common Stock.

 

Whenever the Notes shall
become exchangeable pursuant to this Section 11.01(b), the Company shall
notify the Holders and the Trustee in writing and make such notice available to
the Company’s website.  If, at any time
after the Trading Price condition has been met, the Trading Price per $1,000
principal amount of Notes is greater than or equal to 98% of the product of the
Last Reported Sale Price of OI Inc. Common Stock and the applicable Exchange
Rate, the Company will so notify the Holders and the Trustee in writing.

 

(c)           Exchange Upon Certain Distributions.  Prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding March 1, 2015, if OI Inc. elects to:

 

(i)            distribute to all or substantially all holders of OI Inc. Common Stock
any rights, options or warrants entitling them for a period of not more than 60
calendar days after the issuance date of such distribution to subscribe for or
purchase shares of OI Inc. Common Stock, at a price per share less than the
average of the Last Reported Sale Prices of OI Inc. Common Stock over the 10
consecutive Trading Day period ending on, and including, the Trading Day
immediately preceding the declaration date of such distribution; or

 

(ii)           distribute to all or substantially all holders of OI Inc. Common Stock
its assets, debt securities or rights to purchase its securities, which
distribution has a per share value, as reasonably determined by the Board of
Directors of OI Inc., exceeding 10% of the Last Reported Sale Price of the OI
Inc. Common Stock on the Trading Day preceding the declaration date of such
distribution,

 

then,
in each case, the Company shall notify the Trustee and the Holders in writing
at least 25 Scheduled Trading Days prior to the Ex-Dividend Date for such
distribution.  The Company shall also
issue a press release, and make the press release available on the Company’s
website, announcing the satisfaction of this exchange contingency.  Once the Company has given such notice, a
Holder may surrender all or a portion of its Notes for exchange at any time
from, and including, the date the Company mails such notice until the earlier
of (i) 5:00 p.m., New York City time, on the Business Day immediately
prior to the Ex-Dividend Date or (ii) the date of OI 

 

55

 

Inc.’s
announcement that such distribution will not take place.  A Holder may not exchange any of its Notes
based on this exchange contingency if such Holder will otherwise participate in
the distribution without exchange (based upon the Exchange Rate and upon the
same terms as holders of OI Inc. Common Stock) as a result of holding the
Notes.

 

(d)           Exchange Upon Certain Corporate Events.  Prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding March 1, 2015, in the event of a Fundamental Change
(without regard to the exclusion of transactions involving Publicly Traded
Securities in the paragraph following clause (6) of the definition of
Fundamental Change) or a Make-Whole Fundamental Change, a Holder may surrender
all or a portion of its Notes for exchange at any time from and after the date
which is the later of the 25th Scheduled Trading Day prior to the anticipated
effective date of such transaction and the Business Day after the Company has
given notice of such transaction until (i) in the case of a Fundamental
Change, the later of the 30th Business Day after the actual effective date of
such transaction or the Business Day immediately preceding the Fundamental
Change Purchase Date corresponding to such Fundamental Change, and (ii) in
the case of a Make-Whole Fundamental Change that does not constitute a
Fundamental Change, the 20th Business Day immediately following the Effective
Date of such Make-Whole Fundamental Change.

 

The Company will notify Holders and the
Trustee and issue a press release, and make the press release available on the
Company’s website, as soon as practicable following the date the Company
publicly announces the anticipate effective date of such transaction but in no
event later than 25 Scheduled Trading Days prior to the anticipated effective
date of such transaction, or, if at such time the Company does not have
knowledge of such transaction or its anticipated effective date, within three
Business Days after the date upon which the Company received notice or
otherwise became aware of such transaction and its anticipated effective date,
but in no event later than the actual effective date of such transaction. The
Company will update its notice and issue a press release, and make the press
release available on the Company’s website, promptly if the anticipated
effective date subsequently changes.

 

(e)           Exchange on or after March 1, 2015.  On or after March 1, 2015, a
Holder may exchange all or a portion of its Notes at any time prior to
5:00 p.m., New York City time, on the second Scheduled Trading Day
immediately preceding the Maturity Date.

 

Section 11.02         Exchange Procedures; Settlement Upon Exchange;
Fractional Shares.(a) In
order to exercise the exchange right with respect to any Notes in certificated
form, a Holder must:

 

(i)            complete and manually sign an irrevocable notice of exchange in the form
entitled “Exchange Notice” attached to the reverse of such certificated Note
(or a facsimile thereof) (an “Exchange Notice”);

 

(ii)           deliver such Exchange Notice and certificated Note to the Exchange Agent
at the office of the Exchange Agent;

 

56

 

(iii)          to the extent any shares of OI Inc. Common Stock issuable by OI Inc. upon
exchange are to be issued in a name other than the Holder’s, furnish
endorsements and transfer documents as may be required by the Exchange Agent;

 

(iv)          if required pursuant to Section 11.02(g), pay all transfer or
similar taxes or duties; and

 

(v)           if required pursuant to Section 11.02(h), pay funds equal to interest
payable on the next Interest Payment Date to which the exchanging Holder is not
entitled.

 

In
order to exercise the exchange right with respect to any beneficial interest in
a Global Note, a Holder must:

 

(A)          comply with the Depositary’s procedures for exchanging a beneficial
interest in a Global Note;

 

(B)           to the extent any shares of OI Inc. Common Stock issuable by OI Inc. upon
exchange are to be issued in a name other than the Holder’s, furnish
endorsements and transfer documents as may be required by the Exchange Agent;

 

(C)           if required pursuant to Section 11.02(g), pay all transfer or
similar taxes or duties; and

 

(D)          if required pursuant to Section 11.02(h), pay funds equal to
interest payable on the next Interest Payment Date to which the exchanging
Holder is not entitled.

 

The
date that the Holder satisfies the foregoing requirements with respect to a
Note is the “Exchange Date”.

 

If a Holder has submitted any Notes for
purchase pursuant to Section 3.01, such Notes may be exchanged only if the
Holder submits a withdrawal notice in accordance with Section 3.01(d), and
if such Notes are evidenced by a Global Note, if the Holder complies with
appropriate Depositary procedures.

 

A
Holder is not entitled to any rights of a holder of OI Inc. Common Stock until
such Holder has exchanged its Notes into shares of OI Inc. Common Stock, and
only to the extent such Notes are deemed to have been exchanged to OI Inc.
Common Stock under this Article XI. 
Each Holder which exchanges Notes for OI Inc. Common Stock will be
deemed to have represented to the Company and OI Inc. that it is a QIB.

 

(b)           Upon exchange of any Note, the Exchange Obligation shall be satisfied by
the Company’s paying cash and OI Inc.’s delivering shares of OI Inc. Common
Stock, if any, together with cash in lieu of fractional shares (the “Exchange
Consideration”).  The amount of cash and
the number of shares of OI Inc. Common Stock, if any, due upon exchange of a
Note will be equal to the sum of the Daily Settlement Amounts for each of the
20 consecutive Trading Days during the applicable Cash Settlement Averaging
Period, plus cash in lieu of any fractional 

 

57

 

shares of OI Inc. Common
Stock issuable upon exchange as determined in accordance with Section 11.02(i).

 

Each Note shall be deemed to have been
exchanged immediately prior to 5:00 p.m., New York City time, on the
Exchange Date and the Holder shall be treated as a Holder of record of any OI
Inc. Common Stock issued upon the exchange of such Note on the final day of the
applicable Cash Settlement Averaging Period.

 

The Company shall deliver
the cash and OI Inc. shall deliver the shares of OI Inc. Common Stock, if any,
on the third Business Day immediately following the last Trading Day of the applicable
Cash Settlement Averaging Period; provided, however, that if, on or prior to the Exchange Date for any
exchanged Note, OI Inc. Common Stock has been replaced by Reference Property
consisting solely of cash pursuant to Section 11.05, the Company shall
deliver the cash due in respect of such Note on the third Business Day
immediately following the applicable Exchange Date.

 

(c)           OI Inc.’s only obligation in connection with a Holder’s exercise of its
exchange rights under this Indenture is to deliver the portion of the Exchange
Consideration that consists of shares of OI Inc. Common Stock.  As a result, in the case of any failure to
deliver the Exchange Consideration to an exchanging Holder upon such Holder’s
exercise of its exchange rights under this Indenture, such Holder’s only claim
with respect to OI Inc. would be for the portion of the Exchange Consideration
that consists of shares of OI Inc. Common Stock (or cash in lieu of a
fractional share of OI Inc. Common Stock), and such Holder’s only claim with
respect to the Company would be for the portion of the Exchange Consideration
that consists of cash (other than any portion that corresponds to a fractional
share of OI Inc. Common Stock).

 

(d)           If more than one Note shall be surrendered for exchange at one time by
the same Holder, the Exchange Obligation with respect to such Notes, if any,
that shall be payable upon exchange shall be computed on the basis of the
aggregate principal amount of the Notes (or specified portions thereof to the
extent permitted thereby) so surrendered.

 

(e)           In case any Note shall be surrendered for partial exchange, the Company
shall execute and the Trustee shall authenticate and deliver to or upon the
written order of the Holder of the Notes so surrendered, without charge to such
Holder, a new Note or Notes in authorized denominations in an aggregate
principal amount equal to the unexchanged portion of the surrendered Note.

 

(f)            Upon the exchange of an interest in a Global Note, the Trustee and the
Depositary shall reduce the principal amount of such Global Note in their
records.

 

(g)           The issue of stock certificates on exchanges of Notes shall be made
without charge to the exchanging Holder for any documentary, stamp or similar
issue or transfer tax in respect of the issue thereof.  The Company shall not, however, be required
to pay any such tax which may be payable in respect of any transfer involved in
the issue and delivery of stock in any name other than that of the Holder of
any Notes exchanged, and OI Inc. shall not be required to issue or deliver any
such stock certificate unless and until the Person or Persons requesting the 

 

58

 

issue thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.

 

(h)           Upon exchange, Holders will not be entitled to any additional cash
payment for accrued and unpaid interest, except to the extent set forth
below.  The Company’s delivery to an
exchanging Holder of the cash portion of the Exchange Obligation and OI Inc.’s
delivery to such exchanging Holder of the portion of the Exchange Consideration
consisting of shares of OI Inc. Common Stock, if any, together with any cash
payment for any fractional share issuable upon exchange, will be deemed to
satisfy in full the Company’s obligation to pay the principal amount of the
Notes so exchanged and accrued and unpaid interest to, but not including, the
Exchange Date.

 

As a result, upon exchange, accrued and unpaid
interest to, but not including, the Exchange Date will be deemed to be paid in
full rather than cancelled, extinguished or forfeited.

 

Notwithstanding the foregoing, if Notes
are exchanged after 5:00 p.m., New York City time, on a Regular Record Date
but prior to 9:00 a.m., New York City time, on the corresponding Interest Payment Date, Holders of such Notes at 5:00 p.m., New York City time, on
such Regular Record Date will receive the interest payable on such Notes on the corresponding Interest Payment Date
notwithstanding the exchange of such Notes.  Any Notes surrendered for exchange during the period
from 5:00 p.m., New York City time, on any Regular Record Date to 9:00 a.m.,
New York City time, on the corresponding Interest Payment Date (whether or not
the Holder was the Holder of record on the Regular Record Date) must be
accompanied by funds equal to the amount of interest payable on the Notes so exchanged; provided  that
no such payment need be made:

 

(A)          if the Notes are surrendered for exchange after 5:00 p.m., New York
City time, on November 15, 2015, which is the Regular Record Date
immediately preceding the Maturity Date;

 

(B)           if the Company has specified a Fundamental Change Purchase Date that is
after a Regular Record Date and on or prior to the Business Day immediately
following the corresponding Interest Payment Date and the Holder exchanges its
Notes after such Regular Record Date and on or prior to such corresponding
Interest Payment Date; or

 

(C)           to the extent of any overdue interest, if any overdue interest exists at
the time of exchange with respect to such Notes.

 

(i)            No fractional shares of OI Inc. Common Stock shall be issued by OI Inc.
upon exchange of any Note or Notes.  OI
Inc. shall deliver cash in lieu of any fractional shares of OI Inc. Common
Stock issuable in connection with an exchange of Notes equal to the product of (i) such
fraction of a share and (ii) the daily VWAP of OI Inc. Common Stock on the
last Trading Day of the applicable Cash Settlement Averaging Period.

 

Section 11.03         Adjustment to Exchange Rate Upon Exchange Upon a
Make-Whole Fundamental Change.  (a) If a Make-Whole Fundamental Change
occurs and a Holder elects to exchange its Notes at any time during the
Make-Whole Fundamental Change Period, 

 

59

 

then the Company
shall increase the Exchange Rate for the Notes so surrendered for exchange by a
number of additional shares of OI Inc. Common Stock (the “Additional Shares”)
as set forth in this Section 11.03.

 

(b)           The number of Additional Shares by which the Exchange Rate shall be
increased for exchanges that occur during the Make-Whole Fundamental Change
Period will be determined by reference to the table below, based on the
applicable Effective Date and applicable Stock Price paid or deemed paid per
share of OI Inc. Common Stock in the Make-Whole Fundamental Change.

 

(c)           The Stock Prices set forth in the first row of the table below (i.e.,
column headings) shall be adjusted as of any date on which the applicable Exchange
Rate is otherwise adjusted.  The adjusted
Stock Prices will equal the Stock Prices applicable immediately prior to such
adjustment, multiplied by a fraction, the numerator of which is the applicable
Exchange Rate immediately prior to the adjustment giving rise to the Stock
Price adjustment and the denominator of which is the applicable Exchange Rate
as so adjusted.  The number of Additional
Shares set forth in such table shall be adjusted in the same manner as the
Exchange Rate pursuant to Section 11.04.

 

(d)           The following table sets forth the number of Additional Shares by which
the Exchange Rate shall be increased based on the Stock Price and Effective
Date:

 

	
  Effective

  	
   

  	
  Stock Price

  	
   

  
	
  Date

  	
   

  	
  $33.91

  	
   

  	
  $40.00

  	
   

  	
  $50.00

  	
   

  	
  $60.00

  	
   

  	
  $70.00

  	
   

  	
  $80.00

  	
   

  	
  $90.00

  	
   

  	
  $100.00

  	
   

  	
  $110.00

  	
   

  	
  $120.00

  	
   

  
	
  May 7, 2010

  	
   

  	
  8.4256

  	
   

  	
  5.9202

  	
   

  	
  3.6882

  	
   

  	
  2.5675

  	
   

  	
  1.9426

  	
   

  	
  1.5591

  	
   

  	
  1.3014

  	
   

  	
  1.0764

  	
   

  	
  0.9403

  	
   

  	
  0.8320

  	
   

  
	
  June 1, 2011

  	
   

  	
  8.4256

  	
   

  	
  5.7277

  	
   

  	
  3.3470

  	
   

  	
  2.2123

  	
   

  	
  1.6176

  	
   

  	
  1.2718

  	
   

  	
  1.0487

  	
   

  	
  0.9040

  	
   

  	
  0.7922

  	
   

  	
  0.7032

  	
   

  
	
  June 1, 2012

  	
   

  	
  8.4256

  	
   

  	
  5.4955

  	
   

  	
  2.9465

  	
   

  	
  1.8134

  	
   

  	
  1.2696

  	
   

  	
  0.9787

  	
   

  	
  0.8109

  	
   

  	
  0.6859

  	
   

  	
  0.6004

  	
   

  	
  0.5331

  	
   

  
	
  June 1, 2013

  	
   

  	
  8.4256

  	
   

  	
  5.1361

  	
   

  	
  2.3980

  	
   

  	
  1.3095

  	
   

  	
  0.8615

  	
   

  	
  0.6513

  	
   

  	
  0.5457

  	
   

  	
  0.4717

  	
   

  	
  0.4162

  	
   

  	
  0.3717

  	
   

  
	
  June 1, 2014

  	
   

  	
  8.4256

  	
   

  	
  4.4963

  	
   

  	
  1.5550

  	
   

  	
  0.6541

  	
   

  	
  0.4011

  	
   

  	
  0.3179

  	
   

  	
  0.2719

  	
   

  	
  0.2386

  	
   

  	
  0.2120

  	
   

  	
  0.1899

  	
   

  
	
  June 1, 2015

  	
   

  	
  8.4256

  	
   

  	
  3.9358

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  

 

The
exact Stock Prices and Effective Dates may not be set forth in the table above,
in which case:

 

(i)            if the Stock Price is between two Stock Prices in the table or the
Effective Date is between two Effective Dates in the table, the number of
Additional Shares will be determined by a straight-line interpolation between
the number of Additional Shares set forth for the higher and lower Stock Prices
and the earlier and later Effective Dates, as applicable, based on a 365-day
year;

 

(ii)           if the Stock Price is greater than $120.00 per share (subject to
adjustment in the same manner as the Stock Prices set forth in the column
headings of the table above pursuant to Section 11.03(c)), the Exchange
Rate will not be increased;

 

(iii)          if the Stock Price is less than $33.91 per share (subject to adjustment
in the same manner as the Stock Prices set forth in the column headings of the
table above pursuant to Section 11.03(c)), the Exchange Rate will not be
increased.

 

60

 

 

(e)           Notwithstanding the foregoing, in no event will the Exchange Rate exceed
29.4898 shares per $1,000 principal amount of Notes, subject to adjustments in
the same manner as the Exchange Rate pursuant to Section 11.04.

 

(f)            If a Holder exchanges a Note after the Effective Date for a Make-Whole
Fundamental Change described in clause (2) of the definition of
Fundamental Change  in which the holders
of the OI Inc. Common Stock receive only cash in consideration for their shares
of OI Common Stock in such Fundamental Change, in lieu of settling such
exchange in accordance with Section 11.02, the Company will pay to such
Holder, for each $1,000 principal amount of the Notes exchanged, on the third
Business Day immediately following the Exchange Date for such Note, an amount
of cash equal to the product of (i) the Stock Price for such Make-Whole
Fundamental Change and (ii) the applicable Exchange Rate (as increased by
the number of Additional Shares, if any, when required under this Section 11.03).

 

(g)           The Company shall notify the Trustee and the Holders in writing of the
anticipated Effective Date of such Make-Whole Fundamental Change, and issue a
press release (and make such press release available on its website), as soon
as practicable after public announcement by the Company of the anticipated
Effective Date of such Make-Whole Fundamental Change, but in no event less than
25 Scheduled Trading Days prior to the anticipated Effective Date of such
Make-Whole Fundamental Change, or, if at such time the Company does not have
knowledge of such Make-Whole Fundamental Change or the anticipated Effective
Date of such Make-Whole Fundamental Change, within three Business Day after the
date upon which the Company receives notice or otherwise becomes aware of  such transaction and its anticipate Effective
Date, but in no event later than the actual Effective Date of such
transaction.  The Company shall update
its notice, and issue a press release (and make such press release available on
its website), promptly if the anticipated Effective Date subsequently changes.

 

Section 11.04         Adjustment of Exchange Rate.  The Exchange Rate shall be
adjusted as described below, except that the Company will not make any
adjustments to the Exchange Rate if Holders participate, as a result of holding
Notes and at the same time and upon the same terms as holders of OI Inc. Common
Stock participate, in any of the transactions described in Section 11.04(a),
Section 11.04(b), Section 11.04(c), and Section 11.04(d),
without having to exchange their Notes as if such Holders held a number of
shares of OI Inc. Common Stock equal to the applicable Exchange Rate
immediately prior to the Ex-Dividend Date for such event multiplied by the
principal amount (expressed in thousands) of Notes held by such Holders,
without having to exchange such Notes.

 

If any dividend, distribution or issuance
described below is declared but not so paid or made, the Exchange Rate shall
again be adjusted, effective as of the date OI Inc.’s Board of Directors
publicly announces its decision not to make such dividend, distribution or
issuance, to the Exchange Rate that would have been in effect if such dividend,
distribution or issuance had not been declared.

 

(a)           If the OI Inc. issues to all or substantially all of the holders of OI
Inc. Common Stock solely shares of OI Inc. Common Stock as a dividend or
distribution on all or substantially all of the shares of OI Inc. Common Stock,
or if OI Inc. effects a share split or share 

 

61

 

combination of OI Inc.
Common Stock, the Exchange Rate will be adjusted based on the following
formula:

 

	
  ER = ER0

  	
  x

  	
  OS

  
	
   

  	
  OS0

  

 

where,

 

ER0                      =        the applicable Exchange Rate in effect immediately
prior to 9:00 a.m., New York City time, on the Ex-Dividend Date of such
dividend or distribution, or immediately prior to 9:00 a.m., New York City
time, on the effective date of such share split or share combination, as the
case may be;

 

ER                           =        the applicable Exchange Rate
in effect immediately after 9:00 a.m., New York City time, on such
Ex-Dividend Date or immediately after 9:00 a.m., New York City time, on
the effective date of such dividend or distribution, or immediately after 9:00 a.m.,
New York City time, on the effective date of such share split or share combination,
as the case may be;

 

OS0           =        the number of shares of OI
Inc. Common Stock outstanding immediately prior to such dividend, distribution,
share split or share combination, as the case may be; and

 

OS                          =        the number of shares of OI
Inc. Common Stock outstanding immediately after such dividend, distribution,
share split or share combination, as the case may be.

 

Any
adjustment made pursuant to this Section 11.04(a)  shall become
effective immediately after 9:00 a.m., New York City time, on the
Ex-Dividend Date for such dividend or distribution or effective date of such
share split or share combination, as the case may be.

 

(b)           If OI Inc. distributes to all or substantially all holders of its OI Inc.
Common Stock any rights, options or warrants entitling them for a period of not
more than 60 calendar days from the issuance date for such distribution to
subscribe for or purchase shares of OI Inc. Common Stock, at a price per share
less than the average of the Last Reported Sale Prices of OI Inc. Common Stock
for the ten consecutive Trading Day period ending on, and including, the
Trading Day immediately preceding the declaration date of such distribution,
the applicable Exchange Rate will be adjusted based on the following formula:

 

	
  ER = ER0

  	
  x

  	
  OS0 + X

  
	
   

  	
  OS0 + Y

  

 

where,

 

ER0           =        the applicable Exchange Rate
in effect immediately prior to 9:00 a.m., New York City time, on the
Ex-Dividend Date for such distribution;

 

62

 

ER                           =        the applicable Exchange Rate
in effect immediately after 9:00 a.m., New York City time, on such
Ex-Dividend Date for such distribution;

 

OS0           =        the number of shares of OI
Inc. Common Stock outstanding immediately prior to 9:00 a.m., New York
City time, on such Ex-Dividend Date for such distribution;

 

X                                 =        the total number of shares of OI Inc. Common Stock
issuable pursuant to such rights, options or warrants; and

 

Y                                  =        the number of shares of OI Inc. Common Stock equal
to the aggregate price payable to exercise such rights, options or warrants divided by the average of the Last Reported Sale Prices of
OI Inc. Common Stock over the ten consecutive Trading Day period ending on, and
including, the Trading Day immediately preceding the declaration date for such
distribution.

 

Any
adjustment made pursuant to this Section 11.04(b) shall become
effective immediately after 9:00 a.m., New York City time, on the
Ex-Dividend Date of such distribution. 
To the extent that such rights, options or warrants are not exercised
prior to their expiration or shares of OI Inc. Common Stock are otherwise not
delivered pursuant to such rights, options or warrants upon the exercise of
such rights, options or warrants, the Exchange Rate shall be readjusted to the
Exchange Rate that would then be in effect had the adjustment made upon the
issuance of such rights, options or warrants been made on the basis of the
delivery of only the number of shares of OI Inc. Common Stock actually
delivered.  For purposes of this Section 11.04(b),
in determining whether any rights, options or warrants entitle the Holders to
subscribe for or purchase OI Inc. Common Stock at a price per share less than
the average of the Last Reported Sale Prices of OI Inc. Common Stock for each
Trading Day in the applicable ten consecutive Trading Day period, there shall
be taken into account any consideration received for such rights, options or
warrants and any amount payable on exercise thereof, with the value of such
consideration, if other than cash, to be determined by OI Inc.’s Board of
Directors.

 

(c)           If OI Inc. distributes shares of its Capital Stock, evidences of its
indebtedness, rights, options, warrants to acquire its Capital Stock or other
securities or other assets or property of OI Inc. to all or substantially all
holders of its OI Inc. Common Stock, excluding:

 

(i)            dividends or distributions (including share splits) described in
Section 11.04(a) or (b) above;

 

(ii)           dividends or distributions paid described in Section 11.04(d) below;
and

 

(iii)          Spin-Offs to which the provisions set forth below in this Section 11.04(c) shall
apply; and

 

(iv)          any dividends or distributions in connection with a Reorganization Event;
then the applicable Exchange Rate will be adjusted based on the
following formula:

 

63

 

	
  ER = ER0

  	
  x

  	
  SP0

  
	
   

  	
  SP0 – FMV

  

 

where,

 

ER0           =        the applicable Exchange Rate
in effect immediately prior to 9:00 a.m., New York City time, on the
Ex-Dividend Date for such distribution;

 

ER                           =        the applicable Exchange Rate
in effect immediately after 9:00 a.m., New York City time, on such
Ex-Dividend Date for such distribution;

 

SP0            =        the average of the Last
Reported Sale Prices of OI Inc. Common Stock over the ten consecutive Trading
Day period ending on, and including, the Trading Day immediately preceding the
Ex-Dividend Date for such distribution; and

 

FMV               =        the fair market value (as determined by OI Inc.’s
Board of Directors) of the shares of capital stock, evidences of indebtedness,
rights, options, warrants to acquire its Capital Stock or other securities or
other assets or property distributed with respect to each outstanding share of
OI Inc. Common Stock on the Ex-Dividend Date for such distribution.

 

Any
adjustment made pursuant to the preceding paragraph of this Section 11.04(c) shall
become effective immediately after 9:00 a.m., New York City time, on the
Ex-Dividend Date for such distribution.

 

Notwithstanding
the foregoing, if “FMW” (as defined above) is equal to or greater than “SP0” (as defined above), in
lieu of the foregoing adjustments, the Company shall deliver to each Holder
(without such Holder having to exchange its Notes), in respect of each $1,000
principal amount thereof, at the same time and upon the same terms as holders
of OI Inc. Common Stock receive the distributed property, the amount and kind
of distributed property that such Holder would have received if such Holder had
owned a number of shares of OI Inc. Common Stock equal to the Exchange Rate in
effect on the record date for the distribution.

 

With
respect to an adjustment pursuant to this Section 11.04(c) where
there has been a payment of a dividend or other distribution on OI Inc. Common
Stock of shares of Capital Stock of any class or series, or similar equity
interest, of or relating to a subsidiary, affiliate or other business unit of
OI Inc. that will be listed or quoted (or will be listed or quoted upon
consummation of the payment) on a national securities exchange or reasonably
comparable non-U.S. equivalent (a “Spin-Off”), the applicable Exchange Rate
will be increased based on the following formula:

 

64

 

	
  ER = ER0

  	
  x

  	
  FMV + MP0

  
	
   

  	
  MP0

  

 

where,

 

ER0           =        the applicable Exchange Rate
in effect immediately prior to 9:00 a.m., New York City time, on the
Ex-Dividend Date for such Spin-Off;

 

ER                           =        the applicable Exchange Rate
in effect immediately after 9:00 a.m., New York City time, on such
Ex-Dividend Date for such spin-off;

 

FMV               =        the average of the Last Reported Sale Prices of the
Capital Stock or similar equity interest distributed to holders of OI Inc.
Common Stock applicable to one share of OI Inc. Common Stock (determined for
purposes of the definition of Last Reported Sale Price as if such Capital Stock
or similar equity interest were the OI Inc. Common Stock) over the first ten
consecutive Trading Day period commencing on, and including, the Effective Date
for the Spin-Off (the “Valuation Period”); and

 

MP0         =        the average of the Last
Reported Sale Prices of OI Inc. Common Stock over the Valuation Period.

 

The
adjustment to the applicable Exchange Rate under the preceding paragraph of
this Section 11.04(c) will be made immediately after 9:00 a.m.,
New York City time, on the day after the last day of the Valuation Period, but
will be given effect as of 9:00 a.m., New York City time, on the Ex-Dividend
Date for the Spin-Off.  For purposes of
determining the applicable Exchange Rate in respect of any exchange during the
ten Trading Days commencing on the effective date for any Spin-Off, the
reference within this portion of the Section 11.04(c) related to “Spin-Offs”
to ten Trading Days shall be deemed replaced with such lesser number of Trading
Days as have elapsed from, but not including, the effective date for such
Spin-Off to, but excluding, the relevant Exchange Date.  If one or more Trading Days of the Cash
Settlement Averaging Period for any Note occurs on or after the Ex-Dividend
Date for a Spin-Off, but on or prior to the first Trading Day in the Valuation
Period for such Spin-Off, such Cash Settlement Averaging Period will be
suspended on the first such Trading Day and will resume immediately after the
first Trading day of the Valuation Period for such Spin-Off and the reference
in the above definition of “FMV” to “ten” shall be deemed replaced with a
reference to “one.”

 

(d)           If OI Inc. makes or pays any cash dividend or distribution to all or
substantially all holders of OI Inc. Common Stock, the applicable Exchange Rate
will be increased based on the following formula:

 

	
  ER = ER0

  	
  x

  	
  SP0

  
	
   

  	
  SP0 – C

  

 

where,

 

65

 

ER0           =        the applicable Exchange Rate
in effect immediately prior to 9:00 a.m., New York City time, on the
Ex-Dividend Date for such dividend or distribution;

 

ER                           =        the applicable Exchange Rate
in effect immediately after 9:00 a.m., New York City time, on the
Ex-Dividend Date for such dividend or distribution;

 

SP0            =        the average of the Last
Reported Sale Prices of OI Inc. Common Stock over the ten consecutive Trading
Day period ending on, and including, the Trading Day immediately preceding the
Ex-Dividend Date for such dividend or distribution; and

 

C                                  =        the amount in cash per share OI Inc. distributes to
holders of OI Inc. Common Stock.

 

Notwithstanding
the foregoing , if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in
lieu of the foregoing adjustment, the Company shall deliver to each Holder
(without such Holder having to exchange its Notes), in respect of each $1,000
principal amount of Notes held by such Holder, at the same time and upon the
same terms as holders of shares of OI Inc. Common Stock receive the distributed
property, the amount of cash that such Holder would have received if such
Holder had owned a number of shares of OI Inc. Common Stock equal to the
applicable Exchange Rate on the record date for such cash distribution.

 

Any
adjustment made pursuant to this Section 11.04(d) shall become
effective immediately after 9:00 a.m., New York City time, on the
Ex-Dividend Date for such dividend or distribution.

 

(e)           If OI Inc. or any of its Subsidiaries makes a payment in respect of a
tender offer or exchange offer for OI Inc. Common Stock and the cash and value
of any other consideration included in the payment per share of OI Inc. Common
Stock exceeds the average of the Last Reported Sale Prices of OI Inc. Common
Stock over the ten consecutive Trading Day period commencing on, and including,
the Trading Day next succeeding the last date on which tenders or exchanges may
be made pursuant to such tender or exchange offer (the “Expiration Date”) , the
applicable Exchange Rate will be increased based on the following formula:

 

	
  ER = ER0

  	
  x

  	
  AC + (SP x OS)

  
	
   

  	
  SP x OS0 

  

 

where,

 

ER0           =        the applicable Exchange Rate
in effect immediately prior to 9:00 a.m., New York City time, on the
Trading Day next succeeding the Expiration Date;

 

66

 

ER                           =        the applicable Exchange Rate
in effect immediately after 9:00 a.m., New York City time, on the Trading
Day next succeeding the Expiration Date;

 

AC                        =        the aggregate value of all
cash and any other consideration (as determined by OI Inc.’s Board of
Directors) paid or payable for shares purchased in such tender or exchange
offer;

 

OS0           =        the number of shares of OI
Inc. Common Stock outstanding immediately prior to the time such tender or exchange
offer expires (the “Expiration Time”) (prior to giving effect to such tender
offer or exchange offer);

 

OS                          =        the number of shares of OI
Inc. Common Stock outstanding immediately after the Expiration Time (after
giving effect to the purchase of all shares accepted for purchase or exchange
in such tender or exchange offer); and

 

SP                            =        the average of the Last
Reported Sale Prices of OI Inc. Common Stock over the ten consecutive Trading
Day period commencing on, and including, the Trading Day next succeeding the
Expiration Date.

 

Any
adjustment to the applicable Exchange Rate made pursuant to this
Section 11.04(e) shall become effective at 9:00 a.m., New York
City time, on the Trading Day next succeeding the Expiration Date.  For purposes of determining the applicable
Exchange Rate, in respect of any exchange during the 10 Trading Days commencing
on the Trading Day next succeeding the Trading Day next succeeding the
Expiration Date, references within this Section 11.04(e) to ten
Trading Days shall be deemed replaced with such lesser number of Trading Days
as have elapsed from, but not including, the Trading Day next succeeding the
Expiration Date to, but excluding, the relevant Exchange Date.  If one or more Trading Days of the Cash
Settlement Averaging Period for any Note occurs after the Expiration Date for
any Tender or Exchange Offer, but on or prior to the Trading Day next
succeeding the Expiration Date for such tender or exchange offer, such Cash
Settlement Averaging Period will be suspended on the first such Trading Day and
will resume immediately after the first Trading Day next succeeding the
Expiration Date for such tender or exchange offer and the reference in the
above definition of “SP “ to “ten” shall be deemed replaced with a reference to
“one.”

 

(f)            Notwithstanding the foregoing, if any adjustment to the Exchange Rate
described in Section 11.04 (a) through (e), above, becomes effective
and a Holder that has exchanged its Notes:

 

(i)            receives shares of OI Inc. Common Stock based on an adjusted Exchange
Rate; and

 

(ii)           is a record holder of such shares of OI Inc. Common Stock on the record
date for the dividend, distribution or other event giving rise to the
adjustment or otherwise participates in such dividend, distribution or other
event giving rise to the adjustment as a result of holding such shares of OI
Inc. Common Stock,

 

then, in lieu of
receiving shares of OI Inc. Common Stock at such an adjusted Exchange Rate, the
Company shall adjust the number of shares of OI Inc. Common Stock that OI Inc.
will 

 

67

 

deliver to such Holder as
it determines is appropriate to reflect such Holder’s participation in the
related dividend, distribution or other event giving rise to the adjustment.

 

If
a Holder exchanges a Note, and on any Trading Day within the Cash Settlement
Averaging Period applicable to such Note any distribution or transaction
described in Section 11.04(a) through (e) above has not yet
resulted in an adjustment to the applicable Exchange Rate on the Trading Day in
question, then the Company shall adjust the amount of cash that the Company
Pays and/or the number of shares of OI Inc. Common Stock that OI Inc. delivers,
if applicable, to such Holder in respect of such Trading Day to reflect the relevant
distribution or transaction.

 

(g)           To the extent permitted by law and any applicable stock exchange rules,
the Company may increase the applicable Exchange Rate by any amount for a
period of at least 20 Business Days.  The
Company may also (but shall not required to), in addition to any adjustment
required pursuant to Section 11.04(a), (b), (c), (d) or (e), increase
the applicable Exchange Rate to avoid or diminish income tax to holders of OI
Inc. Common Stock or rights to purchase shares of OI Inc. Common Stock in
connection with a dividend or distribution of shares (or rights to acquire
shares) or similar event.

 

(h)           Whenever the Exchange Rate is adjusted as herein provided, the Company
shall promptly file with the Trustee and any Exchange Agent an Officers’
Certificate setting forth the Exchange Rate after such adjustment and setting
forth a brief statement of the facts requiring such adjustment. Unless and
until a Responsible Officer of the Trustee shall have received such Officers’
Certificate, the Trustee shall not be deemed to have knowledge of any
adjustment of the Exchange Rate and may assume without inquiry that the last
Exchange Rate of which it has knowledge is still in effect. Promptly after
delivery of such certificate, the Company shall issue a press release
containing the relevant information (and make such press release available on
its website). Failure to deliver such notice or make such press release
available shall not affect the legality or validity of any such adjustment.

 

(i)            For purposes of this Section 11.04, the number of shares of OI Inc.
Common Stock at any time outstanding shall not include shares held in the
treasury of OI Inc. or by its Subsidiaries so long as OI Inc. does not pay any
dividend or make any distribution on shares of OI Inc. Common Stock held in the
treasury of OI Inc. or its Subsidiaries, but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of OI Inc.
Common Stock.

 

(j)            The Company shall not take any action that would result in adjustment of
the Exchange Rate, pursuant to the provisions described above, in such a manner
as to result in the reduction of the Exchange Price to less than the par value
per share of OI Inc. Common Stock.

 

(k)           Adjustments to the applicable Exchange Rate shall be calculated to the
nearest 1/10,000th of a share.  The
Company shall not be required to make an adjustment in the Exchange Rate unless
the adjustment would require a change of at least 1% in the Exchange Rate.  However, the Company shall carry forward any
adjustments that are less than 1% of the Exchange Rate and make such carried
forward adjustment, regardless of whether the aggregate 

 

68

 

adjustment is less than
1%, (i) upon any Exchange of Notes, and (ii) on each Trading Day of
any Cash Settlement Averaging Period.

 

Section 11.05         Recapitalizations, Reclassifications and Changes of
OI Inc. Common Stock.  In the case of:

 

(i)            any recapitalization, reclassification or change of OI Inc. Common Stock
(other than changes resulting from a subdivision, combination or change in par
value);

 

(ii)           any consolidation, merger, combination or binding share exchange
involving OI Inc.; or

 

(iii)          any sale or conveyance to another person of all or substantially all of
the property and assets of OI Inc. and its Subsidiaries substantially as an
entirety,

 

in
each case as a result of which OI Inc. Common Stock would be converted into, or
exchanged for, common stock, other securities or other property or assets
(including cash or any combination thereof) (each, a “Reorganization Event”),
then, at the effective time of the Reorganization Event, the Company or the
Successor Company, as the case may be, shall execute with the Trustee a
supplemental indenture (which shall comply with the TIA as in force at the date
of execution of such supplemental indenture) providing that at and after such
effective time the right to exchange a Note based on OI Inc. Common Stock will,
without the consent of the Holders, be changed into a right to exchange each
$1,000 principal amount of Notes based on the kind and amount of shares of
common stock, other securities or other property or assets (including cash or
any combination thereof) that a holder of a number of shares of OI Inc. Common
Stock equal to the Exchange Rate immediately prior to such Reorganization Event
would have owned or been entitled to receive (the “Reference Property,” with
each “unit of Reference Property”  meaning
the type and amount of Reference Property that a holder of one share of OI Inc.
Common Stock is entitled to receive) upon such Reorganization Event.  In all cases, (A) the amount otherwise
payable in cash upon exchange of the Notes pursuant to Section 11.02(b) shall
continue to be payable in cash, (B) the number of shares of OI Inc. Common
Stock otherwise deliverable upon exchange of the Notes pursuant to Section 11.02(b) will
be instead be deliverable in the amount and type of Reference Property that a
Holder of that number of shares of OI Inc. Common Stock would have received in
such transaction and (C) the Daily VWAP shall be calculated based on the
value of a unit of Reference Property that a holder of one share of OI Inc.
Common Stock would have received in such transaction;  provided, however, that
if the holders of OI Inc. Common Stock receive only cash in such transaction,
the amount deliverable upon exchange shall equal the Exchange Rate in effect on
the Exchange Date multiplied by the price paid per share of OI Inc. Common
Stock in such transaction and settlement will occur on the third Trading Day
following the Exchange Date.

 

If
the Reorganization Event causes OI Inc. Common Stock to be converted into, or
exchanged for, the right to receive more than a single type of consideration
(determined based in part upon any form of stockholder election), the Reference
Property based on which the Notes will be exchangeable will be deemed to be the
weighted average of the types and amounts of consideration received by the
holders of OI Inc. Common Stock that affirmatively make such an 

 

69

 

election
and the Company will notify Holders of the weighted average as soon as
practicable after such determination is made.

 

Any
supplemental indenture entered into pursuant to this Section 11.05 shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article XI in the
judgment of the Company’s Board of Directors or the Board of Directors of the
Successor Company.  If, in the case of
any such Reorganization Event, the Reference Property receivable thereupon by a
holder of OI Inc. Common Stock includes shares of stock, securities or other
property or assets (including cash or any combination thereof) of a Person
other than the Successor Company, as the case may be, in such Reorganization
Event, then such supplemental indenture shall also be executed by such other
Person.

 

The
Company shall cause notice of the execution of such supplemental indenture to
be mailed to each Holder, at the address of such Holder as it appears on the
Register, within 20 days after execution thereof. Failure to deliver such
notice shall not affect the legality or validity of such supplemental
indenture.

 

The
above provisions of this Section 11.05 shall similarly apply to successive
Reorganization Events.  If this Section 11.05
applies to any Reorganization Event, Section 11.04 shall not apply.

 

Section 11.06         Certain Covenants.  OI Inc. shall, prior to the Company’s
issuance of any Notes hereunder, and from time to time as may be necessary,
reserve out of OI Inc.’s authorized but unissued OI Inc. Common Stock or shares
of OI Inc. Common Stock held in treasury, a sufficient number of shares of OI
Inc. Common Stock, free of preemptive rights, to permit the issuance of the
maximum number of shares of OI Inc. Common Stock issuable at such time upon
exchange of the Notes and without assuming any adjustments to the conversion
rate pursuant to Section 11.04.

 

(a)           OI Inc. covenants that all shares of OI Inc. Common Stock issued upon
exchange of Notes will be duly and validly issued and fully paid and
non-assessable and free from all taxes, liens and charges with respect to the
issue thereof.

 

(b)           OI Inc. shall endeavor promptly to comply with all federal and state
securities laws regulating the issuance and delivery of shares of OI Inc.
Common Stock upon the exchange of Notes, if any, and shall cause to have listed
or quoted and shall keep listed or quoted all such shares of OI Inc. Common Stock
on each U.S. national securities exchange or automatic quotation system or
over-the-counter or other domestic market on which the OI Inc. Common Stock is
then listed or quoted.

 

Section 11.07         Notice to Holders Prior to Certain Actions    Except where notice is required
pursuant to Section 11.01, in case:

 

(a)           OI Inc. shall declare a dividend (or any other distribution) on its OI
Inc. Common Stock that would require an adjustment in the Exchange Rate
pursuant to Section 11.04; or

 

70

 

 

(b)           OI Inc. shall authorize the granting
to all or substantially all of the holders of its OI Inc. Common Stock of
rights, options or warrants to subscribe for or purchase any share of any class
or any other rights, options or warrants that would require an adjustment in
the Exchange Rate pursuant to Section 11.04; or

 

(c)           of any reclassification of the OI
Inc. Common Stock (other than a share split or share combination of its
outstanding OI Inc. Common Stock, or a change in par value), or of any share
exchange, consolidation or merger to which OI Inc. is a party and for which
approval of any shareholders of OI Inc. is required, or of the conveyance,
transfer, sale, lease or other disposition of all or substantially all of the
consolidated assets of OI Inc.; or

 

(d)           of the voluntary or involuntary
dissolution, liquidation or winding up of the Company or OI Inc.;

 

the
Company shall cause to be filed with the Trustee and the Exchange Agent and to
be mailed to each Holder at its address appearing on the Register provided for
in Section 2.05, as promptly as possible but in any event at least 20 days
prior to the applicable date hereinafter specified, a notice stating (i) the
declaration date of the dividend or other distribution, (ii) the date on
which a record is to be taken for the purpose of such dividend, distribution or
rights, options or warrants, or, if a record is not to be taken, the date as of
which the holders of OI Inc. Common Stock of record to be entitled to such
dividend, distribution or rights are to be determined or (iii) the date on
which such reclassification, share exchange, consolidation, merger, conveyance,
transfer, sale, lease or other disposition, dissolution, liquidation or winding
up is expected to become effective or occur, and the date as of which it is
expected that holders of OI Inc. Common Stock of record shall be entitled to
exchange their OI Inc. Common Stock for Notes or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.  Failure to
give such notice, or any defect therein, shall not affect the legality or
validity of such dividend, distribution, reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up.

 

Section 11.08         Shareholder Rights Plans.  If
the rights provided for in any rights plan adopted by OI Inc. and in effect
upon exchange of the Notes have not separated from the shares of OI Inc. Common
Stock in accordance with the provisions of the applicable shareholder rights
agreement, upon exchange of Notes, the exchanging Holder will receive, in
addition to shares of OI Inc. Common Stock, if any, the rights under the
applicable shareholder rights agreement. 
If such rights have separated from the OI Inc. Common Stock, the
applicable Exchange Rate will be adjusted as provided in Section 11.04(c),
subject to readjustment in the event of the expiration, termination or
redemption of such rights.

 

Section 11.09         Responsibility of Trustee.  The
Trustee and any other Exchange Agent shall not at any time be under any duty or
responsibility to any Holder of Notes to determine the Exchange Rate or whether
any facts exist that may require any adjustment (including any increase) of the
Exchange Rate, or with respect to the nature or extent or calculation of any
such adjustment when made, or with respect to the method employed, or herein or
in any supplemental indenture provided to be employed, in making the same.  The Trustee and any other Exchange Agent
shall not be accountable with respect to the validity or 

 

71

 

value (or the kind or
amount) of any shares of OI Inc. Common Stock, or of any securities, property
or cash that may at any time be issued or delivered upon the exchange of any
Note; and the Trustee and any other Exchange Agent make no representations with
respect thereto.  Neither the Trustee nor
any Exchange Agent shall be responsible for any failure of OI Inc. to issue,
transfer or deliver any shares of OI Inc. Common Stock or stock certificates
upon the surrender of any Note for the purpose of exchange or to comply with
any of the duties, responsibilities or covenants of OI Inc. contained in this Article XI.  Without limiting the generality of the
foregoing, neither the Trustee nor any Exchange Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
supplemental indenture entered into pursuant to Section 11.05 relating
either to the kind or amount of shares of stock or securities or property
(including cash) receivable by Holders of the Notes upon the exchange of their
Notes after any event referred to in such Section 11.05 or to any
adjustment to be made with respect thereto, but, subject to the provisions of Section 9.02,
may accept as conclusive evidence of the correctness of any such provisions,
and shall be protected in relying upon, the Officers’ Certificate (which the
Company shall be obligated to file with the Trustee prior to the execution of
any such supplemental indenture) with respect thereto.  Neither the Trustee nor the Exchange Agent
shall be responsible for determining whether any event contemplated by Section 11.01
has occurred that makes the Notes eligible for exchange or no longer eligible
therefor until the Company has delivered to the Trustee and the Exchange Agent
the notices referred to in Section 11.01 with respect to the commencement
or termination of such exchange rights, on which notices the Trustee and the
Exchange Agent may conclusively rely, and the Company agrees to deliver such
notices to the Trustee and the Exchange Agent immediately after the occurrence
of any such event or at such other times as shall be provided for in Section 11.01.

 

Section 11.10         Certain Other Adjustments.Whenever a provision of this Indenture
requires the calculation of Last Reported Sale Prices, Daily VWAP or functions
thereof over a span of multiple days, the Company will make appropriate
adjustments to account for any adjustment to the Exchange Rate that becomes effective,
or any event requiring an adjustment to the Exchange Rate where the Ex-Dividend
Date, effective date or Expiration Date, as the case may be, of the event
occurs, at any time during or before the period from which such prices are to
be calculated.  The Trustee and Exchange
Agent shall not be requested to confirm any such calculations and shall be
entitled to rely on such calculations and be held harmless with respect
thereto.

 

Article XII

 

Miscellaneous

 

Section 12.01         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 12.02         Notices.  (a) 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:

 

72

 

If
to the Company:

 

Owens-Brockway
Glass Container, Inc.

c/o Owens-Illinois Group, Inc. 

One O-I Plaza

One Michael Owens Way 

Perrysburg, OH 43551

Attention: Treasurer

 

Telephone:
(567) 336-5000

Facsimile:
(419) 247-7107

 

If
to OI Inc.:

 

Owens-Illinois Group, Inc. 

One O-I Plaza

One Michael Owens Way 

Perrysburg, OH 43551

Attention: Treasurer

 

Telephone:
(567) 336-5000

Facsimile:
(419) 247-7107

 

If
to the Trustee:

 

U.S.
Bank National Association

Raymond S. Haverstock             

Corporate Trust Services         

EP-MN-WS3C

60 Livingston Avenue

St. Paul MN 55107-1419

Telephone:
(651) 495-3909

Facsimile:
(651) 495-1221

 

The Company, OI Inc. or the Trustee by
notice to the others may designate additional or different addresses for
subsequent notices or communications.

 

All notices and communications mailed to a
Holder shall be mailed to the Holder at the Holder’s address as it appears on
the Register.  Notices will be deemed to
have been given on the date of such mailing. Any notice or communication to a
Holder shall be mailed by first-class mail.

 

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.

 

73

 

Section 12.03         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, OI Inc., the Guarantors, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).

 

Section 12.04         Certificate and Opinion as to Conditions Precedent.  Upon any request or
application by the Company to the Trustee to take any action under this
Indenture, the Company shall furnish to the Trustee:

 

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

 

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

 

Section 12.05         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 4.05)
shall include:

 

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

 

(b)           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;

 

(c)           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

 

(d)           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 12.06         When Notes Disregarded.  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, OI Inc., any of the
Guarantors or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company, OI Inc. or any of
the Guarantors shall be disregarded and deemed not to be outstanding, except
that, for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes which the Trustee
knows are so owned shall be so disregarded. 
Subject to the foregoing, only Notes outstanding at the time shall be
considered in any such determination.

 

Section 12.07         Rules by Trustee, Paying Agent and Registrar.  The Trustee as to Notes
may make reasonable rules for action by or at a meeting of Holders of
Notes.  The 

 

74

 

Registrar and
any Paying Agent or Authenticating Agent may make reasonable rules and set
reasonable requirements for their functions.

 

Section 12.08         GOVERNING LAW.  THIS INDENTURE, THE NOTES AND THE GUARANTEES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.

 

Section 12.09         No Recourse Against Others.  A past, present or future
director, officer, employee, incorporator or stockholder, as such, of the
Company, OI Inc. or any Guarantor, if any, or any successor corporation shall
not have any liability for any obligations of the Company, OI Inc.  or any Guarantor, if any, under the Notes,
this Indenture or the Guarantees of the Notes, if any, or for any claim based
on, in respect of, or by reason of such obligations or their creation.  Each Holder by accepting a Note waives and
releases all such liability.  The waiver
and release are part of the consideration of issuance of the Notes.

 

Section 12.10         Successors.  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 12.11         Multiple Originals.  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 12.12         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 12.13         Indenture Controls..  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.

 

Section 12.14         Calculations.
Except as otherwise provided in this Indenture, the Company will be responsible
for making all calculations called for under this Indenture and the Notes.  These calculations include, but are not
limited to, determinations of the Last Reported Sale Prices of OI Inc. Common
Stock, accrued interest payable on the Notes and the applicable Exchange
Rate.  The Company shall make all these
calculations in good faith and, absent manifest error, the Company’s
calculations will be final and binding on Holders.  The Company will provide a schedule of its
calculations to each of the Trustee and the Exchange Agent, and each of the
Trustee and Exchange Agent shall be entitled to rely conclusively upon the
accuracy of our calculations without independent verification.  The Trustee will forward the Company’s
calculations to any Holder upon request.

 

Section 12.15         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.

 

75

 

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

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  OWENS-BROCKWAY
  GLASS CONTAINER INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  OWENS-ILLINOIS, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  OWENS-ILLINOIS
  GROUP, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:
  Vice President, Director of Finance 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

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  

 

76

 

	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

77

 

ANNEX
A

 

GUARANTORS

 

	
  Name of
  Entity

  	
   

  	
  Title of Officer Executing on

  Behalf of Such Entity

  
	
  ACI America Holdings Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Brockway Realty
  Corporation

  	
   

  	
  Vice
  President and Secretary

  
	
  NHW Auburn, LLC

  	
   

  	
  Senior
  Vice President and Secretary of its sole member

  
	
  OI Auburn Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Australia Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI California Containers
  Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Castalia STS Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI General Finance Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI General FTS Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  O-I Holding LLC

  	
   

  	
  Vice
  President and Secretary of its sole member

  
	
  OI International Holdings
  Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Levis Park STS Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OI Puerto Rico STS Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  OIB Produvisa Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Owens-Brockway
  Packaging, Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Owens-Illinois General
  Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Owens-Illinois
  Group, Inc.

  	
   

  	
  Vice
  President, Director of Finance and Secretary

  
	
  SeaGate, Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  SeaGate II, Inc.

  	
   

  	
  Vice
  President and Secretary

  

 

A-1

 

	
  SeaGate III, Inc.

  	
   

  	
  Vice
  President and Secretary

  
	
  Universal
  Materials, Inc.

  	
   

  	
  Vice
  President and Secretary

  

 

A-2

 

 

EXHIBIT A

 

[FORM OF FACE OF NOTE]

 

[Global Notes Legend]

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK,
NEW YORK, 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 IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS 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.

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

[Restricted Legend]

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY, EXCEPT (A) TO
OWENS-BROCKWAY GLASS CONTAINER INC., OWENS-ILLINOIS, INC. OR A SUBSIDIARY
OF OWENS-ILLINOIS, INC. (IN ADDITION TO OWENS-BROCKWAY GLASS CONTAINER
INC.); OR (B) TO A PERSON THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED UNDER RULE 144A UNDER THE SECURITIES ACT) THAT
IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER AND TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, ALL IN COMPLIANCE WITH RULE 144A (IF AVAILABLE).

 

BY ACCEPTANCE OF THIS NOTE, EACH PURCHASER AND SUBSEQUENT TRANSFEREE OF
THIS NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED AND
WARRANTED THAT EITHER (A) NO PORTION OF THE ASSETS USED BY SUCH PURCHASER OR
TRANSFEREE TO ACQUIRE OR HOLD THIS NOTE OR ANY INTEREST HEREIN CONSTITUTES
ASSETS OF ANY EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE
EMPLOYEE 

 

A-1

 

RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”))
WHICH IS SUBJECT TO TITLE I OF ERISA, ANY PLAN, INDIVIDUAL RETIREMENT
ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR PROVISIONS
UNDER ANY FEDERAL, STATE, LOCAL, NON-UNITED STATES OR OTHER LAWS OR REGULATIONS
THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, “SIMILAR
LAWS”), OR ANY ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN
ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT OR (B) THE ACQUISITION
AND HOLDING OF THIS NOTE OR ANY INTEREST HEREIN WILL NOT CONSTITUTE A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE OR ANY SIMILAR VIOLATION UNDER ANY APPLICABLE
SIMILAR LAWS.

 

A-2

 

	
  No.

  	
  $                                 

  

 

3.00% Exchangeable Senior Note due 2015

 

	
   

  	
  CUSIP
  No. 69073TAQ6

  
	
   

  	
  ISIN
  No. US69073TAQ67

  

 

Owens-Brockway Glass Container Inc., a
Delaware corporation, promises to pay to Cede & Co., or registered
assigns, the principal sum of          
dollars [or such lesser amount as is indicated in the records of the
Trustee and DTC] on June 1, 2015, and to pay interest thereon from May 7,
2010, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually on June 1 and December 1 of
each year, commencing December 1, 2010, at the rate of 3.00% per annum,
until the principal hereof is paid or made available for payment or
exchanged.  The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Note (or
one or more predecessor Notes) is registered at 5:00 p.m., New York City
time, on the Regular Record Date for such interest, which shall be May 15
or November 15 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. 
Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and will
be payable to Holders on a subsequent special record date.

 

Additional
provisions of this Note are set forth on the other side of this Note.

 

A-3

 

IN
WITNESS WHEREOF, the parties have caused this instrument to be duly executed.

 

 

	
   

  	
   

  	
  OWENS-BROCKWAY
  GLASS CONTAINER INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF

  	
   

  	
   

  	
   

  
	
   

  	
  AUTHENTICATION

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.S. BANK NATIONAL ASSOCIATION,

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  as
  Trustee, certifies that this

  	
   

  	
   

  	
   

  
	
   

  	
  is
  one of the Notes

  	
   

  	
   

  	
   

  
	
   

  	
  referred
  to in the Indenture.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  	
   

  	
   

  
						

 

*
If the Note is to be issued in global form, add the Global Notes Legend

 

A-4

 

[FORM OF REVERSE SIDE OF NOTE]

 

3.00% Exchangeable Senior Note due 2015

 

Owens-Brockway
Glass Container Inc., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being
herein called the “Company”), issued the Notes under an Indenture dated as of May
7, 2010 (the “Indenture”), among the Company, the Guarantors, Owens-Illinois, Inc.
and the Trustee.  The terms of the Notes
include those stated in the Indenture. 
Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture.  The
Notes are subject to all terms and provisions of the Indenture, and Holders are
referred to the Indenture for a statement of such terms and provisions.

 

1.  Interest

 

The
Company promises to pay interest on the principal amount of this Note at the
rate per annum shown above.  The Company
shall pay interest semiannually on June 1 and December 1 of each
year, commencing on December 1, 2010. 
Interest on the Notes shall accrue from the most recent date to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for, from May 7, 2010, until the principal hereof is
due.  Interest shall be computed on the
basis of a 360-day year of twelve 30-day months.  The Company shall pay interest on overdue
principal at the rate borne by the Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.  In addition, the Company will pay
Registration Default Additional Interest, if any, pursuant to Section 4.05
and Reporting Default Additional Interest, if any, pursuant to Section 6.13
of the Indenture.  All references herein
to “interest” shall include any Registration Default Additional Interest, if
any, and Reporting Default Additional Interest, if any.

 

If
any Interest Payment Date, the Maturity Date or any earlier required purchase
date upon a Fundamental Change of a Note falls on a day that is not a Business
Day, the required payment will be made on the next succeeding Business Day and
no interest on such payment will accrue in respect of the delay.

 

2.  Method of Payment

 

The
Company shall pay interest on the Notes (except defaulted interest) to the
Persons in whose name a Note is registered at 5:00 p.m., New York City
time, on the May 15 or November 15, as the case may be, immediately
preceding the relevant Interest Payment Date even if Notes are canceled after
the Regular Record Date and on or before the Interest Payment Date.  Holders must surrender Notes to a Paying
Agent to collect principal payments.  The
Company shall pay principal and interest in money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts.  Payments in respect of
the Notes represented by a Global Note (including principal and interest) shall
be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company or any successor depositary.  The Company will make all payments in respect
of a certificated Note (including principal and interest), at the office of the
Paying Agent, except that, at the option of the Company, payment of interest
may be made by mailing a check to the 

 

A-5

 

registered
address of each Holder thereof; provided, however, that payments on the Notes may also be made, in the
case of a Holder of at least $5,000,000 aggregate principal amount of Notes, by
wire transfer to a U.S. dollar account maintained by the payee with a bank in
the United States if such Holder elects payment by wire transfer by giving
written notice to the Registrar to such effect designating such account not
later than the relevant Regular Record Date, which application shall remain in
effect until the Holder provides written notice to the Registrar to the contrary.

 

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 or Registrar without
notice.  The Company or any of its Wholly
Owned Domestic Subsidiaries may act as Paying Agent or Registrar.

 

4.  Ranking

 

The
Notes are senior unsecured obligations of the Company.  This Note is one of the Notes referred to in
the Indenture.  The Notes are treated as
a single class of Notes under the Indenture.

 

The
Guarantors will fully and unconditionally guarantee, jointly and severally, the
Obligations on a senior basis pursuant to the terms of the Indenture.

 

5.
Merger Covenant

 

The
Indenture imposes limitations on the ability of the Company, OI Group, OI Inc.,
and the Guarantors to consolidate or merge with or into any other Person or
convey, transfer or lease all or substantially all its property.

 

6.  Sinking Fund

 

The
Notes are not subject to any sinking fund.

 

7.  Purchase of Notes at the Option of Holders
upon Fundamental Change

 

Upon
the occurrence of a Fundamental Change, each Holder has the right, at such
Holder’s option, to require the Company to purchase all of such Holder’s Notes
or any portion thereof (in principal amounts of $1,000 or multiples thereof) on
the Fundamental Change Purchase Date at a price equal to 100% of the principal
amount of the Notes such Holder elects to require the Company to purchase,
together with accrued and unpaid interest to, but excluding, the Fundamental
Change Purchase Date.

 

8.  Exchange Rights

 

Subject
to the provisions of the Indenture, the Holder hereof has the right, at its
option, during certain periods and upon the occurrence of certain conditions
specified in the Indenture and prior to 5:00 p.m., New York City time, on
the second Scheduled Trading Day 

 

A-6

 

immediately
preceding the Maturity Date, to exchange any Notes or portion thereof that is
$1,000 or multiples thereof at an Exchange Rate specified in the Indenture, as
adjusted from time to time as provided in the Indenture, upon surrender of this
Note, together with an Exchange Notice as provided in the Indenture and this
Note, to the Company at the office or agency of the Company maintained for that
purpose in New York City and, unless the shares of OI Inc. Common Stock
issuable on exchange are to be issued in the same name as this Note, duly
endorsed by, or accompanied by instruments of transfer in form satisfactory to
the Company duly executed by, the Holder or by its duly authorized
attorney.  Upon exchange, the Exchange
Obligation shall be satisfied by delivery of cash by the Company and the
delivery of shares of OI Inc. Common Stock, if any, by OI Inc.  The initial Exchange Rate shall be 21.0642
shares of OI Inc. Common Stock for each $1,000 principal amount of Notes. No
fractional shares of OI Inc. Common Stock will be issued upon any exchange, but
an adjustment in cash will be paid to the Holder by OI Inc., as provided in the
Indenture, in respect of any fraction of a share that would otherwise be
issuable by OI Inc. upon the surrender of any Note or Notes for exchange.  No adjustment shall be made for dividends or
any shares issued upon exchange of such Notes except as provided in the
Indenture.

 

OI
Inc.’s only obligation in connection with a Holder’s exercise of its exchange
rights under the Indenture is to deliver the portion of the Exchange
Consideration that consists of shares of OI Inc. Common Stock.  As a result, in the case of any failure to
deliver the Exchange Consideration to an exchanging Holder upon such Holder’s
exercise of its exchange rights under the Indenture, such Holder’s only claim
with respect to OI Inc. would be for the portion of the Exchange Consideration
that consists of shares of OI Inc. Common Stock (or cash in lieu of a
fractional share of OI Inc. Common Stock), and such Holder’s only claim with
respect to the Company would be for the portion of the Exchange Consideration
that consists of cash (other than any portion that corresponds to a fractional
share of OI Inc. Common Stock).

 

9.  Denominations; Transfer; Exchange

 

The
Notes are in registered form without coupons in minimum denominations of $1,000
and whole multiples of $1,000 in excess thereof.  A Holder may transfer or exchange Notes in
accordance with the Indenture.  Upon any
transfer or exchange, the Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements or transfer documents and to
pay any taxes required by law or permitted by the Indenture.  The Registrar need not register transfers or
exchanges of Notes or portions thereof surrendered for exchange pursuant to Article XI
or any Notes tendered for purchase upon a Fundamental Change pursuant to Article III.

 

The
Notes will be resold only to “qualified institutional buyers” under Rule 144A
of the Securities Act of 1933, as amended (“QIBs”), in reliance on Rule 144A.
The Notes may thereafter be transferred only to QIBs. Notes shall be resold
pursuant to Rule 144A and shall be issued initially in the form of Restricted
Global Notes, without interest coupons and with the Global Notes Legend and the
applicable Restricted Legend as provided in the Indenture, which shall be
deposited on behalf of the purchasers of the Notes represented thereby with the
Notes Custodian and registered in the name of the Depositary or a nominee of
the Depositary, duly executed by the Company and authenticated by the Trustee
as provided in the Indenture.

 

A-7

 

Each
Holder which exchanges Notes for OI Inc. Common Stock will be deemed to have
represented to the Company and OI Inc. that it is a QIB.

 

10.  Persons Deemed Owners

 

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

 

11.  Unclaimed Money

 

If
money for the payment of principal, interest, or any shares of OI Inc. Common
Stock or other property due in respect of exchanged Notes, if any, remains
unclaimed for two years, the Trustee and the Paying Agent shall pay the money
or any shares of OI Inc. Common Stock or other property due in respect of
exchanged Notes back to the Company or OI Inc., as the case may be, at its
written request unless an abandoned property law designates another
Person.  After any such payment, Holders
entitled to the money or any shares of OI Inc. Common Stock or other property
due in respect of exchanged Notes must look to the Company or OI Inc., as the
case may be, for payment as general creditors and the Trustee and the Paying
Agent shall have no further liability with respect to such monies.

 

12.  Discharge

 

Subject
to certain conditions, the Company and OI Inc. may satisfy and discharge its
respective obligations under the Notes and the Indenture if the Company
deposits with the Trustee, after the Notes have become due and payable, whether
at Stated Maturity or on a Fundamental Change Purchase Date or upon exchange or
otherwise, money for the payment of principal and interest, if any, on the
Notes prior to repurchase or maturity, as the case may be, and OI Inc. deposits
with the Trustee shares of OI Inc. Common Stock, if any, for delivery upon
exchange.

 

13.  Amendment, Waiver

 

Subject
to certain exceptions set forth in the Indenture, (a) the Indenture or the
Notes may be amended without prior notice to any Holder but with the written
consent of the Holders of at least a majority in aggregate principal amount of
the outstanding Notes and (b) any default may be waived with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Notes.  Without the consent
of any Holder, the Company and the Trustee may amend the Indenture or the Notes
as set forth in the Indenture.

 

14.  Defaults and Remedies

 

If
an Event of Default occurs (other than an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Company, OI Inc., OI
Group or any Significant Subsidiary of OI Group) and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the outstanding Notes may
declare the principal of and accrued but unpaid interest on all the Notes to be
due and payable.  If an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of the
Company, OI Inc., OI Group or any Significant Subsidiary of OI Group occurs,
the principal of and interest on all the Notes shall 

 

A-8

 

become
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders.  Under
certain circumstances, the Holders of a majority in principal amount of the
outstanding Notes may rescind any such acceleration with respect to the Notes
and its consequences.

 

If
an Event of Default occurs and is continuing, the Trustee shall be under no
obligation to exercise any of the rights or powers under the Indenture at the
request or direction of any of the Holders unless such Holders have offered to
the Trustee reasonable indemnity or security against any loss, liability or
expense and certain other conditions are complied with.  Except to enforce the right to receive
payment of principal or interest when due, or the right to receive payment or
delivery of the Exchange Consideration due upon exchange, no Holder may pursue
any remedy with respect to the Indenture or the Notes unless (a) such
Holder has previously given the Trustee notice that an Event of Default is
continuing, (b) Holders of at least 25% in principal amount of the
outstanding Notes have requested the Trustee in writing to pursue the remedy,
(c) such Holders have offered the Trustee reasonable security or indemnity
against any loss, liability or expense, (d) the Trustee has not complied
with such request within 60 days after the receipt of the request and the
offer of security or indemnity and (e) the Holders of a majority in
principal amount of the outstanding Notes have not given the Trustee a
direction inconsistent with such request within such 60-day period.  Subject to certain restrictions, the Holders
of a majority in principal amount of the outstanding Notes are given the right
to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or of exercising any trust or power conferred
on the Trustee.  The Trustee, however,
may refuse to follow any direction that conflicts with law or the Indenture or
that the Trustee determines is unduly prejudicial to the rights of any other
Holder or that would involve the Trustee in personal liability.  Prior to taking any action under the
Indenture, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against all losses and expenses caused by taking or not
taking such action.

 

15.  Trustee Dealings with the Company

 

The
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Notes and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it
were not Trustee.

 

16.  No Recourse Against Others

 

A
director, officer, employee or stockholder, as such, of the Company or the
Guarantor shall not have any liability for any obligations of the Company under
the Notes or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. 
By accepting a Note, each Holder waives and releases all such liability.  The waiver and release are part of the
consideration for the issue of the Notes.

 

A-9

 

17.  Authentication

 

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

 

18.  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).

 

19.  Governing Law

 

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

 

20.  CUSIP Numbers and ISINs

 

The
Company has caused CUSIP numbers and ISINs to be printed on the Notes and has
directed the Trustee to use CUSIP numbers and ISINs in notices of 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 of Notes upon
written request and without charge to the Holder a copy of the Indenture which
has in it the text of this Note.

 

A-10

 

 

EXCHANGE NOTICE

 

TO: OWENS-BROCKWAY GLASS
CONTAINER INC.
         U.S. BANK NATIONAL ASSOCIATION,
as Trustee

 

The undersigned registered
owner of this Note hereby irrevocably exercises the option to exchange this
Note, or the portion thereof (which is $1,000 or a multiple thereof) below
designated in accordance with the terms of the Indenture referred to in this
Note, and directs that the cash deliverable by the Company and shares of OI
Inc. Common Stock, if any, deliverable by OI Inc. upon such exchange and any
Notes representing any unexchanged principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below.  Capitalized terms used
herein but not defined shall have the meanings ascribed to such terms in the
Indenture.  If shares or any portion of
this Note not exchanged are to be issued in the name of a person other than the
undersigned, the undersigned will provide the appropriate information below and
pay all transfer taxes payable with respect thereto.  Any amount required to be paid by the
undersigned on account of interest accompanies this Note.

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  

 

Signature(s) must be
guaranteed by an “eligible guarantor institution” meeting the requirements of
the Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program (“STAMP”) or such other “signature
guarantee program” as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.

 

	
   

  	
   

  	
   

  
	
   

  	
  Signature
  Guarantee

  

 

A-11

 

Fill in the registration of
shares of OI Inc. Common Stock, if any, to be issued by OI Inc., and Notes if
to be delivered, and the person to whom cash delivered by the Company, and
payment for fractional shares is to be made, if to be made by OI Inc., other
than to and in the name of the registered holder:

 

	
  Please print name and
  address

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Street Address)

  	
   

  
	
   

  	
   

  
	
  (City, State and Zip Code)

  	
   

  
	
   

  	
   

  
	
  Principal amount to be
  exchanged

  	
   

  
	
  (if less than all):

  	
   

  
	
   

  	
   

  
	
  $

  	
   

  	
   

  
	
   

  	
   

  
	
  Social
  Security or Other Taxpayer Identification Number:

  
	
   

  	
   

  
	
   

  	
   

  
			

 

NOTICE: The signature on
this Exchange Notice must correspond with the name as written upon the face of
the Notes in every particular without alteration or enlargement or any change
whatsoever.

 

A-12

 

FUNDAMENTAL CHANGE PURCHASE NOTICE

 

TO: OWENS-BROCKWAY GLASS
CONTAINER INC.
         U.S. BANK NATIONAL ASSOCIATION,
as Trustee

 

The undersigned registered
owner of this Note hereby irrevocably acknowledges receipt of a notice from
Owens-Brockway Glass Container Inc. (the “Company”) regarding the right of
holders to elect to require the Company to purchase the Notes and requests and
instructs the Company to repay the entire principal amount of this Note, or the
portion thereof (which is $1,000 or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture at the price of 100%
of such entire principal amount or portion thereof, together with accrued and
unpaid interest to, but excluding, the Fundamental Change Purchase Date to the
registered holder hereof.  Capitalized
terms used herein but not defined shall have the meanings ascribed to such
terms in the Indenture.  The Notes shall
be purchased by the Company as of the Fundamental Change Purchase Date pursuant
to the terms and conditions specified in the Indenture.

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature(s):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
							

 

NOTICE: The above signatures
of the holder(s) hereof must correspond with the name as written upon the
face of the Notes in every particular without alteration or enlargement or any
change whatsoever.

 

	
  Notes Certificate Number
  (if applicable):

  	
   

  	
   

  
	
   

  
	
  Principal amount to be
  purchased (if less than all, must be $1,000 or integral multiples thereof):

  
	
   

  	
   

  
	
   

  
	
  Social Security or Other
  Taxpayer Identification Number:

  	
   

  	
   

  
					

 

A-13

 

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                           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 other side of this Note.

  
							

 

A-14

 

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF RESTRICTED
NOTES

 

This
certificate relates to
$                  
principal amount of Notes held in (check applicable space)
         book-entry or
           definitive form by
the undersigned.

 

The
undersigned (check one box below):

 

o                                    has requested
the Trustee by written order to deliver in exchange for its beneficial interest
in the Global Note held by the Depositary a Note or Notes in definitive,
registered form of authorized denominations and an aggregate principal amount
equal to its beneficial interest in such Global Note (or the portion thereof
indicated above);

 

o                                    has requested
the Trustee by written order to exchange or register the transfer of a Note or
Notes.

 

The
undersigned confirms that such Notes are being transferred in accordance with
its terms:

 

CHECK
ONE BOX BELOW

 

(1)                                  o                                    to the Company
or OI Inc. or one of its other Subsidiaries; or

 

(2)                                  o                                    to a person you
reasonably believe is a “qualified institutional buyer” (as defined in
Rule 144A under the Securities Act of 1933) that is purchasing for its own
account or for the account of another “qualified institutional buyer” and to
whom notice is given that such transfer is being made in reliance on Rule 144A,
in each case pursuant to and in compliance with Rule 144A under the
Securities Act of 1933.

 

Unless
one of the boxes is checked, the Trustee will refuse to register any of the
Notes evidenced by this certificate in the name of any Person other than the
registered Holder thereof.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Your
  Signature

  
	
   

  	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
  Signature
  must be guaranteed by a participant in a recognized signature guaranty
  medallion program or other signature guarantor acceptable to the Trustee

  	
   

  	
  Signature
  of Signature Guarantee

  
				

 

A-15

 

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.

 

The
undersigned represents and warrants that it is purchasing this Note for its own
account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a “qualified institutional buyer”
within the meaning of Rule 144A under the Securities Act of 1933, and is
aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned’s foregoing representations in order to claim the exemption
from registration provided by Rule 144A.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE:
  To be executed by an executive officer

  

 

A-16

 

EXHIBIT B

 

FORM OF RESTRICTED LEGEND
FOR OI INC. 

COMMON STOCK ISSUED UPON EXCHANGE

 

THIS SECURITY HAS NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘SECURITIES
ACT’’), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT
IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY, EXCEPT (A) TO
OWENS-ILLINOIS, INC. OR A SUBSIDIARY OF OWENS-ILLINOIS, INC.; (B) UNDER
A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT; (C) TO A PERSON THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A ADOPTED UNDER THE SECURITIES ACT)
THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER AND TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, ALL IN COMPLIANCE WITH RULE 144A (IF AVAILABLE); OR (D) UNDER
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT; AND (2) THAT IT WILL, PRIOR TO ANY TRANSFER OF THIS
SECURITY IN ACCORDANCE WITH (1)(D), FURNISH TO THE TRANSFER AGENT AND
OWENS-ILLINOIS, INC. SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS MAY BE REQUIRED TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
IN ACCORDANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

 

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

 

B-1

 

ASSIGNMENT FORM

 

To
assign this Security, fill in the form below:

 

I
or we assign and transfer this Security to

 

(Print
or type assignee’s name, address and zip code)

 

(Insert
assignee’s soc. sec. or tax I.D. No.)

 

and
irrevocably appoint                           agent
to transfer this Security 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 other side of this Security.

  
							

 

B-2

 

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF SHARES OF
RESTRICTED OI INC. COMMON STOCK

 

This
certificate relates to
                  
shares of common stock, par value $0.01 per share, of Owens-Illinois, Inc.
(the “Securities”) held in (check applicable space)
         book-entry or
           definitive form by
the undersigned.

 

The
undersigned (check one box below):

 

o                                    has requested
the Transfer Agent by written order to deliver in exchange for its beneficial
interest in the Securities held by the Depositary Securities in definitive,
registered form of authorized shares in an equal number to the Securities (or
the portion thereof indicated above);

 

o                                    has requested
the Transfer Agent by written order to exchange or register the transfer of
Securities.

 

The
undersigned confirms that such Securities are being transferred in accordance
with its terms:

 

CHECK
ONE BOX BELOW

 

(1)                                  o                                    to the Company
or OI Inc. or one of its other Subsidiaries; or

 

(2)                                  o                                    pursuant to an
effective registration statement under the Securities Act of 1933;

 

(3)                                  o                                    to a person you
reasonably believe is a “qualified institutional buyer” (as defined in
Rule 144A under the Securities Act of 1933) that is purchasing for its own
account or for the account of another “qualified institutional buyer” and to
whom notice is given that such transfer is being made in reliance on Rule 144A,
in each case pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or

 

(4)                                  o                                    pursuant to
another available exemption from the registration requirements under the
Securities Act.

 

Unless
one of the boxes is checked, the Transfer Agent will refuse to register any of
the Securities evidenced by this certificate in the name of any Person other
than the registered Holder thereof; provided, however, that if box (4) is checked, the transfer agent
may require, prior to registering any such transfer of the shares of OI Inc.
Common Stock, such legal opinions, certifications and other information OI Inc.
has reasonably requested to confirm that such transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Your
  Signature

  

 

B-3

 

	
  Signature
  Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
  Signature
  must be guaranteed by a participant in a recognized signature guaranty medallion
  program or other signature guarantor acceptable to the Transfer Agent

  	
   

  	
  Signature
  of Signature Guarantee

  
				

 

TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.

 

The
undersigned represents and warrants that it is purchasing the Securities for
its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a “qualified
institutional buyer” within the meaning of Rule 144A under the Securities
Act of 1933, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding
OI Inc. as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned’s foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE:  To be executed by an executive officer

  

 

B-4Exhibit
4.1

 

EXECUTION
COPY

 

 

OWENS-BROCKWAY GLASS CONTAINER INC.

 

the Company

 

and

 

The Guarantors set forth in Annex A attached hereto

 

the Guarantors

 

3.00% Exchangeable Senior Notes due 2015

 

 

INDENTURE

 

Dated as of May 7, 2010

 

 

U.S. Bank National Association,

 

as Trustee

 

 

 

TABLE OF CONTENTS

	
   

  	
  Page

  
	
   

  	
   

  
	
  Article I Definitions and
  Incorporation by Reference

  	
  1

  
	
   

  	
   

  
	
  Section 1.01

  	
   

  	
  Definitions

  	
  1

  
	
  Section 1.02

  	
   

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
  15

  
	
  Section 1.03

  	
   

  	
  Rules of
  Construction

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  Article II The Notes

  	
  16

  
	
   

  	
   

  
	
  Section 2.01

  	
   

  	
  Designation;
  Amount and Issuance of Notes

  	
  16

  
	
  Section 2.02

  	
   

  	
  Form,
  Dating and Denomination; Execution and Authentication

  	
  17

  
	
  Section 2.03

  	
   

  	
  Payment
  at Maturity; Payment of Interest

  	
  19

  
	
  Section 2.04

  	
   

  	
  Registrar
  and Paying Agent

  	
  19

  
	
  Section 2.05

  	
   

  	
  Paying
  Agent to Hold Money in Trust

  	
  20

  
	
  Section 2.06

  	
   

  	
  Holder
  Lists

  	
  20

  
	
  Section 2.07

  	
   

  	
  Exchange
  and Registration of Transfer of Notes; Restrictions on Transfer

  	
  21

  
	
  Section 2.08

  	
   

  	
  Replacement
  Notes

  	
  24

  
	
  Section 2.09

  	
   

  	
  Outstanding
  Notes

  	
  25

  
	
  Section 2.10

  	
   

  	
  Temporary
  Notes

  	
  25

  
	
  Section 2.11

  	
   

  	
  Cancellation

  	
  25

  
	
  Section 2.12

  	
   

  	
  Defaulted
  Interest

  	
  26

  
	
  Section 2.13

  	
   

  	
  CUSIP
  Numbers and ISINs

  	
  26

  
	
  Section 2.14

  	
   

  	
  Automatic
  Exchange from Restricted OI Inc. Common Stock to Unrestricted OI Inc. Common
  Stock

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  Article III Purchases Upon a
  Fundamental Change

  	
  27

  
	
   

  	
   

  
	
  Section 3.01

  	
   

  	
  Purchase
  at Option of Holder Upon a Fundamental Change

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  Article IV Covenants

  	
  30

  
	
   

  	
   

  
	
  Section 4.01

  	
   

  	
  Payment
  of Notes

  	
  30

  
	
  Section 4.02

  	
   

  	
  Commission
  Reports

  	
  30

  
	
  Section 4.03

  	
   

  	
  Compliance
  Certificate

  	
  31

  
	
  Section 4.04

  	
   

  	
  Notice
  of Defaults

  	
  31

  
	
  Section 4.05

  	
   

  	
  Registration
  Default Additional Interest

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  Article V Successor Company
  or Successor Guarantor

  	
  32

  
	
   

  	
   

  
	
  Section 5.01

  	
   

  	
  When
  the Company, OI Group or OI Inc. May Merge or Transfer Assets

  	
  32

  
	
  Section 5.02

  	
   

  	
  Assignment
  of Obligations

  	
  33

  

 

i

 

	
  Article VI Defaults and
  Remedies

  	
  34

  
	
   

  	
   

  
	
  Section 6.01

  	
   

  	
  Events
  of Default

  	
  34

  
	
  Section 6.02

  	
   

  	
  Acceleration

  	
  36

  
	
  Section 6.03

  	
   

  	
  Other
  Remedies

  	
  36

  
	
  Section 6.04

  	
   

  	
  Waiver
  of Past Defaults

  	
  36

  
	
  Section 6.05

  	
   

  	
  Control
  by Majority

  	
  37

  
	
  Section 6.06

  	
   

  	
  Limitation
  on Suits

  	
  37

  
	
  Section 6.07

  	
   

  	
  Rights
  of Holders to Receive Payment

  	
  38

  
	
  Section 6.08

  	
   

  	
  Collection
  Suit by Trustee

  	
  38

  
	
  Section 6.09

  	
   

  	
  Trustee
  May File Proofs of Claim

  	
  38

  
	
  Section 6.10

  	
   

  	
  Priorities

  	
  38

  
	
  Section 6.11

  	
   

  	
  Undertaking
  for Costs

  	
  39

  
	
  Section 6.12

  	
   

  	
  Waiver
  of Stay or Extension Laws

  	
  39

  
	
  Section 6.13

  	
   

  	
  Failure
  to Comply with Reporting Covenant

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  Article VII Trustee

  	
  40

  
	
   

  	
   

  
	
  Section 7.01

  	
   

  	
  Duties
  of Trustee

  	
  40

  
	
  Section 7.02

  	
   

  	
  Rights
  of Trustee

  	
  41

  
	
  Section 7.03

  	
   

  	
  Individual
  Rights of Trustee

  	
  43

  
	
  Section 7.04

  	
   

  	
  Trustee’s
  Disclaimer

  	
  43

  
	
  Section 7.05

  	
   

  	
  Notice
  of Defaults

  	
  43

  
	
  Section 7.06

  	
   

  	
  Compensation
  and Indemnity

  	
  43

  
	
  Section 7.07

  	
   

  	
  Replacement
  of Trustee

  	
  44

  
	
  Section 7.08

  	
   

  	
  Successor
  Trustee by Merger

  	
  45

  
	
  Section 7.09

  	
   

  	
  Eligibility;
  Disqualification

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  Article VIII Discharge of
  Indenture

  	
  46

  
	
   

  	
   

  
	
  Section 8.01

  	
   

  	
  Discharge
  of Liability on Notes

  	
  46

  
	
  Section 8.02

  	
   

  	
  Application
  of Trust Money

  	
  46

  
	
  Section 8.03

  	
   

  	
  Repayment
  to Company

  	
  46

  
	
  Section 8.04

  	
   

  	
  Reinstatement

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  Article IX Amendments and
  Waivers

  	
  47

  
	
   

  	
   

  
	
  Section 9.01

  	
   

  	
  Without
  Consent of Holders

  	
  47

  
	
  Section 9.02

  	
   

  	
  With
  Consent of Holders

  	
  48

  
	
  Section 9.03

  	
   

  	
  Revocation
  and Effect of Consents and Waivers

  	
  49

  
	
  Section 9.04

  	
   

  	
  Notation
  on or Exchange of Notes

  	
  49

  
	
  Section 9.05

  	
   

  	
  Trustee
  to Sign Amendments

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  Article X Guarantees

  	
  50

  
	
   

  	
   

  
	
  Section 10.01

  	
   

  	
  Guarantees

  	
  50

  
	
  Section 10.02

  	
   

  	
  Limitation
  on Liability

  	
  52

  
	
  Section 10.03

  	
   

  	
  Execution
  and Delivery of Guarantees

  	
  52

  

 

ii

 

	
  Section 10.04

  	
   

  	
  Successors
  and Assigns

  	
  52

  
	
  Section 10.05

  	
   

  	
  No
  Waiver

  	
  52

  
	
  Section 10.06

  	
   

  	
  Right
  of Contribution

  	
  52

  
	
  Section 10.07

  	
   

  	
  No
  Subrogation

  	
  52

  
	
  Section 10.08

  	
   

  	
  Additional
  Guarantors; Reinstatement of Guarantees

  	
  53

  
	
  Section 10.09

  	
   

  	
  Modification

  	
  53

  
	
  Section 10.10

  	
   

  	
  Release
  of Guarantor

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  Article XI Exchange of Notes

  	
  54

  
	
   

  	
   

  
	
  Section 11.01

  	
   

  	
  Exchange
  Rights

  	
  54

  
	
  Section 11.02

  	
   

  	
  Exchange
  Procedures; Settlement Upon Exchange; Fractional Shares

  	
  56

  
	
  Section 11.03

  	
   

  	
  Adjustment
  to Exchange Rate Upon Exchange Upon a Make-Whole Fundamental Change

  	
  59

  
	
  Section 11.04

  	
   

  	
  Adjustment
  of Exchange Rate

  	
  61

  
	
  Section 11.05

  	
   

  	
  Recapitalizations,
  Reclassifications and Changes of OI Inc. Common Stock

  	
  69

  
	
  Section 11.06

  	
   

  	
  Certain
  Covenants

  	
  70

  
	
  Section 11.07

  	
   

  	
  Notice
  to Holders Prior to Certain Actions

  	
  70

  
	
  Section 11.08

  	
   

  	
  Shareholder
  Rights Plans

  	
  71

  
	
  Section 11.09

  	
   

  	
  Responsibility
  of Trustee

  	
  71

  
	
  Section 11.10

  	
   

  	
  Certain
  Other Adjustments

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  Article XII Miscellaneous

  	
  72

  
	
   

  	
   

  
	
  Section 12.01

  	
   

  	
  Indenture
  Subject to Trust Indenture Act

  	
  72

  
	
  Section 12.02

  	
   

  	
  Notices

  	
  72

  
	
  Section 12.03

  	
   

  	
  Communication
  by Holders with Other Holders

  	
  74

  
	
  Section 12.04

  	
   

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
  74

  
	
  Section 12.05

  	
   

  	
  Statements
  Required in Certificate or Opinion

  	
  74

  
	
  Section 12.06

  	
   

  	
  When
  Notes Disregarded

  	
  74

  
	
  Section 12.07

  	
   

  	
  Rules by
  Trustee, Paying Agent and Registrar

  	
  74

  
	
  Section 12.08

  	
   

  	
  GOVERNING
  LAW

  	
  75

  
	
  Section 12.09

  	
   

  	
  No
  Recourse Against Others

  	
  75

  
	
  Section 12.10

  	
   

  	
  Successors

  	
  75

  
	
  Section 12.11

  	
   

  	
  Multiple
  Originals

  	
  75

  
	
  Section 12.12

  	
   

  	
  Effect
  of Headings, Table of Contents, Etc

  	
  75

  
	
  Section 12.13

  	
   

  	
  Indenture
  Controls

  	
  75

  
	
  Section 12.14

  	
   

  	
  Calculations

  	
  75

  
	
  Section 12.15

  	
   

  	
  Severability

  	
  75

  

 

	
  Annex A

  	
   

  	
  -

  	
   

  	
  Guarantors

  
	
  Exhibit A

  	
   

  	
  -

  	
   

  	
  Form of
  Note (including forms of Exchange Notice, Fundamental Change Purchase Notice,
  Assignment and Certificate to be Delivered Upon Exchange or Registration of
  Restricted Notes)

  

 

iii

 

	
  Exhibit B

  	
   

  	
  -

  	
   

  	
  Form of
  Restricted Legend for OI Inc. Common Stock Issued Upon Exchange (including
  form of Assignment and Form of Certificate to be Delivered Upon Exchange
  or Registration of Shares of Restricted OI Inc. Common Stock)

  

 

iv

 

INDENTURE
dated as of May 7, 2010, among Owens-Brockway Glass Container Inc., a
Delaware corporation (the “Company”), Owens-Illinois, Inc. (“OI Inc.”),  the Guarantors (as defined herein) and U.S.
Bank National Association, a national banking association, as trustee (the “Trustee”).

 

Each
party agrees as follows for the benefit of the other parties and for the equal
and ratable benefit of the Holders of the Company’s 3.00% Exchangeable Senior
Notes due 2015 issued on the date hereof (the “Original Notes”) and any
Additional Notes (as defined herein) that may be issued after the date hereof
(all such Notes being referred to collectively as the “Notes”).  The aggregate principal amount of the
Original Notes shall be $600,000,000 (or $690,000,000 if the Initial Purchasers
exercise their over-allotment option in full in accordance with the Purchase
Agreement).  Subject to the conditions
and compliance with the covenants set forth herein, the Company may issue an
unlimited aggregate principal amount of Additional Notes.

 

Article I

 

Definitions and Incorporation by Reference

 

Section 1.01                                Definitions.
The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes
of this Indenture and of any indenture supplemental hereto shall have the
respective meanings specified in this Section 1.01.

 

“Additional
Notes” means Notes issued under the terms of this Indenture subsequent to the
Issue Date.

 

“Additional
Shares” has the meaning specified in Section 11.03(a).

 

“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 the purposes
of this definition, “control” (including, with correlative meanings, the terms “controlling,”
“controlled by” and “under common control with”), as used with respect to any
Person, means 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.

 

“Agent
Members” has the meaning specified in Section 2.07(b)(vi).

 

“Automatic
Exchange” has the meaning specified in Section 2.14.

 

“Automatic
Exchange Notice” has the meaning specified in Section 2.14.

 

“Bankruptcy
Law” has the meaning specified in Section 6.01.

 

“Bid
Solicitation Agent” means the agent appointed by the Company to determine the
Trading Price of the Notes.  The Bid
Solicitation Agent shall initially be the Company;

 

1

 

provided, however, that the Company may appoint another Person
(including, without limitation, the Trustee, if it so agrees) as the Bid
Solicitation Agent without prior notice to the Holders.

 

“Board
of Directors” means as to any Person, the board of directors of such Person
(or, if such Person is a partnership, the board of directors or other governing
body of the general partner of such Person) or any duly authorized committee
thereof.

 

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

 

“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:

 

(a) in the case of a corporation, corporate stock;

 

(b) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;

 

(c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and

 

(d) 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
Settlement Averaging Period” with respect to any Note means:

 

(a)                                  with respect to Exchange
Notices received during the period beginning on, and including, March 1,
2015, the 20 consecutive Trading Day period beginning on, and including, the
22nd Scheduled Trading Day prior to the Maturity Date; and

 

(b)                                 in all other
cases, the 20 consecutive Trading Day period beginning on, and including, the
third Trading Day immediately following the related Exchange Date.

 

“Cash
Settlement Averaging Period Market Disruption Event” means:

 

(a)                                  a failure by the primary
exchange or quotation system on which OI Inc. Common Stock trades or is quoted
to open for trading during its regular trading session; or

 

(b)                                 the occurrence
or existence prior to 1:00 p.m. on any Trading Day for OI Inc. Common
Stock, of an aggregate one half-hour period of any suspension or limitation
imposed on trading (by reason of movements in price exceeding limits permitted
by the stock exchange or otherwise) in OI Inc.  Common Stock or in any options, contracts or
future contracts relating to OI Inc. Common Stock.

 

2

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

“Company”
means the party named as such in the Preamble to this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein, each other obligor on the Notes.

 

“Corporate
Trust Office” means the principal office of the Trustee at which at any time
its corporate trust business shall be administered, which office at the date
hereof is located at 60 Livingston Avenue, EP-MN-WS3C St. Paul, MN 55107-1419,
Attn:  Corporate Trust Administration, or
such other address as the Trustee may designate from time to time by notice to
the Holders and the Company, or the principal corporate trust office of any
successor Trustee (or such other address as such successor Trustee may
designate from time to time by notice to the Holders and the Company).

 

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

 

“Custodian”
has the meaning specified in Section 6.01.

 

“Daily
Exchange Value” means, for each of the 20 consecutive Trading Days during the
relevant Cash Settlement Averaging Period, 5% of the product of:

 

(a)                                  the applicable Exchange Rate
on such Trading Day; and

 

(b)                                 the daily VWAP
of OI Inc. Common Stock on such Trading Day.

 

“Daily
Settlement Amount” for each of the 20 consecutive Trading Days during the Cash
Settlement Averaging Period shall consist of:

 

(a)                                  cash equal to the lesser of (i) $50.00
per Note and (ii) the Daily Exchange Value; and

 

(b)                                 if the Daily
Exchange Value exceeds $50.00, a number of shares of OI Inc. Common Stock equal
to (i) the difference between the Daily Exchange Value and $50.00, divided by (ii) the daily VWAP of OI
Inc. Common Stock for such Trading Day.

 

“Daily
VWAP” of OI Inc. Common Stock means, for each of the 20 consecutive Trading
Days during the relevant Cash Settlement Averaging Period, the per share
volume-weighted average price as displayed under the heading “Bloomberg VWAP”
on Bloomberg page “OI <equity> AQR” (or its equivalent successor if
such page is not available) in respect of the period from the scheduled
open of trading until the scheduled close of trading of the primary trading
session on such Trading Day (or if such volume-weighted average price is
unavailable,

 

3

 

the
market value of one share of OI Inc. Common Stock on such Trading Day as
determined by a U.S. nationally recognized independent investment banking firm
retained for this purpose by the Company). 
Daily VWAP will be determined without regard to after-hours trading or
any other trading outside of the regular trading session.

 

“Default”
means any event which is, or after notice or passage of time or both would be,
an Event of Default.

 

“Depositary”
means the clearing agency registered under the Exchange Act that is designated
to act as the Depositary for the Global Notes. 
DTC shall be the initial Depositary, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, “Depositary” shall mean or include such successor.

 

“Disqualified
Stock” has the meaning specified in any Senior Note Indenture, and to the
extent that none of the Senior Note Indentures remains in effect, has the
meaning specified in the last of the Senior Note Indentures that ceases to be
in effect as of the last day that such Senior Note Indenture was in effect.

 

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

 

“DTC”
means The Depository Trust Company.

 

“Effective
Date” means the date on which a Make-Whole Fundamental Change occurs or becomes
effective.

 

“Effective
Default” has the meaning specified in the Registration Rights Agreement.

 

“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).

 

“Event
of Default” has the meaning specified in Section 6.01.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.

 

“Exchange
Agent” means the agent appointed by the Company to which Notes may be presented
for exchange.  The Exchange Agent
appointed by the Company shall initially be U.S. Bank National Association.

 

“Exchange
Consideration” has the meaning specified in Section 11.02(b).

 

“Exchange
Date” has the meaning specified in Section 11.02(a).

 

“Exchange
Notice” has the meaning specified in Section 11.02(a).

 

4

 

“Exchange
Obligation” has the meaning specified in Section 11.01.

 

“Exchange
Price” on any date of determination means $1,000 divided by the Exchange Rate
as of such date.

 

“Exchange
Rate” has the meaning specified in Section 11.01.

 

“Ex-Dividend
Date” is the first date on which the shares of OI Inc. Common Stock trade on
the applicable exchange or in the applicable market, regular way, without the
right to receive the issuance, dividend or distribution in question.

 

“Expiration
Date” has the meaning specified in Section 11.04(e).

 

“Expiration
Time” has the meaning specified in Section 11.04(e).

 

“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.

 

“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.

 

“Fundamental
Change” will be deemed to have occurred at the time after the Issue Date when
any of the following occurs:

 

(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) or Section 14(d)(2) of
the Exchange Act, or any successor provision), including any group acting for
the purpose of acquiring, holding or disposing of securities (within the
meaning of Rule 13d-5(b)(1) under the Exchange Act), in a single
transaction or a related series of transactions, by way of the purchase of
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange
Act, or any successor provision) of more than 50% of the total voting power of
the Voting Stock of OI Inc.;

 

(2)                                  consummation of
(a) any recapitalization, reclassification or change of OI Inc. Common
Stock (other than changes resulting from a subdivision or combination) or any
binding share exchange, consolidation or merger of OI Inc. pursuant to which OI
Inc. Common Stock will be exchanged into cash, securities or other property or (b) any
sale, lease or other transfer in one transaction or a series of transactions of
all or substantially all of the consolidated assets of OI Inc. and its
Subsidiaries, taken as a whole, to any person other than one or more of the
Subsidiaries of OI Inc. (any such exchange, offer, consolidation, merger,
transaction or series of transactions being referred to herein as an “Event”); provided, however, that any such Event
where the Holders of more than 50% of the voting power of OI Inc. Common Stock
immediately prior to such Event, own, directly or indirectly, more than 50% of
the voting power of all classes of common equity

 

5

 

of
the continuing or surviving person or transferee or the parent thereof
immediately after such event shall not be a Fundamental Change;

 

(3)                                  the
consolidation or merger of the Company with or into any person, other than OI
Inc. or one or more Subsidiaries of OI Inc., in any such event pursuant to a
transaction in which any of the outstanding Voting Stock of the Company 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), becomes, directly or indirectly, the beneficial owner (as
defined in clause (1)) of 50% or more of the voting power of all classes of Voting
Stock of the Company;

 

(4)                                  the
stockholders of OI Inc. approve any plan or proposal for the liquidation or
dissolution of OI Inc.;

 

(5)                                  the OI Inc.
Common Stock (or other common stock into which the notes are then exchangeable)
ceases to be listed on at least one U.S. national securities exchange; or

 

(6)                                  the first day
on which OI Inc. fails to own 100% of the issued and outstanding Equity
Interests of OI Group.

 

provided, however, no transaction or event described in clause (2) above
will constitute a Fundamental Change, if at least 90% of the consideration,
excluding cash payments for fractional shares or made pursuant to dissenters’
appraisal rights,  in the transaction or
event that would otherwise have constituted a Fundamental Change consists of shares
of Publicly Traded Securities and as a result of this transaction or event the
Notes become exchangeable into such Publicly Traded Securities pursuant to Section 11.05,
excluding cash payments for fractional shares, subject to the provisions set
forth under Section 11.02.

 

Any
transaction that is a Fundamental Change under clauses (1) and (2) of
the definition thereof shall be a Fundamental Change only under clause (2) of
this definition of Fundamental Change.

 

After
any transaction in which OI Inc. Common Stock is replaced by securities of
another entity, should one occur, following completion of any related
Make-Whole Fundamental Change Period and any related Fundamental Change
Purchase Date, references to OI Inc. in the definition of Fundamental Change
shall apply to such other entity instead.

 

“Fundamental
Change Notice” has the meaning specified in Section 3.01(b).

 

“Fundamental
Change Purchase Date” has the meaning specified in Section 3.01(a).

 

6

 

“Fundamental
Change Purchase Notice” has the meaning specified in Section 3.01(c).

 

“Fundamental
Change Purchase Price” has the meaning specified in Section 3.01(a).

 

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

 

“Global
Notes” has the meaning specified in Section 2.02(b).

 

“Global
Notes Legend” means the legend set forth under that caption in Exhibit A
to the Indenture.

 

“Guarantee”
has the meaning specified in Section 10.01.

 

“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 and
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.

 

“Guarantor”
refers to:

 

(a)                                  OI Group;

 

(b)                                 each direct or
indirect Domestic Subsidiary of OI Group (other than the Company) that
guarantees the Credit Agreement as of Issue Date; and

 

(c)                                  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:

 

(a)                                   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;

 

(b)                                  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

 

7

 

(c)                                   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 the Person in whose name a Note is registered on the Registrar’s books.

 

“incur”
means issue, assume, guarantee, incur or otherwise become liable for.

 

“Indebtedness”
means, with respect to any specified Person, any indebtedness of such Person,
whether or not contingent, in respect of:

 

(a)                                   borrowed
money;

 

(b)                                  evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof);

 

(c)                                   banker’s
acceptances;

 

(d)                                  representing
Capital Lease Obligations;

 

(e)                                  the balance
deferred and unpaid of the purchase price of any property, except any such
balance that constitutes an accrued liability or trade payable; or

 

(f)                                     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.

 

“Initial
Purchasers” means Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Goldman, Sachs &
Co., Barclays Capital Inc., BNP Paribas Securities Corp., Credit Agricole
Securities (USA) Inc., HSBC Securities (USA) Inc., and Scotia Capital (USA)
Inc.

 

“Interest
Payment Date” has the meaning specified in Section 2.03(b).

 

8

 

“Issue
Date” means May 7, 2010.

 

“Last
Reported Sale Price” of OI Inc. Common Stock on any date means:

 

(a)                                   the closing sale price per
share (or if no closing sale price is reported, the average of the last bid
price and the last ask price or, if more than one in either case, the average
of the average last bid price and the average last ask price) on that date as
reported in composite transactions for the principal U.S. securities exchange
on which OI Inc. Common Stock is listed for trading;

 

(b)                               if OI Inc. Common Stock is
not listed for trading on a U.S. securities exchange on the relevant date, the
last quoted bid price for OI Inc. Common Stock in the over-the-counter market
on the relevant date as reported by Pink OTC Markets Inc. or a similar
organization; or

 

(c)                                if OI Inc. Common Stock is
not so quoted, as determined by a U.S. nationally recognized independent
investment banking firm selected by the Company for this purpose.

 

The
Last Reported Sale Price of OI Inc. Common Stock will be determined without
reference to after-hours or extended market trading.“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.

 

“Make-Whole
Fundamental Change” means any transaction or event described under clause (1),
(2), (4) or (5) under the definition of “Fundamental Change” (except
in the case of a Fundamental Change described in clause (2) of the
definition thereof, determined without regard to the proviso in such
definition, but subject to the paragraphs immediately following clause (6) of
the definition thereof)

 

“Make-Whole
Fundamental Change Period” means the period from, and including, the Effective
Date of a Make-Whole Fundamental Change to, and including:

 

(a)                                  if such Make-Whole
Fundamental Change also constitutes a Fundamental Change, the Business Day
immediately preceding the related Fundamental Change Purchase Date; or

 

(b)                                 if such
Make-Whole Fundamental Changes does not also constitute a Fundamental Change,
the 20th Business Day immediately following the Effective Date of such Make-Whole
Fundamental Change.

 

“Market
Disruption Event,” means, if OI Inc. Common Stock is listed for trading on the
New York Stock Exchange or another U.S. national or regional securities
exchange, the

 

9

 

occurrence
or existence during the one-half hour period ending on the scheduled close of
trading on any Trading Day of any material suspension or limitation imposed on
trading (by reason of movements in price exceeding limits permitted by the
stock exchange or otherwise) in OI Inc. Common Stock or in any options,
contracts or future contracts relating to OI Inc. Common Stock on the primary
market for the trading of such options, contracts or future contracts.

 

“Maturity
Date” means June 1, 2015.

 

“Note”
or “Notes” means the Company’s 3.00% Exchangeable Senior Notes due 2015.

 

“Notes
Custodian” means the custodian with respect to a Global Note (as appointed by
the Depositary) or any successor person thereto, who shall initially be the
Trustee.

 

“Notice
of Default” has the meaning specified in Section 4.04.

 

“Obligations”
has the meaning specified in Section 10.01.

 

“Offering
Memorandum” means the final offering memorandum dated May 3, 2010 with
respect to the offering and sale of the Notes.

 

“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 or
OI Inc., as the case may be.

 

“Officers’
Certificate” means a certificate signed on behalf of the Company by two
Officers of the Company or OI Inc., as the case may be.  One of the officers executing an Officers’
Certificate must be the Chief Executive Officer, the President, the Chief
Financial Officer, the Treasurer or the principal accounting officer of the
Company or OI Inc., as the case may be.

 

“OI
Group” means Owens-Illinois Group, Inc.

 

“OI
Inc.” means Owens-Illinois, Inc.

 

“OI
Inc. Common Stock” means the shares of common stock, par value $0.01 per share,
of OI Inc. as such stock may be constituted from time to time.  Subject to the provisions of Section 11.05,
shares issuable on exchange of Notes shall include only shares of OI Inc.
Common Stock or shares of any class or classes of common stock resulting from
any reclassification or reclassifications thereof; provided, however,
that if at any time there shall be more than one such resulting class, the shares
so issuable on exchange of Notes shall include shares of all such classes, and
the shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.

 

10

 

 

“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.

 

“Original
Notes” has the meaning specified in the Preamble to this Indenture.

 

“Paying
Agent” has the meaning specified in Section 2.04(a).

 

“Payment
Default” has the meaning specified in Section 6.01(h)(i).

 

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

 

“protected
purchaser” has the meaning specified in Section 2.08.

 

“Publicly
Traded Security” means common stock that is traded or equivalent common equity
listed on a U.S. national securities exchange or that will be so traded when
issued or exchanged in connection with the relevant transaction or event.

 

“Purchase
Agreement” means (a) the Purchase Agreement dated May 3, 2010, among
the Company, OI Inc., OI Group and the Guarantors and the Initial Purchasers
and (b) any other similar Purchase Agreement relating to Additional Notes.

 

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

 

“Reference
Property” has the meaning specified in Section 11.05.

 

“Register”
has the meaning specified in Section 2.04(a).

 

“Registrar”
has the meaning specified in Section 2.04(a).

 

“Registration
Default” has the meaning specified in the Registration Rights Agreement.

 

“Registration
Default Additional Interest” has the meaning specified in the Registration
Rights Agreement.

 

“Registration
Rights Agreement” means (a) the Registration Rights Agreement dated as of May 7,
2010, among the Company, OI Inc. and the Initial Purchasers, pursuant to which
OI Inc. will file or have on file with the Commission a shelf registration
statement pursuant to Rule 415 under the covering the resale of the OI
Inc. Common Stock, subject to the terms and conditions therein specified.

 

“Regular
Record Date” means, with respect to any Interest Payment Date, the May 15
and November 15 (whether or not a Business Day) preceding the applicable June 1
and December 1 Interest Payment Date, respectively.

 

11

 

“Reorganization
Event” has the meaning specified in Section 11.05.

 

“Reporting
Default Additional Interest” means all amounts, if any, payable pursuant to Section 6.13.

 

“Resale
Restriction Termination Date” has the meaning specified in Section 2.07(d).

 

“Restricted
Global Note” has the meaning specified in Section 2.07(c).

 

“Restricted
Legend” means the legend set forth in Exhibit A, in the case of Notes or Exhibit B,
in the case of OI Inc. Common Stock.

 

“Restricted
OI Inc. Common Stock” has the meaning specified in Section 2.07(c).

 

“Restricted
Securities” has the meaning specified in Section 2.07(c).

 

“Restricted
Subsidiary” means any Subsidiary of OI Group that is not an Unrestricted
Subsidiary.

 

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

 

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

 

“Schedule
TO” means a Tender Offer Statement under Section 14(d)(1) or 13(e)(1) of
the Exchange Act.

 

“Scheduled
Trading Day” means any day that is scheduled to be a Trading Day on the primary
U.S. securities exchange or market on which OI Inc. Common Stock is listed or
admitted for trading.  If OI Inc. Common
Stock is not so listed or admitted for trading, “Scheduled Trading Day” means a
Business Day.

 

“SEC”
means the Securities and Exchange Commission.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.

 

“Senior
Note Indenture” means any of the following:

 

(a)                                  the indenture,
dated May 6, 2003, among the Company, the guarantors named therein and
U.S. Bank National Association, as trustee, pursuant to which the 8.25% senior
notes due 2013 of the Company were issued;

 

(b)                                 the indenture,
dated December 1, 2004, among the Company, the guarantors named therein
and Law Debenture Trust Company of New York, as trustee, Deutsche Bank Trust
Company Americas, as registrar and dollar notes paying agent, and Deutsche Bank
AG, acting through its London Branch, as euro notes paying agent, pursuant to
which the dollar-

 

12

 

denominated 6.75% senior
notes due 2014 of the Company and the euro-denominated 6.75% senior notes due
2014 of the Company were issued; and

 

(c)                                  the indenture,
dated May 12, 2009, among the
Company, the guarantors named therein and U.S. Bank National Association, as
trustee, pursuant to which the 7.375% senior notes due 2016 of the Company were
issued.

 

“Significant
Subsidiary” of a Person means a Subsidiary of such Person that would be a “significant
subsidiary” of such Person within the meaning of Rule 1-02(w) under
Regulation S-X of the Securities Act, as such Regulation is in effect on
the Issue Date.

 

“Spin-Off”
has the meaning specified in Section 11.04(c).

 

“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.

 

“Stock
Price” means the price paid (or deemed paid) per share of OI Inc. Common Stock
in the Make-Whole Fundamental Change. If the holders of OI Inc. Common Stock
receive only cash in a Make-Whole Fundamental Change described in clause (2) of
the definition of Fundamental Change, the Stock Price shall be the cash amount
paid per share of OI Inc. Common Stock. 
In all other cases, the Stock Price shall be the average of the Last
Reported Sale Prices of OI Inc. Common Stock over the five Trading Day period
ending on, and including, the Trading Day immediately preceding the Effective
Date of the Make-Whole Fundamental Change.

 

“Subsidiary”
means, with respect to any specified Person:

 

(c)                                  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

 

(b)                                 any partnership (i) the
sole general partner or the managing general partner of which is such Person or
a Subsidiary of such Person or (ii) the only general partners of which are
such Person or one or more Subsidiaries of such Person (or any combination
thereof).

 

“Successor
Company” has the meaning specified in Section 5.01(a)(i).

 

“Successor
Guarantor” has the meaning specified in Section 5.01(b)(i).

 

“TIA”
means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as
in effect on the Issue Date.

 

13

 

“Trading
Day,” except for purposes of determining the Daily Settlement Amounts and the
Daily Exchange Values, means a day on which:

 

(a)                                  trading in OI Inc. Common
Stock generally occurs on the New York Stock Exchange or, if OI Inc. Common
Stock is not then listed on the New York Stock Exchange, on the principal other
U.S. national or regional securities exchange on which OI Inc. Common Stock is
then listed or, if OI Inc. Common Stock is not then listed on a U.S. national
or regional securities exchange, on the principal other market on which OI Inc.
Common Stock is then traded; and

 

(b)                                 there is no
Market Disruption Event.

 

If
OI Inc. Common Stock (or other security for which a Last Reported Sale Price
must be determined) is not so listed or traded, “Trading Day” means a Business
Day.

 

“Trading
Day,” solely for the purposes of determining the Daily Settlement Amounts and
the Daily Exchange Value, means:

 

(a)                                  a day during which trading
in OI Inc. Common Stock generally occurs on the primary exchange or quotation
system on which OI Inc. Common Stock then trades or is quoted; and

 

(b)                                 there is no
Cash Settlement Averaging Period Market Disruption Event.

 

If
the OI Inc. Common Stock (or other Security for which Daily VWAP must be
determined) is not so listed or traded, a Business Day.

 

“Trading
Price” per $1,000 principal amount of the Notes on any date of determination
means the average of the secondary market bid quotations obtained by the Bid
Solicitation Agent for $5.0 million principal amount of the Notes at
approximately 3:30 p.m., New York City time, on such determination date
from three independent U.S. nationally recognized securities dealers the
Company selects; provided that, if three such bids cannot reasonably be
obtained by the Bid Solicitation Agent but two such bids are obtained, then the
average of the two bids shall be used, and if only one such bid can reasonably
be obtained by the Bid Solicitation Agent, that one bid shall be used.  If the Bid Solicitation Agent cannot
reasonably obtain at least one bid for $5.0 million principal amount of the
Notes from a U.S. nationally recognized securities dealer, then the Trading
Price per $1,000 principal amount of Notes will be deemed to be less than 98%
of the product of the Last Reported Sale Price of OI Inc. Common Stock and the
applicable Exchange Rate.  If, upon
presentation of reasonable evidence by the Holder, the Company does not
instruct the Bid Solicitation Agent to make such determination, the Trading Price
per $1,000 principal amount of the Notes will be deemed to be less than 98% of
the product of the Last Reported Sale Price of OI Inc. Common Stock and the
applicable Exchange Rate on each day the Company fails to do so.

 

“Trading
Price Measurement Period” has the meaning specified in Section 11.01(b).

 

14

 

“Trustee”
means the party named as such in this Indenture until a successor replaces it
and, thereafter, means the successor.

 

“Trust
Officer” means, with respect to the Trustee:

 

(a)                                  any officer within the
Corporate Trust Office of the Trustee, including any vice president, managing
director, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such person’s knowledge of and familiarity with the
particular subject, and

 

(b)                                 who shall have
direct responsibility for the administration of this Indenture.

 

“Uniform
Commercial Code” means the New York Uniform Commercial Code as in effect from
time to time.

 

“Unrestricted
OI Inc. Common Stock” has the meaning specified in Section 2.14.

 

“Unrestricted
Subsidiary” means any Subsidiary of OI Group (other than the Company) that is
designated by the Board of Directors of OI Group as an ‘‘Unrestricted
Subsidiary’’ in accordance with the terms of any of the Senior Note Indentures,
and to the extent that all of the Senior Note Indentures cease to remain in
effect, means any Subsidiary of OI Group (other than the Company) that is
designated by the Board of Directors of OI Group as an ‘‘Unrestricted
Subsidiary’’ in accordance with the terms of the last of the Senior Note
Indentures that ceases to be in effect as of the last day that such Senior Note
Indentures was in effect.

 

“Valuation
Period” has the meaning specified in Section 11.04(c).

 

“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

 

“Wholly
Owned Subsidiary” is a Subsidiary of the Company, all the capital stock of
which (other than directors’ qualifying shares) is owned by the Company or
another Wholly Owned Subsidiary.

 

Section 1.02                                Incorporation
by Reference of Trust Indenture Act. 
This Indenture incorporates by reference certain provisions of the
TIA.  The following TIA terms have the
following meanings:

 

“Commission”
means the SEC.

 

“indenture
securities” means the Notes and the Guarantee.

 

“indenture
security holder” means a Holder.

 

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

 

15

 

“obligor”
on the indenture securities means the Company, and OI Inc. and any other
obligor on the Notes.

 

Section 1.03                                Rules of
Construction.  Unless the context
otherwise requires:

 

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

 

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

 

(c)                                   “or” is not
exclusive;

 

(d)                                 “including”
means including without limitation;

 

(e)                                  words in the
singular include the plural and words in the plural include the singular;

 

(f)                                    provisions
apply to successive events and transactions; and

 

(g)                                 all references
to “interest” shall include Registration Default Additional Interest, if any,
payable pursuant to Section 4.05 and Reporting Default Additional
Interest, if any,  payable pursuant to Section 6.13.

 

Article II

 

The Notes

 

Section 2.01                                Designation;
Amount and Issuance of Notes.  (a) 
The Notes shall be designated as “3.00% Exchangeable Senior Notes due 2015.”  The aggregate principal amount of Original
Notes which may be authenticated and delivered under this Indenture is
$600,000,000 (or $690,000,000 if the Initial Purchasers exercise their
over-allotment option in full in accordance with the Purchase Agreement).  An unlimited aggregate principal amount of
Additional Notes may be issued from time to time in accordance with Section 2.01(b).  Upon the execution of this Indenture, or from
time to time thereafter, Notes may be executed by the Company and delivered to
the Trustee for authentication.

 

(b)                                 The Company
shall be entitled, without notice to or the consent of the Holders, to issue
Additional Notes in an unlimited aggregate principal amount under this
Indenture with the same terms and with the same CUSIP numbers as the Notes
issued on the Issue Date, other than with respect to the date of issuance and
issue price; provided, however, that no Additional Notes may be
issued unless they will be fungible for U.S. Federal income tax and securities
law purposes with any other Notes issued under this Indenture.  The Original Notes issued on the Issue Date
and any Additional Notes shall rank equally and ratably and shall be treated as
a single class for all purposes under this Indenture.

 

With
respect to any Additional Notes issued after the Issue Date (except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 2.07, 2.08, 2.09,
2.10, 3.01(g), or 11.02(e)), there shall be

 

16

 

(a) established
in or pursuant to a resolution of the Board of Directors of the Company and (b) (i) set
forth or determined in the manner provided in an Officers’ Certificate or
(ii) established in one or more indentures supplemental hereto, prior to
the issuance of such Additional Notes:

 

(1)                                  the aggregate principal
amount of such Additional Notes to be authenticated and delivered under this
Indenture,

 

(2)                                  the issue price
and issuance date of such Additional Notes, including the date from which
interest on such Additional Notes shall accrue; and

 

(3)                                  if applicable,
that such Additional Notes shall be issuable in whole or in part in the form of
one or more Global Notes and, in such case, the respective depositaries for
such Global Notes, the form of any legend or legends which shall be borne by
such Global Notes in addition to or in lieu of those set forth in
Exhibit A hereto and any circumstances in which any such Global Note may
be exchanged in whole or in part for Additional Notes registered, or any
transfer of such Global Note in whole or in part may be registered, in the name
or names of Persons other than the depositary for such Global Note or a nominee
thereof.

 

If
any of the terms of any Additional Notes are established by action taken
pursuant to a resolution of the Board of Directors of the Company, a copy of an
appropriate record of such action shall be certified by the Secretary or any
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers’ Certificate or the indenture supplemental hereto
setting forth the terms of the Additional Notes.

 

Section 2.02                                Form, Dating
and Denomination; Execution and Authentication. 
(a) The Notes and the Trustee’s certificate of authentication shall
each be substantially in the form of Exhibit A hereto, which is hereby
incorporated in and expressly made a part of this Indenture.  The Notes may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company or the Guarantors are subject, if any, or usage (provided that any such
notation, legend or endorsement is in a form acceptable to the Company).

 

(b)                                 Each Note shall
be dated the date of its authentication. 
The Notes shall be issuable only in registered form without interest
coupons and only in minimum denominations of $1,000 and integral multiples of
$1,000 in excess thereof.

 

So
long as the Notes are eligible for book-entry settlement with the Depositary,
or unless otherwise required by law, or otherwise contemplated by Section 2.08(b),
all of the Notes will be represented by one or more Notes in global form
registered in the name of the Depositary or the nominee of the Depositary (the “Global
Notes”).  The transfer and exchange of
beneficial interests in any such Global Notes shall be effected through the
Depositary in accordance with this Indenture and the applicable procedures of
the Depositary.  Except as provided in Section 2.07(b),
beneficial owners of a Global Note shall not be entitled to have certificates
registered in their names, will not receive or be entitled to receive physical
delivery of certificates in definitive form and will not be considered Holders
of such Global Note.

 

17

 

 

Any
Global Notes shall represent such of the outstanding Notes as shall be
specified therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be increased or reduced to reflect purchases, exchanges, transfers or exchanges
permitted hereby.  Any endorsement of a
Global Note to reflect the amount of any increase or decrease in the amount of
outstanding Notes represented thereby shall be made by the Trustee or the
custodian for the Global Note, at the direction of the Trustee, in such manner
and upon instructions given by the Holder of such Notes in accordance with this
Indenture.  Payment of principal of, and
interest on any Global Notes shall be made to the Depositary in immediately
available funds.

 

(c)                                  One Officer
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 Trustee authenticates the Note, the
Note shall be valid nevertheless.

 

A
Note shall not be valid until an authorized signatory of the Trustee manually
signs the certificate of authentication on the Note.  The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.

 

The
Trustee shall authenticate and make available for delivery upon a written order
of the Company signed by one Officer (a) Original Notes for original issue
on the date hereof in an aggregate principal amount of $600,000,000 (or
$690,000,000 if the Initial Purchasers exercise their over-allotment option in
full in accordance with the Purchase Agreement), the principal amount of Notes
to be initially issued by the Company and authenticated by the Trustee shall be
set forth in the written order, and (b) subject to the terms of the
Indenture, Additional Notes in an aggregate principal amount to be determined
at the time of issuance and specified therein. 
Such order shall specify the amount of the Notes to be authenticated and
the date on which the original issue of Notes is to be authenticated.  Notwithstanding anything to the contrary in
the Indenture, any issuance of Additional Notes after the Issue Date shall be
in a principal amount of at least $1,000.

 

The
Notes will be resold only to QIBs in reliance on Rule 144A. The Notes may
thereafter be transferred only to QIBs. 
Notes shall be resold pursuant to Rule 144A and shall be issued
initially in the form of Restricted Global Notes, without interest coupons and
with the Global Notes Legend and the applicable Restricted Legend set forth in Exhibit A
hereto, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Notes Custodian and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as provided in this Indenture.

 

The
Trustee may appoint an authenticating agent reasonably acceptable to the
Company to authenticate the Notes.  Any
such appointment shall be evidenced by an instrument signed by a Trust Officer,
a copy of which shall be furnished to the Company.  Unless limited by the terms of such
appointment, 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 any Registrar, Paying Agent or agent for service of notices and
demands.

 

18

 

Section 2.03                                Payment at
Maturity; Payment of Interest.

 

(a)                                  Payment at
Maturity.  The Notes
shall mature on June 1, 2015, unless earlier exchanged or repurchased in
accordance with the provisions hereof. 
On the Maturity Date, each Holder shall be entitled to receive from the
Company or its designee on such date $1,000 in cash for each $1,000 principal
amount of Notes.  With respect to Global
Notes, principal and interest will be paid to the Depositary or its nominee in
immediately available funds.  With
respect to any certificated Notes, principal will be payable at the Company’s
office or agency in New York City.

 

(b)                                 Payment of
Interest.  Interest on
the Notes will accrue at the rate of 3.00% per annum.  Interest will accrue from the most recent
date to which interest has been paid or provided for, or, if no interest has
been paid or provided for, May 7, 2010. 
Interest shall be payable semi-annually in arrears on June 1 and December 1
of each year (each, an “Interest Payment Date”), commencing December 1,
2010, to the Person in whose name any Note is registered at 5:00 p.m., New
York City time, on the relevant Regular Record Date with respect to the
applicable Interest Payment Date.

 

Interest
on the Notes will be computed on the basis of a 360-day year comprised of
twelve 30-day months.

 

Payments
in respect of the Notes represented by a Global Note (including principal and
interest) shall be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company or any successor
depositary.  The Company will make all
payments in respect of a certificated Note (including principal, and interest),
at the office or agency of the Paying Agent, except that, at the option of the
Company, payment of interest may be made by mailing a check to the registered
address of each Holder thereof; provided,
however, that payments on the
Notes may also be made, in the case of a Holder of at least $5,000,000
aggregate principal amount of Notes, by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder
elects payment by wire transfer by giving written notice to the Registrar to
such effect designating such account not later than the relevant Regular Record
Date, which application shall remain in effect until the Holder provides
written notice to the Registrar to the contrary.

 

If
an Interest Payment Date falls on a date that is not a Business Day, such
payment of interest (and principal in the case of the Maturity Date and
Fundamental Change Purchase Price in the case of a Fundamental Change Purchase
Date) will be postponed until the next succeeding Business Day, and no interest
or other amounts will be paid as a result of any such postponement.

 

Section 2.04                                Registrar and
Paying Agent.  (a)  The Company
shall maintain an office or agency where Notes may be presented for
registration of transfer or for exchange (the “Registrar”), an office or agency
where Notes may be presented for payment (the “Paying Agent”) and an office or
agency where the Notes may be surrendered for exchange (the “Exchange Agent”)
(which shall, in each case, be in the Borough of Manhattan, New York
City).  The Registrar shall keep a
register of the Notes (the “Register”) and of their transfer and exchange.  The Company may have one or more
co-registrars and one or more additional paying

 

19

 

agents.  The term “Paying Agent” includes any
additional paying agent, and the term “Registrar” includes any
co-registrars.  The Company initially
appoints U.S. Bank National Association as (i) Registrar, Paying Agent and
Exchange Agent in connection with the Notes and (ii) the Notes Custodian
with respect to the Global Notes.

 

(b)                                 The agreement
shall implement the provisions of this Indenture that relate to such
agent.  The Company shall notify the
Trustee of the name and address of any agent. 
If the Company fails to maintain a Registrar, Paying Agent or Exchange
Agent, the Trustee shall act as such as an agent and shall be entitled to
appropriate compensation therefor pursuant to Section 7.06.  The Company or any of its Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or Exchange Agent.

 

(c)                                  The Company may
remove any Registrar, Paying Agent or Exchange Agent upon written notice to
such Registrar, Paying Agent or Exchange Agent and to the Trustee; provided, however,
that no such removal shall become effective until (i) if applicable,
acceptance of an appointment by a successor as evidenced by an appropriate
agreement entered into by the Company and such successor Registrar, Paying
Agent or Exchange Agent, as the case may be, and delivered to the Trustee or
(ii) notification to the Trustee that the Trustee shall serve in an agency
capacity as Registrar, Paying Agent or Exchange Agent until the appointment of
a successor in accordance with clause (i) above.  The Registrar, Paying Agent or Exchange Agent
may resign at any time upon written notice to the Company and the Trustee;  provided,
however, that the Trustee may
resign as Paying Agent, Registrar or Exchange Agent only if the Trustee also
resigns as Trustee in accordance with Section 7.07.

 

Section 2.05                                Paying Agent to
Hold Money in Trust.  Prior to each due
date of the principal of and interest on any Note, the Company shall deposit
with the Paying Agent (or if the Company or a Wholly Owned Subsidiary of the
Company is acting as Paying Agent, segregate and hold in trust for the benefit
of the Persons entitled thereto) a sum sufficient to pay such principal and
interest when so becoming due.  The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of Holders or
the Trustee all money held by the Paying Agent for the payment of principal of
and interest on the Notes, and shall notify the Trustee of any default by the
Company in making any such payment.  If
the Company or a Wholly Owned Subsidiary of the Company acts as Paying Agent,
it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund.  The Company at any
time may require the Paying Agent to pay all money held by it to the Trustee
and to account for any funds disbursed by the Paying Agent.  Upon complying with this Section 2.05,
the Paying Agent shall have no further liability for the money delivered to the
Trustee.

 

Section 2.06                                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. 
If the bank that is acting as Trustee is not the Registrar, the Company
shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at
least five 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.

 

20

 

Section 2.07                                Exchange and
Registration of Transfer of Notes; Restrictions on Transfer. The Company shall
cause to be kept at the Corporate Trust Office the Register in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Notes and of transfers of Notes. The Register shall be
in written form or in any form capable of being converted into written form
within a reasonably prompt period of time.

 

Upon
surrender for registration of transfer of any Notes to the Registrar or any co-registrar,
and satisfaction of the requirements for such transfer set forth in this Section 2.07,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Notes of
any authorized denominations and of a like aggregate principal amount and
bearing such restrictive legends as may be required by this Indenture.

 

Notes
may be exchanged for other Notes of any authorized denominations and of a like
aggregate principal amount, upon surrender of the Notes to be exchanged at any
such office or agency maintained by the Company.  Whenever any Notes are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Notes that the Holder making the exchange is entitled to receive
bearing registration numbers not contemporaneously outstanding.

 

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

 

All
Notes presented or surrendered for registration of transfer or for exchange,
repurchase or exchange pursuant to Article XI shall (if so required by the
Company or the Registrar) be duly endorsed, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company, and
the Notes shall be duly executed by the Holder thereof or his attorney duly
authorized in writing.

 

No
service charge shall be made to any Holder for any registration of transfer or
exchange of Notes, but the Company or the Trustee may require payment by the
Holder of a sum sufficient to cover any tax, assessment or other governmental
charge required by law or permitted by this Indenture that may be imposed in
connection with any registration of transfer or exchange of Notes in the event
a Holder requests any shares to be issued in a name other than such Holder’s
name.

 

Neither
the Company nor the Trustee nor any Registrar shall be required to exchange,
issue or register a transfer or exchange of (a) any Note or portions
thereof surrendered for exchange pursuant to Article XI or (b) any
Note or portions thereof tendered for repurchase (and not withdrawn) pursuant
to Article III.

 

(b)           The following
provisions shall apply only to Global Notes:

 

(i)            Each
Global Note authenticated under this Indenture shall be registered in the name
of the Depositary or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian for the Global Notes therefor, and each such
Global Note shall constitute a single Note for all purposes of this Indenture.

 

21

 

(ii)           Notwithstanding any
other provision in this Indenture, no Global Note may be exchanged in whole or
in part for Notes registered, and no transfer of a Global Note in whole or in
part may be registered, in the name of any Person other than the Depositary or
a nominee thereof unless (A) the Depositary (x) has notified the
Company that it is unwilling or unable to continue as Depositary for such
Global Note and a successor depositary is not appointed within 90 calendar days
or (y) has ceased to be a clearing agency registered under the Exchange
Act, and a successor Depositary has not been appointed by the Company within 90
calendar days, or (B) an Event of Default in respect of the Notes has
occurred and is continuing; or (C) the Company, at its option, notifies
the Trustee in writing that it no longer wishes to have all the Notes
represented by Global Notes.  Any Global
Note exchanged pursuant to this Section 2.07(b)(ii) shall be so
exchanged in whole and not in part.

 

(iii)          In addition,
certificated Notes will be issued in exchange for beneficial interests in a
Global Note upon request by or on behalf of the Depositary in accordance with
customary procedures following the request of a beneficial owner seeking to
enforce its rights under the Notes or this Indenture, including its rights
following the occurrence of an Event of Default.

 

(iv)          Notes issued in
exchange for a Global Note or any portion thereof pursuant to clause (ii) or
(iii) above shall be issued in definitive, fully registered form, without
interest coupons, shall have an aggregate principal amount equal to that of
such Global Notes or portion thereof to be so exchanged, shall be registered in
such names and be in such authorized denominations as the Depositary shall
designate and shall bear any legends required hereunder.  Any Global Notes to be exchanged shall be
surrendered by the Depositary to the Trustee, as Registrar, provided that pending completion of the
exchange of a Global Note or upon the exchange of a portion of a Global Note,
the Trustee acting as custodian for the Global Note for the Depositary or its
nominee with respect to such Global Note, shall reduce the principal amount
thereof, by an amount equal to the portion thereof to be so exchanged, by means
of an appropriate adjustment made on the records of the Trustee.  Upon any such surrender or adjustment, the
Trustee shall authenticate and make available for delivery the Notes issuable
on such exchange to or upon the written order of the Depositary or an
authorized representative thereof.

 

(v)           In the event of the
occurrence of any of the events specified in clause (ii) above or upon any
request described in clause (iii) above, the Company will promptly make
available to the Trustee a sufficient supply of certificated Notes in
definitive, fully registered form, without interest coupons.

 

(vi)          Neither any members
of, or participants in, the Depositary (the “Agent Members”) nor any other
Persons on whose behalf Agent Members may act shall have any rights under this
Indenture with respect to any Global Notes registered in the name of the
Depositary or any nominee thereof, and the Depositary or such nominee, as the
case may be, may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner and Holder of such Global Notes
for all purposes whatsoever. 
Notwithstanding the foregoing, nothing herein shall prevent the Company,
the Trustee or any agent of the Company or the Trustee from giving effect to
any written

 

22

 

certification,
proxy or other authorization furnished by the Depositary or such nominee, as
the case may be, or impair, as between the Depositary, its Agent Members and
any other Person on whose behalf an Agent Member may act, the operation of
customary practices of such Persons governing the exercise of the rights of a
Holder of any Notes.

 

(vii)         At such time as all
interests in a Global Note have been repurchased pursuant to Article III
or exchanged pursuant to Article XI, cancelled or exchanged for Notes in
certificated form, such Global Note shall, upon receipt thereof, be cancelled
by the Trustee in accordance with standing procedures and instructions existing
between the Depositary and the custodian for the Global Note.  At any time prior to such cancellation, if
any interest in a Global Note is repurchased pursuant to Article III or
exchanged pursuant to Article XI, cancelled or exchanged for Notes in
certificated form, the principal amount of such Global Note shall, in
accordance with the standing procedures and instructions existing between the
Depositary and the custodian for the Global Note, be appropriately reduced.

 

(c)           Every Note (and all
securities issued in exchange therefor or in substitution thereof) is required
under this Section 2.07(c) to bear the Restricted Legend (a “Restricted
Global Note”) and shall be subject to the restrictions on transfer set forth in
this Section 2.07(c) and in the Restricted Legend set forth in Exhibit A,
and the holder of each such Restricted Global Note, by such Holder’s acceptance
thereof, agrees to be bound by all such restrictions on transfer.

 

Every
share of OI Inc. Common Stock (and all securities issued in exchange therefore
or in substitution thereof) issued upon exchange of a Note in accordance with Article XI
is required under this Section 2.07(c) to bear the Restricted Legend
(the “Restricted OI Inc. Common Stock,” and together with the Restricted Global
Note, the “Restricted Securities”) and shall be subject to the restrictions on
transfer set forth in this Section 2.07(c) and in the Restricted
Legend set forth in Exhibit B, which is hereby incorporated in and
expressly made a part of this Indenture, and the holder of each such share of
Restricted OI Inc. Common Stock, by such holder’s acceptance thereof, agrees to
be bound by all such restrictions on transfer. Each Holder which exchanges
Notes for OI Inc. Common Stock will be deemed to have represented to the
Company and OI Inc. that it is a QIB.

 

As
used in this Section 2.07(c), the term “transfer” means any sale, pledge,
loan, transfer or other disposition whatsoever of any Restricted Security or
any interest therein.

 

(d)           Until the date (the “Resale
Restriction Termination Date”) that is the later of (1) the date that is
one year after the last date of issuance of shares of OI Inc. Common Stock upon
exchange and (2) such later date, if any, as may be required by applicable
laws, any certificate evidencing Restricted OI Inc. Common Stock shall bear the
Restricted Legend set forth in Exhibit B, unless such Restricted OI Inc.
Common Stock has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be
effective at the time of such transfer) or sold pursuant to Rule 144 under
the Securities Act or any similar provision then in force, or unless otherwise
agreed by the Company in writing following receipt of legal advice supporting
the permissibility of the waiver of such transfer restrictions, with written
notice thereof to the Trustee.

 

23

 

(e)           In connection with any transfer of
the Notes the Holder must complete and deliver the form of assignment set forth
on the certificate representing the Note, with the appropriate box checked, to
the Trustee (or any successor Trustee, as applicable), including the
certification, that such Holder is a QIB and such Note is being transferred to
a QIB in accordance with Rule 144A.

 

In
connection with any transfer of the OI Inc. Common Stock issued upon exchange,
if any, prior to the Resale Restriction Termination Date, the holder much
complete and deliver the form of assignment set forth in Exhibit B, the
appropriate box checked, to the transfer agent.

 

(f)            Any OI Inc. Common
Stock issued upon exchange of the Notes as to which such restriction on
transfer shall have expired in accordance with their terms may, upon surrender
of certificates representing such shares of OI Inc. Common Stock for exchange
in accordance with the procedures of the transfer agent for the OI Inc. Common
Stock, be exchanged for a new certificate or certificates for a like aggregate
number of shares of OI Inc. Common Stock, which shall not bear the Restricted
Legend.

 

(g)           The Trustee shall have no
responsibility or obligation to any Agent Members or any other Person with
respect to the accuracy of the books or records, or the acts or omissions, of
the Depositary or its nominee or of any participant or member thereof, with
respect to any ownership interest in the Notes or with respect to the delivery
to any Agent Member or other Person (other than the Depositary) of any notice
or the payment of any amount, under or with respect to such Notes.  All notices and communications to be given to
the holders of Notes and all payments to be made to holders of Notes under the
Notes shall be given or made only to or upon the order of the registered
holders of Notes (which shall be the Depositary or its nominee in the case of a
Global Note).  The rights of beneficial
owners in any Global Notes shall be exercised only through the Depositary
subject to the customary procedures of the Depositary.  The Trustee may rely and shall be fully
protected in relying upon information furnished by the Depositary with respect
to its Agent Members.

 

(h)           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 Notes (including any transfers between
or among Agent Members) 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.

 

Section 2.08           Replacement
Notes.  If a mutilated Note is
surrendered to the Registrar 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 requirements of
Section 8-405 of the Uniform Commercial Code are met, such that the Holder
(a) notifies the Company or the Trustee within a reasonable time after
such Holder has notice of such loss, destruction or wrongful taking and the
Registrar does not register a transfer prior to receiving such notification,
(b) makes such request to the Company or the Trustee prior to the Note
being acquired by a protected purchaser as defined in Section 8-303 of the
Uniform

 

24

 

Commercial
Code (a “protected purchaser”) and (c) satisfies any other reasonable
requirements of the Company or the Trustee. 
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, the Paying Agent and the Registrar from any
loss that any of them may suffer if a Note is replaced.  The Company and the Trustee may charge the
Holder for their expenses in replacing a Note. 
In the event any such mutilated, lost, destroyed or wrongfully taken
Note has become or is about to become due and payable, the Company in its discretion
may pay such Note instead of issuing a new Note in replacement thereof.

 

Every
replacement Note is an additional obligation of the Company and the Guarantors.

 

The
provisions of this Section 2.08 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, lost, destroyed or wrongfully taken Notes.

 

Section 2.09           Outstanding
Notes.  Notes outstanding at any time are
all Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section 2.09
as not outstanding.  Subject to
Section 12.05, 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 2.08, it ceases to be outstanding
unless the Trustee and the Company receive proof satisfactory to them that the
replaced Note is held by a protected purchaser.

 

If
the Paying Agent segregates and holds in trust, in accordance with this
Indenture, on the maturity date money sufficient to pay all principal and
interest payable on that date with respect to the Notes (or portions thereof)
to be repurchased or maturing, as the case may be, and the Paying Agent is not
prohibited from paying such money to the Holders on that date pursuant to the
terms of this Indenture, then on and after that date, such Notes (or portions
thereof) cease to be outstanding and interest on them ceases to accrue.

 

Section 2.10           Temporary
Notes.  In the event that certificated
Notes are to be issued under the terms of this Indenture, until such
certificated Notes are ready for delivery, the Company may prepare and the
Trustee shall authenticate temporary Notes. 
Temporary Notes shall be substantially in the form of certificated 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 certificated Notes and
deliver them in exchange for temporary Notes upon surrender of such temporary
Notes at the office or agency of the Company, without charge to the Holder.

 

Section 2.11           Cancellation.  The Company at any time may deliver Notes to
the Trustee for cancellation. The Company shall forward to the Trustee for
cancellation any Notes purchased by it. 
The Registrar, the Paying Agent and the Exchange Agent shall forward to
the Trustee any Notes surrendered to them for registration of transfer,
exchange or payment.  The Trustee and no
one else shall cancel all Notes surrendered for registration of transfer,
exchange,

 

25

 

payment
or cancellation and shall dispose of canceled Notes in accordance with its
customary procedures or deliver canceled Notes to the Company pursuant to
written direction by an Officer.  The
Company may not issue new Notes to replace Notes it has repurchased, paid or
delivered to the Trustee for cancellation. 
The Trustee shall not authenticate Notes in place of canceled Notes
other than pursuant to the terms of this Indenture.

 

Section 2.12           Defaulted
Interest.  If the Company defaults in a
payment of interest on the Notes and such default continues for a period of 30
calendar days, the interest which is payable shall forthwith cease to be
payable to the Holder on the Regular Record Date and the Company shall pay the
defaulted interest (plus interest on such defaulted interest to the extent
lawful) to the Persons who are Holders on a subsequent special record
date.  The Company shall fix or cause to
be fixed any such special record date and payment date to the reasonable
satisfaction of the Trustee and shall promptly mail or cause to be mailed to
each Holder a notice that states the special record date, the payment date and
the amount of defaulted interest to be paid.

 

Section 2.13           CUSIP
Numbers and ISINs.  The Company in
issuing the Notes may use CUSIP numbers and ISINs (if then generally in use)
and, if so, the Trustee shall use CUSIP numbers and ISINs in notices of
repurchase as a convenience to Holders; provided,
however, that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a repurchase
and that reliance may be placed only on the other identification numbers
printed on the Notes, and any such repurchase shall not be affected by any
defect in or omission of such numbers. 
The Company shall advise the Trustee of any change in the CUSIP numbers
or ISINs.

 

Section 2.14           Automatic
Exchange from Restricted OI Inc. Common Stock to Unrestricted OI Inc. Common
Stock.

 

To
the extent there are any shares of Restricted OI Inc. Common Stock outstanding
on the Resale Restriction Termination Date, Restricted OI Inc. Common Stock,
shall be automatically exchanged on the Resale Restriction Termination Date
into an unrestricted stock certificate representing OI Inc. Common Stock that
is no longer subject to the restrictions set out in Section 2.07(c) (including
removal of the Restricted Legend) (the “Unrestricted OI Inc. Common Stock”),
without any action required by or on behalf of the holder (the “Automatic
Exchange”). In order to effect such exchange, the Company shall at least 15
days but not more than 30 days prior to the Resale Restriction Termination
Date, deliver a notice of Automatic Exchange (an “Automatic Exchange Notice”)
to each holder at such holder’s address appearing in the register maintained at
the registrar for OI Inc. Common Stock with a copy to the transfer agent for OI
Inc. Common Stock.  The Automatic Exchange
Notice shall identify the OI Inc. Common Stock subject to the Automatic
Exchange and shall state: (1) the date of the Automatic Exchange; (2) the
section of this Indenture pursuant to which the Automatic Exchange shall occur;
(3) the “CUSIP” number the Restricted OI Inc. Common Stock from which such
holders’ beneficial interests shall be transferred and (4) the “CUSIP”
number of the Unrestricted OI Inc. Common Stock 
into which such holders’ beneficial interests shall be transferred.

 

26

 

 

Article III

 

Purchases Upon a Fundamental Change

 

Section 3.01           Purchase at
Option of Holder Upon a Fundamental Change.

 

(a)           Repurchase
Option.  If a Fundamental Change occurs
at any time, a Holder will have the right, at its option, to require the
Company to purchase for cash any or all of its Notes, or any portion of the
principal amount thereof, that is equal to $1,000 or an integral multiple of
$1,000.  The price the Company is
required to pay is equal to 100% of the principal amount of the Notes to be purchased
plus accrued and unpaid interest to, but excluding, the Fundamental Change
Purchase Date (the “Fundamental Change Purchase Price”); provided, however,
that if the Fundamental Change Purchase Date is after a Regular Record Date and
on or prior to the Interest Payment Date to which such Regular Record Date
relates, the Company will instead pay the full amount of accrued and unpaid
interest to the Holder of record on such Regular Record Date and the
Fundamental Change Purchase Price shall not include such accrued and unpaid
interest.  The Fundamental Change
Purchase Date will be the date specified by the Company that is not less than
20 or more than 35 Business Days following the date of the Company’s
Fundamental Change Notice.  Any Notes
purchased by the Company will be paid for in cash.

 

No
Notes may be purchased at the option of Holders upon a Fundamental Change if
the principal amount of the Notes has been accelerated, and such acceleration
has not been rescinded, on or prior to such date.

 

(b)           Notice
of Fundamental Change.  On or
before the 20th calendar day after the occurrence of a Fundamental Change, the
Company will provide to all Holders, the Trustee and Paying Agent a notice (the
“Fundamental Change Notice”) of the occurrence of the Fundamental Change and of
the resulting purchase right.  Such
notice shall state, among other things:

 

(i)            the events causing a Fundamental Change;

 

(ii)           the effective
date of the Fundamental Change, and whether the Fundamental Change is a
Make-Whole Fundamental Change, in which case the Effective Date of the
Make-Whole Fundamental Change;

 

(iii)          the last date
on which a Holder may exercise the purchase right;

 

(iv)          the Fundamental
Change Purchase Price;

 

(v)           the Fundamental
Change Purchase Date;

 

(vi)          the name and address
of the Paying Agent and the Exchange Agent;

 

(vii)         the applicable
Exchange Rate and any adjustments to the applicable Exchange Rate;

 

27

 

(viii)        that the Notes
with respect to which a Fundamental Change Purchase Notice has been delivered
by a Holder may be exchanged only if the Holder withdraws the Fundamental
Change Purchase Notice in accordance with the terms of this Indenture or to the
extent that portions of such Notes are not subject to such Fundamental Change
Purchase Notice; and

 

(ix)           the procedures
that Holders must follow to require the Company to purchase their Notes.

 

The
Company shall purchase Notes that have been validly surrendered for Purchase
and not withdrawn on the Fundamental Change Purchase Date.

 

Simultaneously
with providing the Fundamental Change Notice, the Company will issue a press
release (and make the press release available on its website).

 

No
failure of the Company to give the foregoing notices and no defect therein shall
limit the purchase rights of the Holders of Notes or affect the validity of the
proceedings for the purchase of the Notes pursuant to this Section 3.01.

 

(c)           Exercise
of Purchase Option.  To exercise
the Fundamental Change repurchase option, a Holder must deliver, prior to 5:00 p.m.,
New York City time, on the Business Day immediately preceding the Fundamental
Change Purchase Date, the Notes to be purchased, duly endorsed for transfer, if
certificated, together with a written purchase notice, if certificated, in the
form entitled “Form of Fundamental Change Purchase Notice” on the reverse
side of the Notes duly completed (the “Fundamental Change Purchase Notice”), to
the Paying Agent.  The Fundamental Change
Purchase Notice must state:

 

(i)            if certificated Notes have been issued, the
certificate numbers of the Holder’s Notes to be delivered for purchase;

 

(ii)           the portion of
the principal amount of Notes to be purchased, which must be $1,000 or an
integral multiple thereof; and

 

(iii)          that the Notes
are to be purchased by the Company pursuant to the applicable provisions of the
Notes and this Indenture.

 

If the Notes are not in
certificated form, the Fundamental Change Purchase Notice delivered by any
Holder must comply with the appropriate Depositary procedures.

 

(d)           Withdrawal
of Purchase Notice.  Holders may
withdraw any Fundamental Change Purchase Notice (in whole or in part) by a
written notice of withdrawal delivered to the Paying Agent prior to 5:00 p.m.,
New York City time, on the Business Day immediately preceding the Fundamental
Change Purchase Date.  The notice of
withdrawal shall state:

 

(i)            the principal amount of the withdrawn Notes;

 

(ii)           if certificated
Notes have been issued, the certificate numbers of the withdrawn Notes; and

 

28

 

(iii)          the principal
amount, if any, which remains subject to the Fundamental Change Purchase
Notice.

 

If
the Notes are not in certificated form, the Withdrawal Notice delivered by any
Holder must comply with the appropriate Depositary procedures.

 

The
Paying Agent will promptly return to the respective Holders thereof any
certificated Notes with respect to which a Fundamental Change Purchase Notice
has been withdrawn in compliance with the provisions of this Section 3.01(d).

 

(e)           Effect
of Fundamental Change Purchase Notice.  Upon receipt by the Paying Agent of the
Fundamental Change Purchase Notice specified in Section 3.01(c), the
Holder of the Note in respect of which such Fundamental Change Purchase Notice
was given shall (unless such Fundamental Change Purchase Notice is withdrawn in
accordance with Section 3.01(d)) thereafter be entitled to receive solely
the Fundamental Change Purchase Price in cash with respect to such Note.  The Paying Agent shall pay the Fundamental
Change Purchase Price to such Holder, subject to receipt of funds by the
Company, promptly following the later of (i) the Fundamental Change
Purchase Date with respect to such Note (provided,  the conditions in Section 3.01(c) have
been satisfied) and (ii) the time of delivery or book-entry transfer of
such Note to the Paying Agent by the Holder thereof in the manner required by
Section 3.01(c).

 

(f)            Deposit of
Fundamental Change Purchase Price.  Prior to 10:00 a.m., New York City time,
on the Fundamental Change Purchase Date, the Company shall deposit with the
Paying Agent (or, if the Company or a Wholly Owned Subsidiary of the Company is
acting as the Paying Agent, shall segregate and hold in trust as provided
herein) an amount of money (in immediately available funds if deposited on such
Business Day) sufficient to pay the Fundamental Change Purchase Price of all
the Notes or portions thereof that are to be purchased as of the Fundamental
Change Purchase Date. If the Paying Agent holds (or, if the Company or a Wholly
Owned Subsidiary of the Company is acting as the Paying Agent, has segregated
and holds in trust) cash or securities sufficient to pay the Fundamental Change
Purchase Price of the Notes for which a Fundamental Change Purchase Notice has
been tendered and not withdrawn in accordance with this Indenture on the
Fundamental Change Purchase Date, then as of such Fundamental Change Purchase
Date, (i) such Notes will cease to be outstanding and interest will cease
to accrue thereon (whether or not book-entry transfer of such Notes is made or
such Notes have been delivered to the Paying Agent) and (ii) all other
rights of the Holders in respect thereof will terminate (other than the right
to receive the Fundamental Change Purchase Price and previously accrued and
unpaid interest upon delivery or book-entry transfer of such Notes in the event
that the Fundamental Change Purchase Date is after a Regular Record Date and on
or prior to the Interest Payment Date to which it relates).

 

(g)           Notes
Purchased in Whole or in Part.  Any Note that is to be purchased, whether in
whole or in part, shall be surrendered at the office of the Paying Agent (with,
if the Company or the Trustee so requires in the case of certificated Notes,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or such Holder’s
attorney duly authorized in writing) and the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Note, without 

 

29

 

service charge, a new Note
or Notes, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to, and in exchange for, the portion of the
principal amount of the Note so surrendered that is not purchased.

 

(h)           Covenant
to Comply With Applicable Laws Upon Purchase of Notes.  In connection with any offer to purchase
Notes under this Section 3.01, the Company shall, in each case if
required, (i) comply with Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act that may then be applicable, (ii) file
a Schedule TO or any successor or similar schedule if required under the
Exchange Act and (iii) otherwise comply with all federal and state
securities laws in connection with any offer by us to purchase the Notes so as
to permit the rights and obligations under this Section 3.01 to be
exercised in the time and in the manner specified in this Section 3.01.

 

(i)            Repayment
to the Company.  To the
extent that the aggregate amount of cash deposited by the Company pursuant to Section 3.01(f) exceeds
the aggregate Fundamental Change Purchase Price of the Notes or portions
thereof that the Company is obligated to purchase as of the Fundamental Change
Purchase Date, then, following the Fundamental Change Purchase Date, the Paying
Agent shall promptly return any such excess to the Company.

 

(j)            The Company shall not be
required to make an offer to purchase the Notes upon a Fundamental Change if a
third party makes such offer to purchase the Notes upon a  Fundamental Change in the manner, at the
times and otherwise in compliance with the requirements set forth in this Article III
and purchases all Notes validly and not withdrawn under such offer to purchase
the Notes.

 

Article IV

 

Covenants

 

Section 4.01           Payment of
Notes.

 

The
Company shall promptly pay the principal of and interest on the Notes on the
dates and in the manner provided in the Notes and in this Indenture.  Principal and interest shall be considered
paid on the date due if on such date the Trustee or the Paying Agent holds in
accordance with this Indenture money in immediately available funds sufficient
to pay all principal and interest then due and the Trustee or the Paying Agent,
as the case may be, is not prohibited from paying such money to the Holders on
that date pursuant to the terms of this Indenture.

 

The
Company shall pay interest on overdue principal at the rate borne by the Notes,
and it shall pay interest on overdue installments of interest at the same rate
to the extent lawful.

 

Section 4.02           Commission
Reports.

 

Any
documents or reports that (i) OI Group is required to file with the SEC or
furnish to the holders of notes governed by any Senior Note Indenture pursuant
to any Senior Note Indenture, or (ii) OI Inc. is required to file with the
SEC pursuant to Section 13 or 15(d) of 

 

30

 

the
Exchange Act, shall be furnished by OI Group or OI Inc., as applicable, to the
trustee and Holders, at their request, within 15 calendar days after the same
are required (pursuant to the Senior Note Indentures or the Exchange Act, as
the case may be) to be filed with the SEC (in each case, giving effect to any
grace period provided by Rule 12b-25 under the Exchange Act).  Documents filed by OI Group or OI Inc., as
applicable, with the SEC via the EDGAR system will be deemed furnished to the
trustee and the Holders as of the time such documents are filed via EDGAR.

 

If
at any time OI Group or OI Inc. is not subject to the reporting requirements of
the Exchange Act, OI Group or OI Inc., as applicable, shall promptly furnish to
the Holders, beneficial owners and prospective purchasers of the Notes, upon
their request, the information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act to facilitate the resale of those Notes pursuant to Rule 144A
for so long as the Notes are outstanding.

 

(a)           The subsequent
filing with the Trustee and, if applicable, the SEC of any report required by Section 4.02(a) shall
be deemed to automatically cure any Default or Event of Default resulting from
the failure to file such report within the time period required by Section 4.02(a).

 

(b)           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 compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively (subject to Article VII)
on Officers’ Certificates).

 

Section 4.03           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 Default and whether or not the
signers know of any Default that occurred during such period.  If they do, the certificate shall describe
the Default, its status and what action the Company is taking or proposes to
take with respect thereto.

 

Section 4.04           Notice of
Defaults.

 

The
Company shall deliver to the Trustee, forthwith upon becoming aware of any
Default or Event of Default, a statement specifying such Default or Event of
Default (the “Notice of Default”).  The
Trustee may withhold from Holders, notices of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest, including a default arising from the Company’s failure
to purchase any Notes when required upon a Fundamental Change, or the failure
to deliver, upon exchange, cash and shares of OI Inc. Common Stock, if any), if
it determines that withholding notice in their interest.

 

31

 

Section 4.05           Registration
Default Additional Interest.

 

(a)           If a
Registration Default or Effective Default occurs under the Registration Rights
Agreement, the Company shall pay, as agreed in the Registration Rights
Agreement, Registration Default Additional Interest (in additional to any
Reporting Default Additional Interest), if any, on the Notes which shall accrue
until such Registration Default or Effective Default, as applicable, is no
longer continuing, at a rate equal to 0.25% per annum of the principal amount
of Notes outstanding for the first 90 days after such Registration Default or
Effective Default, as applicable, has occurred and is continuing, which rate
shall be increased by an additional 0.25% per annum following the 90th day
after such Registration Default  or
Effective Default, as the case may be, is continuing, provided that the rate at
which such Registration Default Additional Interest under this Section 4.05(a) accrues
may in no event exceed 0.50% per annum. For the avoidance of doubt, no
Registration Default Additional Interest shall accrue following the expiration
of the time period during which OI Inc. is required to use commercially
reasonable efforts to keep a registration statement effective under the
Registration Rights Agreement.

 

(b)           Registration Default
Additional Interest payable in accordance with Section 4.05(a) shall
be payable in arrears on each Interest Payment Date following accrual in the
same manner and to the same persons as regular interest on the Notes.

 

(c)           If a Holder exchanges all or
a portion of its Notes when there exists a Registration Default or Effective
Default with respect to the OI Inc. Common Stock and any shares of OI Inc.
Common Stock are due upon such exchange, the Holder will not be entitled to
receive Registration Default Additional Interest, but the Exchange Rate will be
increased by 3.00%.  If a Registration Default
with respect to the OI Inc. Common Stock occurs after a Holder has exchanged
its Notes and received OI Inc. Common Stock, such Holder will not be entitled
to any compensation with respect to such OI Inc. Common Stock.

 

Article V

 

Successor Company or Successor Guarantor

 

Section 5.01           When the
Company, OI Group or OI Inc. May Merge or Transfer Assets.None of the
Company, OI Inc. or OI Group shall, 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,
unless:

 

(i)            either (a) the Company, OI Group or OI Inc., as
applicable, is the resulting, surviving or transferee Person; or (b) if
the Company, OI Group, or OI Inc., as applicable, is not the resulting,
surviving or transferee Person, the resulting, surviving or transferee Person
(the “Successor Company”) is a corporation organized and existing under the
laws of the United States, any state thereof or the District of Columbia and
such corporation assumes all the obligations of the Company, OI Group or OI
Inc., as applicable, under the Notes and the Indenture pursuant to a
supplemental indenture and under the Registration Rights Agreement pursuant to
a supplemental agreement;

 

32

 

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

 

(iii)          the Company
shall have delivered or caused to be delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that such transactions
described above and such supplemental indenture (if any) comply with this
Indenture.

 

If
the Company, OI Group or OI Inc., as applicable, is not the resulting or
surviving Person, upon any such consolidation, merger or sale, assignment,
conveyance, or transfer (other than in the case of a lease), the Successor
Company shall succeed to, and may exercise every right and power of the
Company, OI Group or OI Inc., as applicable, under this Indenture.

 

(b)           No Guarantor
shall sell or otherwise dispose of all or substantially all 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:

 

(i)            (a) either (1) such Guarantor is the
resulting or surviving Person; or (2) if such Guarantor is not the
resulting or surviving person, the resulting, surviving or transferee person (“Successor
Guarantor”) is a corporation or limited liability company organized and
existing under the laws of the United States, any state thereof or the District
of Columbia and such corporation or limited liability company assumes all the
obligations of such Guarantor under the Notes, the Guarantee and this Indenture
pursuant to a supplemental indenture; (b) immediately after giving effect
to such transaction, no Default or Event of Default has occurred and is continuing;
and (c) the Company shall have delivered or caused to be delivered to the
Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that
such transactions described above and such supplemental indenture (if any)
comply with this Indenture; or

 

(ii)           the transaction
is made in compliance with the Credit Agreement and the Senior Note Indentures.

 

If
such Guarantor is not the resulting or surviving Person, upon any such
consolidation, merger or sale, assignment, conveyance, or transfer, the
Successor Guarantor shall succeed to, and may exercise every right and power
of, such Guarantor under this Indenture, and the Guarantee of such Guarantor
shall be automatically released under this Indenture.

 

(c)           This Article V
shall not apply to a merger or consolidation of the Company, OI Group, 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.

 

Section 5.02           Assignment of
ObligationsOn and after May 7, 2011, the Company may assign its
obligations under the Notes and this Indenture to OI Inc., and the Company and
each Guarantor, in its capacity as a Guarantor, would thereafter be released
from its obligations under the Notes, the Guarantees of the Notes and this
Indenture, provided that (a) OI
Inc. assumes all of the obligations under the Notes and this Indenture and (b) the
obligations of each 

 

33

 

domestic
borrower under the Credit Agreement have been or will be concurrently assumed
by OI Inc.

 

In
the event of any such assignment, OI Inc. shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under the Indenture
with the same effect as if OI Inc. had been named the Company herein, and
restrictions imposed on and obligations of OI Group in this Indenture shall
become restrictions imposed on and obligations of OI Inc., unless the context
otherwise requires.

 

Article VI

 

Defaults and Remedies

 

Section 6.01           Events of
DefaultAn “Event of Default” occurs if:

 

(a)           the Company
defaults for 30 days in the payment when due of interest on the Notes;

 

(b)           the Company defaults in payment
of principal of the Notes when due at Stated Maturity, upon required purchase
upon a Fundamental Change, by acceleration or otherwise;

 

(c)           the Company fails to pay the
cash portion of the Exchange Consideration or OI Inc. fails to deliver the
portion of the Exchange Consideration that consists of shares of OI Inc. Common
Stock (or cash in lieu of fractional shares thereof), if any, in accordance
with this Indenture upon exercise of a Holder’s exchange right within five days
after the due date thereof;

 

(d)           the Company fails to give a
Fundamental Change Notice pursuant to Section 3.01(b), a notice of a
Make-Whole Fundamental Change pursuant to Section 11.03(g) or notice
of a specified corporate transaction as under Sections 11.01(c) or (d), in
each case when due;

 

(e)            the Company fails to comply
with the provisions described under Article III;

 

(f)            the Company, OI Inc., OI
Group or any of the other Guarantors fails to comply with the provisions
described under Article V;

 

(g)           the Company, OI Inc., OI Group
or any of the other Guarantors fails for 60 days after notice to comply with
any of the agreements in this Indenture (other than an agreement or Default in
whose performance or whose breach is specifically dealt with in another
clause), the Notes and the Guarantees of the Notes (with respect to any
Guarantor);

 

(h)           the Company defaults 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 of its Restricted Subsidiaries (or the payment of which is 

 

34

 

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:

 

(i)         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

 

(ii)       results in the acceleration
of such Indebtedness prior to its express maturity; provided, that an Event of
Default will 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;

 

(i)            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;

 

(j)            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;

 

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

 

(i)        commences a voluntary case;

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

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

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

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

 

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

 

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

 

(ii)       appoints a Custodian of the
Company, OI Inc., OI Group or any Significant Subsidiary of OI Group or for all
or substantially all of 

 

35

 

such
entity’s property; or orders the liquidation of the Company, OI Inc., OI Group
or any Significant Subsidiary of OI Group;

 

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

 

The
foregoing shall constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.

 

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

 

Section 6.02           Acceleration.If
an Event of Default (other than an Event of Default specified in Section 6.01(k) or
(l) with respect to the Company, OI Group, OI Inc. or a Significant
Subsidiary of OI Group) 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, and the
Trustee at the request of such Holders shall, declare 100% of the principal of
and accrued but unpaid interest on all the Notes to be due and payable, provided, however,
that the Trustee shall be held harmless with respect to any such declaration at
the request of such Holders.  Upon such a
declaration, such principal and interest shall be due and payable
immediately.  If an Event of Default
specified in Section 6.01(k) or (l) with respect to the Company,
OI Group, OI Inc. or a Significant Subsidiary of OI Group occurs, 100% of the
principal of and interest on all the Notes shall ipso facto become and be
immediately due and payable without any declaration, other act or notice on the
part of the Trustee or any Holders.

 

Section 6.03           Other
Remedies.If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of 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.  No remedy is
exclusive of any other remedy.  All
available remedies are cumulative.

 

Section 6.04           Waiver of Past
Defaults.The Holders of a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may, on behalf of all Holders of all
of the Notes (1) waive any existing Default or Event of Default and its
consequences under the Indenture except (a) a continuing Default or Event
of Default in the payment of the principal of or interest, including a Default
arising from a failure to purchase any Notes when required upon a Fundamental
Change, on a Note or (b) a Default with respect to the Company’s failure
to deliver upon exchange the cash portion of the Exchange Consideration or OI
Inc.’s failure to deliver upon exchange the portion of the Exchange
Consideration that consists of shares of OI Inc. Common Stock, if any, and (2) rescind
any such acceleration with 

 

36

 

respect
to the Notes and its consequences, including any related payment default that
resulted from such acceleration, if:

 

(a)           rescission would not conflict with any judgment or
decree of a court of competent jurisdiction; and

 

(b)           all existing
Events of Default, other than the nonpayment of the principal or/and interest
on the Notes that have become due solely by such declaration of acceleration
have been cured and waived.

 

When
a Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.

 

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 of exercising any trust or power
conferred on the Trustee.  However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Section 7.01, that the Trustee determines is
unduly prejudicial to the rights of any other Holder or that would involve the
Trustee in personal liability; provided,
however, that the Trustee may
take any other action deemed proper by the Trustee that is not inconsistent
with such direction.  Prior to taking any
action under this Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses
caused by taking or not taking such action.

 

Section 6.06           Limitation on
Suits. (a) Except to enforce the right to receive payment of principal or
interest when due, or the right to receive payment or delivery of the
consideration due upon exchange, no Holder may pursue any remedy with respect
to this Indenture or the Notes or any Guarantee unless:

 

(i)            the Holder has previously given to the Trustee
written notice stating that an Event of Default is continuing;

 

(ii)           the Holders of
at least 25% in principal amount of the Notes have made a written request to
the Trustee to pursue the remedy;

 

(iii)          such Holder or
Holders have offered to the Trustee indemnity satisfactory to it against any
loss, liability or expense;

 

(iv)          the Trustee has
not complied with the request within 60 days after receipt of the request and
the offer of security or indemnity; and

 

(v)           the Holders of
a majority in principal amount of the Notes have not given the Trustee a
direction that, in the opinion of the Trustee, is inconsistent with the request
during such 60-day period.

 

(b)           A Holder may
not use this Indenture to prejudice the rights of another Holder or to obtain a
preference or priority over another Holder.

 

37

 

 

Section 6.07           Rights of
Holders to Receive Payment.  (a) Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Notes held by such Holder on or
after the respective due dates expressed or provided for in the Notes, 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 such
Holder.  In addition, notwithstanding any
other provision of this Indenture, the right of any Holder to enforce its
rights of exchange in accordance with the provisions of Article XI, on or
after the applicable date for settlement of the Exchange Obligation of the
Company and OI Inc., shall not be impaired or affected without the consent of
such Holder.

 

(b) 
Notwithstanding any other provision of this Indenture, OI Inc.’s only
obligation in connection with a Holder’s exercise of its exchange rights under
this Indenture is to deliver the portion of the Exchange Consideration that
consists of shares of OI Inc. Common Stock. 
As a result, in the case of any failure to deliver the Exchange
Consideration to an exchanging Holder upon such Holder’s exercise of its
exchange rights under this Indenture, such Holder’s only claim with respect to
OI Inc. would be for the portion of the Exchange Consideration that consists of
shares of OI Inc. Common Stock (or cash in lieu of a fractional share of OI
Inc. Common Stock), and such Holder’s only claim with respect to the Company
would be for the portion of the Exchange Consideration that consists of cash
(other than any portion that corresponds to a fractional share of OI Inc.
Common Stock).

 

Section 6.08           Collection Suit
by Trustee.  If an Event of Default
specified in Section 6.01(a) or (b) occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an express
trust against the Company or any other obligor on the Notes for the whole
amount then due and owing (together with interest on overdue principal and (to
the extent lawful) on any unpaid interest at the rate provided for in the
Notes) and the amounts provided for in Section 7.06.

 

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 the Guarantor, their
creditors or their property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
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 it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.06.

 

Section 6.10           Priorities.  If the Trustee collects any money or property
pursuant to this Article VI, it shall pay out the money or property in the
following order:

 

FIRST:  to the Trustee for
amounts due under Section 7.06;

 

38

 

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.

 

The
Trustee may fix a record date and payment date for any payment to Holders
pursuant to this Section 6.10.  At
least 15 days before such record date, the Trustee shall mail to each
Holder and the Company a notice that states the record date, the payment date
and amount to be paid.

 

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 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 and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. 
This Section 6.11 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 Notes.

 

Section 6.12           Waiver of Stay
or Extension Laws. Neither the Company nor the Guarantor (to the extent it may
lawfully do so) shall at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company and the
Guarantor (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been
enacted.

 

Section 6.13           Failure to
Comply with Reporting Covenant. 
Notwithstanding anything to the contrary in this Indenture, to the
extent that the Company elects, the sole remedy for an Event of Default
relating to OI Group or OI Inc.’s failure to perform or observe the covenant in
Section 4.02(a) will, for the 365 days after the occurrence of such
an Event of Default (which will be the 60th day after the written notice is
provided to the Company in accordance with Section 6.01(g)), consist
exclusively of the right to receive additional interest (the “Reporting Default
Additional Interest”) on the Notes at a rate equal to 0.25% per annum of the
outstanding principal amount of the Notes outstanding for each day during the
180-day period beginning on, and including, the occurrence of such an Event of
Default during which such Event of Default is continuing in such 365 day
period, and which such Reporting Default Additional Interest will be increased to
0.50% per annum of the then outstanding aggregate principal amount of the
Notes, for the remaining 185 days after such Event of Default is continuing for
such 365 day period, provided that the rate at which such Reporting Default
Additional Interest accrues may in no event exceed 0.50% per annum.  If the Company so elects, such Reporting
Default Additional Interest (in addition to any Registration Default Additional
Interest) will be payable in arrears in the same manner and on the same
Interest Payment Dates as the stated interest payable on the Notes.  On the 366th day after the occurrence of such
Event of Default (if the Event of Default is not cured or waived prior to such
366th day), such 

 

39

 

Reporting
Default Additional Interest will cease to accrue and the Notes will be subject
to acceleration as provided in Section 6.02.  The provisions of this Section 6.13 will
not affect the rights of Holders in the event of the occurrence of any other
Event of Default.

 

In
the event the Company does not elect to pay the Reporting Default Additional
Interest following an Event of Default in accordance with this
Section 6.13, the Notes will be subject to acceleration as provided in Section 6.02.  For the avoidance of doubt, in the event
Registration Default Additional Interest is also triggered pursuant to Section 4.05,
the interest rate applicable to the Notes under such Section 4.05 shall
also apply to the Notes.  In order to
elect to pay the Reporting Default Additional Interest as the sole remedy
during the first 365 days after the occurrence of an Event of Default relating
to OI Group’s or OI Inc.’s obligations pursuant to Section 4.02(a), the
Company must notify the Holders and the Trustee and Paying Agent of such
election, and make the notice available on the Company’s website, on or before
5:00 p.m., New York City time, on the fifth Business Day after the date on
which such Event of Default otherwise would occur.  Upon the Company’s failure to timely give
such notice, the Notes will be immediately subject to acceleration as provided
in Section 6.02.

 

Article VII

 

Trustee

 

Section 7.01           Duties of
Trustee.  (a)  If an Event of
Default has occurred and is continuing, the Trustee shall exercise 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 person would exercise or use under the
circumstances in the conduct of such person’s own affairs.

 

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

 

(i)            the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture 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,
in the case of certificates or opinions required by any provision hereof to be
provided to it, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this Indenture
(but need not confirm or investigate the accuracy of mathematical calculations
or other facts stated therein).

 

(c)           The Trustee may
not be relieved from liability for its own grossly negligent action, its own
grossly 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;

 

40

 

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

 

(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; and

 

(iv)          no provision of
this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers.

 

(d)           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)           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.

 

(f)            Money held in trust by the
Trustee need not be segregated from other funds except to the extent required
by law.

 

(g)           Every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section 7.01.

 

Section 7.02           Rights of
Trustee.  (a)  The Trustee may
conclusively rely on any document believed by it to be genuine and to have been
signed or presented by the proper person. 
The Trustee need not investigate any fact or matter stated in the
document.

 

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

 

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

 

(d)           The Trustee shall not be liable
for any action it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers.

 

(e)           The Trustee may consult with
counsel of its own selection and the advice or opinion of counsel with respect
to legal matters relating to this Indenture and the Notes shall be full and
complete authorization and protection from liability in respect of any action
taken, omitted or suffered by it hereunder in good faith and in accordance with
the advice or opinion of such counsel.

 

(f)            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, consent, order, approval, bond, debenture, note or other paper or
document unless 

 

41

 

requested in writing to do
so by the Holders of not less than a majority in principal amount of the Notes
at the time outstanding and indemnified in connection therewith, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney,
at the expense of the Company and shall incur no liability of any kind by
reason of such inquiry or investigation.

 

(g)           The Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders pursuant to this
Indenture, unless such Holders shall have offered to the Trustee indemnity
satisfactory to the Trustee against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.

 

(h)           The rights, privileges,
protections, immunities and benefits given to the Trustee, including its right
to be indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and each agent, custodian and other Person
employed to act hereunder.

 

(i)            The recitals contained
herein are made by the Company and not by the Trustee and neither the Trustee
nor the Exchange Agent or Paying Agent assumes any responsibility for the
correctness thereof.  The Trustee makes
no representation as to the validity or sufficiency of this Indenture or the OI
Inc. Common Stock, the Daily VWAP, the Guarantee, the Notes, any Stock Price,
any Trading Price, or any calculations performed by the Company.

 

(j)            In no event shall the
Trustee, the Exchange Agent or the Paying Agent be responsible or liable for
any failure or delay in the performance of its obligations hereunder arising
out of or caused by, directly or indirectly, forces beyond its control,
including, without limitation, strikes, work stoppages, accidents, acts of war
or terrorism, civil or military disturbances, nuclear or natural catastrophes
or acts of God, and interruptions, loss or malfunctions of utilities, communications
or computer (software and hardware) services; it being understood that the
Trustee, the Exchange Agent or the Paying Agent shall use reasonable efforts
which are consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.

 

(k)           In no event shall the
Trustee be responsible or liable for special, indirect, or consequential loss
or damage of any kind whatsoever (including, but not limited to, loss of
profit) irrespective of whether the Trustee has been advised of the likelihood
of such loss or damage and regardless of the form of action.

 

(l)            Any request or direction of
the Company mentioned herein shall be sufficiently evidenced by a written order
of the Company and any resolution of the Board of Directors may be sufficiently
evidenced by a resolution of the Board of Directors.

 

(m)          The rights, privileges,
protections, immunities and benefits given to the Trustee, including, without
limitation, its right to be indemnified, are extended to, and shall be
enforceable by, U.S. Bank National Association in each of its capacities
hereunder, and each 

 

42

 

agent, custodian and other
Person employed to act hereunder, except that under no circumstances shall the
Exchange Agent or the Paying Agent be deemed to owe any fiduciary duty to the
Company, the Guarantor, or the Holders.

 

(n)           The Trustee may request that
the Company and the Guarantor each deliver a certificate setting forth the
names of individuals and/or titles of officers authorized at such time to take
specified actions pursuant to the Indenture.

 

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 its Affiliates with the same rights it would
have if it were not Trustee.  Any Paying
Agent or Registrar may do the same with like rights.  However, the Trustee must comply with Section 7.09.

 

Section 7.04           Trustee’s Disclaimer.  The Trustee shall not be responsible for and
makes no representation as to the validity or adequacy of this Indenture, any
Guarantee or the Notes, shall not be accountable for the Company’s use of the
proceeds from the Notes, and it shall not be responsible for any statement of
the Company or the Guarantor in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee’s
certificate of authentication.  The
Trustee shall not be charged with knowledge of any Default or Event of Default
under Sections 6.01(c), (d), (e), (f), (g), (h), (i), (j), (k) or (l) or
of the identity of any Significant Subsidiary unless a Trust
Officer of the Trustee shall have received written notice thereof in accordance
with Section 12.01 from the Company, the Guarantor or any Holder
referencing this Indenture and the specific Default or Event of Default.

 

Section 7.05           Notice of
Defaults.  If a Default or Event of
Default occurs and is continuing and if in the case of an Event of Default
specified in Section 6.01(a) or (b) it is actually known to the
Trustee, or otherwise, if the Trustee has received written notice thereof, the
Trustee shall mail to each Holder notice of the Default within the earlier of
90 days after it occurs or 30 days after it is actually known to a
Trust Officer in the event of a payment default under Section 6.01(a) or
6.01(b) or written notice of it is received by a Trust Officer of the
Trustee.  Except in the case of a Default
in the payment of principal of, premium (if any) or interest on any Note or a
default in the payment or delivery of the consideration due upon exchange, the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of the Holders.

 

Section 7.06           Compensation
and Indemnity.  The Company shall pay to
the Trustee from time to time reasonable compensation for its services.  The Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust.  The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its
services.  Such expenses shall include
the reasonable compensation and expenses, disbursements and advances of the
Trustee’s agents, counsel, accountants and experts.  The Company and the Guarantor, jointly and
severally, shall indemnify the Trustee (which, for the purposes of this Section 7.06,
shall include its directors, officers, employees and agents) against any and
all loss, liability, claim, damage or expense (including reasonable attorneys’
fees and expenses) incurred by or in connection with the administration of this
trust and the performance of its duties hereunder.  The 

 

43

 

Trustee
shall notify the Company of any claim for which it may seek indemnity promptly
upon obtaining actual knowledge thereof; provided,
however, that any failure
so to notify the Company shall not relieve the Company or the Guarantor of its
indemnity obligations hereunder.  The
Company shall defend the claim and the indemnified party shall provide
reasonable cooperation at the Company’s expense in the defense.  Such indemnified parties may have separate
counsel and the Company and the Guarantor, as applicable, shall pay the fees
and expenses of such counsel; provided,
however, that the Company shall
not be required to pay such fees and expenses if it assumes such indemnified
parties’ defense and, in such indemnified parties’ reasonable judgment, there
is no conflict of interest between the Company and the Guarantor, as
applicable, and such parties in connection with such defense.  The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by an indemnified
party solely attributable to such party’s own willful misconduct, gross
negligence or bad faith.

 

To
secure the Company’s payment obligations in this Section 7.06, the Trustee
shall have a lien prior to the Notes on all money or property held or collected
by the Trustee other than money or property held in trust to pay principal of
and interest on particular Notes or to pay or deliver the consideration due
upon exchange.

 

The
Company’s payment and indemnity obligations pursuant to this Section 7.06
shall also extend to the Registrar, Paying Agent and Exchange Agent hereunder,
and survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any bankruptcy law or the resignation or
removal of the Trustee.  Without
prejudice to any other rights available to the Trustee under applicable law,
when the Trustee incurs expenses after the occurrence of a Default specified in
Section 6.01(h) or (i) with respect to the Company, the expenses
are intended to constitute expenses of administration under the Bankruptcy Law.

 

Section 7.07           Replacement of
Trustee.  (a)  The Trustee may
resign at any time by so notifying the Company. 
The Holders of a majority in principal amount of the Notes may remove
the Trustee by so notifying the Trustee and may appoint a successor
Trustee.  The Company shall remove the
Trustee if:

 

(i)            the Trustee fails to comply with Section 7.09;

 

(ii)           the Trustee is
adjudged bankrupt or insolvent;

 

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

 

(iv)          the Trustee
otherwise becomes incapable of acting.

 

(b)           If the Trustee
resigns, is removed by the Company or by the Holders of a majority in principal
amount of the Notes and such Holders do not reasonably promptly appoint a
successor Trustee, or if a vacancy exists in the office of Trustee for any
reason (the Trustee in such event being referred to herein as the retiring
Trustee), the Company shall promptly appoint a successor Trustee.

 

44

 

(c)           A successor Trustee shall
deliver a written acceptance of its appointment to the retiring Trustee and to
the Company.  Thereupon 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. 
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 7.06.

 

(d)           If a successor Trustee does
not take office within 60 days after the retiring Trustee resigns or is
removed, the retiring Trustee or the Holders of 10% in principal amount of the
Notes may petition at the expense of the Company any court of competent
jurisdiction for the appointment of a successor Trustee.

 

(e)           If the Trustee fails to comply
with Section 7.09, unless the Trustee’s duty to resign is stayed as
provided in Section 310(b) of the TIA, any Holder who has been a bona
fide holder of a Note for at least six months may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.

 

(f)            Notwithstanding the
replacement of the Trustee pursuant to this Section 7.07, the Company’s
obligations under Section 7.06 shall continue for the benefit of the
retiring Trustee.

 

Section 7.08           Successor
Trustee by Merger. If the Trustee consolidates with, merges or converts into,
or transfers all or substantially all of its corporate trust business or assets
to, another corporation or banking association, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee.

 

In
case, at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture, any of the Notes shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication
of any predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee may authenticate such Notes either in the name of any
predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which is anywhere in
the Notes or in this Indenture provided that the certificate of the Trustee
shall have.

 

Section 7.09           Eligibility;
Disqualification.  The Trustee shall at
all times satisfy the requirements of Section 310(a) of the TIA.  The Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition.  The Trustee
shall comply with Section 310(b) of the TIA, subject to its right to
apply for a stay of its duty to resign under the penultimate paragraph of
Section 310(b) of the TIA; provided,
however, that there shall be
excluded from the operation of Section 310(b)(1) of the TIA any
indenture or indentures under which other Notes or certificates of interest or
participation in other Notes of the Company are outstanding if the requirements
for such exclusion set forth in Section 310(b)(1) of the TIA are met.

 

45

 

 

Article VIII

 

Discharge of Indenture

 

Section 8.01           Discharge of
Liability on Notes.  (a)  When
(i) all outstanding Notes (other than Notes replaced or paid pursuant to
Section 2.08) have been canceled or delivered to the Trustee for
cancellation or (ii) all outstanding Notes have become due and payable,
whether at Stated Maturity or as a result of receipt of Fundamental Change
Purchase Notices or upon exchange or otherwise in respect of all outstanding
Notes and the Company irrevocably deposits with the Trustee funds in an amount
sufficient to pay the principal of and interest on the outstanding Notes when
due at Stated Maturity or upon any Fundamental Change Purchase Date, including
interest thereon to the Maturity Date or Fundamental Change Purchase Date (other
than Notes replaced or paid pursuant to Section 2.08), and/or the cash
portion of the Exchange Consideration and OI Inc. has deposited the applicable
number of shares of OI Inc. Common Stock, if any, and if in each case the
Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 8.01(b), cease to be of further
effect.  The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers’ Certificate and an Opinion of Counsel and at the
cost and expense of the Company.

 

Upon
satisfaction of the conditions set forth herein and upon request of the
Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.

 

(b)           Notwithstanding
clauses (a) above, the Company’s obligations in Sections 2.04, 2.05,
2.06, 2.07, 2.08, 2.09, 7.06, 7.07 and in this Article VIII shall survive
until the Notes have been paid in full. 
Thereafter, the Company’s obligations in Sections 7.06, 8.05 and 8.06
shall survive such satisfaction and discharge.

 

Section 8.02           Application of
Trust Money.  The Trustee shall hold in
trust money or any shares of OI Inc. Common Stock due in respect of exchanged
Notes deposited with it pursuant to this Article VIII.  It shall apply the deposited money through
the Paying Agent and in accordance with this Indenture to the payment of
principal of and interest on the Notes or, in the case of any shares of OI Inc.
Common Stock in respect of exchanged Notes, in accordance with this Indenture
in relation to the exchange of Notes pursuant to the terms hereof

 

Section 8.03           Repayment to
Company.  Each of the Trustee and the
Paying Agent shall promptly turn over to the Company upon request any money or
to OI Inc. upon request any shares of OI Inc. Common Stock due in respect of
exchanged Notes held by it as provided in this Article VIII are in excess
of the amount thereof which would then be required to be deposited to effect an
equivalent discharge in accordance with this Article VIII.

 

Subject
to any applicable abandoned property law, the Trustee and the Paying Agent
shall pay to the Company and OI Inc., as applicable, upon written request any
money held by them for the payment of principal or interest or any shares of OI
Inc. Common Stock due in respect of exchanged Notes that remains unclaimed for
two years, and, thereafter, Holders entitled to the money or any shares of OI
Inc. Common Stock due in respect of exchanged Notes 

 

46

 

must look to the Company for payment as
general creditors, and the Trustee and the Paying Agent shall have no further
liability with respect to such monies or shares of OI Inc. Common Stock due in
respect of exchanged Notes.

 

Section 8.04           Reinstatement.  If the Trustee or Paying Agent is unable to
apply any money or any shares of OI Inc. Common Stock or other property due in
respect of exchanged Notes in accordance with this Article VIII by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company’s and Guarantor’s obligations under this Indenture,
and OI Inc.’s obligations under this Indenture with respect to delivering the
portion of the Exchange Consideration that consists of shares of OI Inc. Common
Stock and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to this Article VIII until such time as the Trustee or
Paying Agent is permitted to apply all such money or any shares of OI Inc.
Common Stock or other property due in respect of exchanged Notes in accordance
with this Article VIII; provided,
however, that, if the Company has
made any payment of principal of or interest on any Notes because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.

 

Article IX

 

Amendments and Waivers

 

Section 9.01           Without Consent
of Holders.  The Company, the Guarantors
and the Trustee may amend this Indenture or the Notes without notice to or
consent of any Holder:

 

(i)            cure any ambiguity, omission, defect or
inconsistency in this Indenture or the Notes in a manner that does not
adversely affect the rights of any Holder;

 

(ii)           provide for the
assumption by a Successor Company or Successor Guarantor, as the case may be,
of the obligations of the Company, OI Inc., OI Group or the other Guarantors
under Article V;

 

(iii)          provide for the
assumption of the obligations of the Company and the Guarantors to Holders of
the Notes by OI Inc. in accordance with Article V and Section 11.05;

 

(iv)          add additional
Guarantees with respect to the Notes;

 

(v)           secure the Notes;

 

(vi)          add to the
covenants of the Company, the Guarantors or OI Inc. or the benefit of the
Holders or surrender any right or power conferred upon the Company, the
Guarantors or OI Inc.;

 

(vii)         make any change
that does not adversely affect the rights of any Holder;

 

(viii)        appoint a
successor Trustee with respect to the Notes;

 

47

 

(ix)           comply with any
requirement of the SEC in connection with the qualification of this Indenture
under the Trust Indenture Act; or

 

(x)            conform the
provisions of this Indenture to the “Description of Notes” section in the
Offering Memorandum, as supplemented by the pricing term sheet.

 

After
an amendment under this Section 9.01 becomes effective, the Company shall
mail to Holders a notice briefly describing such amendment and make such notice
available on the Company’s website.  The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.01.

 

Section 9.02           With Consent of
Holders.  The Company, the Guarantors and
the Trustee may amend this Indenture or the Notes without notice to any Holder
but with the written consent of the Holders of at least a majority in aggregate
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, the Notes).  However, without
the consent of each Holder affected, an amendment may not:

 

(i)            reduce the percentage in aggregate principal amount
of Notes whose Holders must consent to an amendment of this Indenture or to
waive any past Default;

 

(ii)           reduce the rate
of, or extend the stated time for, payment of interest on any Note;

 

(iii)          reduce the
principal amount, or extend the Maturity Date, of any Note;

 

(iv)          make any change
that impairs or otherwise adversely affects the exchange rights of any Notes;

 

(v)           reduce the
Fundamental Change Purchase Price of any Note or amend or modify in any manner
adverse to the Holders of Notes the Company’s obligation to make such payments,
whether through an amendment or waiver of provisions in the covenants,
definitions or otherwise;

 

(vi)          make any Note
payable in a currency other than that stated in the Note;

 

(vii)         other than in
accordance with the provisions of this Indenture release any Guarantor from any
of its obligations under its Guarantee of the Notes;

 

(viii)        impair the
right of any Holder to receive payment of principal of and interest on such
Holder’s Notes on or after the due dates therefor, the right to receive payment
or delivery of the Exchange Consideration due upon exchange, or to institute
suit for the enforcement of any payment on or with respect to such Holder’s
Notes; or

 

(ix)           make any change
in the amendment or waiver provisions of the Indenture.

 

48

 

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, but
it shall be sufficient if such consent approves the substance thereof.

 

After
an amendment under this Section 9.02 becomes effective, the Company shall
mail to Holders a notice briefly describing such amendment and make such notice
available on the Company’s website.  The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.02.

 

Section 9.03           Revocation and
Effect of Consents and Waivers.  (a) 
A consent to an amendment or a waiver by a Holder of a Note shall bind the
Holder and every subsequent Holder of that Note or portion of the Note that
evidences the same debt as the consenting Holder’s Note, even if notation of
the consent or waiver is not made on the Note. 
However, any such Holder or subsequent Holder may revoke the consent or
waiver as to such Holder’s Note or portion of the Note if the Trustee receives
the notice of revocation before the date on which the Trustee receives an
Officers’ Certificate from the Company certifying that the percentage of
consents have been received.  After an
amendment or waiver becomes effective, it shall bind every applicable
Holder.  An amendment or waiver becomes
effective upon the receipt by the Company or the Trustee of the requisite
percentage of consents.

 

(b)           The Company
may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to give their consent or take any other action
described above or required or permitted to be taken pursuant to this Indenture.  If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. 
No such consent shall be valid or effective for more than 120 days after
such record date.

 

Section 9.04           Notation on or Exchange
of Notes.  If an amendment changes the
terms of a Note, the Trustee may require the Holder of the Note to deliver it
to the Trustee.  The Trustee may place an
appropriate notation on the Note regarding the changed terms and return it to
the Holder.  Alternatively, 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.  Failure to make the
appropriate notation or to issue a new Note shall not affect the validity of
such amendment.

 

Section 9.05           Trustee to Sign
Amendments.  The Trustee shall sign any
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the
Trustee.  If it does, the Trustee may,
but need not, sign it.  In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and shall be provided with, and (subject to
Section 7.01) shall be fully protected in relying upon, an Officers’
Certificate and an Opinion of Counsel stating that such amendment is authorized
or permitted by this Indenture and that such amendment is the legal, valid and
binding obligation of the Company and the Guarantor enforceable against them in
accordance with its terms, subject to customary exceptions, and complies with
the provisions hereof.

 

49

 

Article X

 

Guarantees

 

Section 10.01         Guarantees.
Subject to the provisions of this Article X, the Guarantors hereby,
jointly and severally, fully and unconditionally, guarantee (the “Guarantee”)
to each Holder and to the Trustee and its successors and assigns (x) the
due and punctual payment of principal of and interest on the Notes whether at
Stated Maturity, by acceleration or otherwise, and all other monetary
obligations of the Company under this Indenture (including obligations to the
Trustee) with respect to the Notes on a senior unsecured basis and (y) 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 X 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 X 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 X),
the Notes or any other agreement, unless such rescission, waiver, amendment,
modification or supplement expressly affects the obligations of any Guarantor
under this Section 10.01;

 

(d) the release of any security held by any Holder or the Trustee
for the Obligations or any of them;

 

(e) the failure of any Holder or Trustee to exercise any right or
remedy against any other guarantor of the Obligations; or

 

(f) any change in the ownership of the Company.

 

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

 

50

 

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 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, (w) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in Article VI
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 (x) in the event of any declaration of acceleration
of such Obligations as provided in Article VI, 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.

 

51

 

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 Guarantees.

 

To
evidence its Guarantee set forth in Section 10.01, each Guarantor hereby
agrees 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 the absence of the
endorsement or any notation of such Guarantee on the Notes.

 

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

 

The
delivery of any Note to which this Article X 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 X 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 X
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise of any right, power or
privilege.  The rights, remedies and
benefits of the Trustee and the Holders herein expressly specified are
cumulative and not exclusive of any other rights, remedies or benefits which
either may have under this Article X 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 10.06.  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 

 

52

 

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 direct or indirect Domestic
Subsidiary of OI Group that guarantees the Company’s Indebtedness under the
Credit Agreement, including the reinstatement or renewal of a guarantee of
Indebtedness under the Credit Agreement previously released under the Credit
Agreement, to execute and deliver a supplement to this Indenture providing that
such Domestic Subsidiary will be a Guarantor hereunder and deliver an Opinion
of Counsel to the Trustee within 10 Business Days of the date on which it
executes a Guarantee under the Credit Agreement.  Domestic Subsidiaries that are Guarantors on
the date any such supplement is executed by an additional Domestic Subsidiary
shall not be required to become parties to such supplement and hereby agree to
the execution and delivery by any additional Domestic Subsidiary of any such
supplement.  In addition, OI Group shall
cause each direct or indirect Domestic Subsidiary of OI Group that, directly or
indirectly, guarantees the payment of any other Indebtedness of the Company or
OI Group to simultaneously execute and deliver 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 10.09         Modification.No
modification, amendment or waiver of any provision of this Article X, 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 X 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.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 X.

 

53

 

(b)           A Guarantor shall be
released from its Obligations under this Indenture and Guarantee if such
Guarantor sells or otherwise disposes of all or substantially all of its assets
to, or consolidates with or merges with or into another Person or upon any sale
of all of the Capital Stock of a Guarantor to another person, other than the
Company or another Guarantor and the consolidation, merger or sale, assignment,
conveyance, transfer or other disposition is effected in accordance with Section 5.01(b)(ii).

 

(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 5.02 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 5.01(b)(ii).

 

Article XI

 

Exchange of Notes

 

Section 11.01         Exchange
Rights.Subject to and upon compliance with the provisions of this Article XI,
a Holder shall have the right, at such Holder’s option, to exchange all or any
portion (long as the portion exchanged has an aggregate principal amount that
is equal to an integral multiple of $1,000 principal amount) of its Notes, at
any time prior to 5:00 p.m., New York City time, on the second Scheduled
Trading Day immediately preceding the Maturity Date at an exchange rate (the “Exchange
Rate”) initially equal to 21.0642 shares of OI Inc. Common Stock (subject to
adjustments as provided in Sections 11.03 and 11.04) per $1,000 principal
amount of Notes (the “Exchange Obligation”) only under the following
circumstances:

 

(a)           Exchange
Upon Satisfaction of Sale Price Condition.  Prior to 5:00 p.m., New York City time,
on the Business Day immediately preceding March 1, 2015, a Holder may
surrender all or a portion of its Notes for exchange in any fiscal quarter (and
only during such fiscal quarter) commencing after June 30, 2010 if the
Last Reported Sale Price of OI Inc. Common Stock for at least 20 Trading Days
(whether or not consecutive) in the period of 30 consecutive Trading Days
ending on the last Trading Day of the immediately preceding fiscal quarter is
greater than or equal to 130% of the applicable Exchange Price on each
applicable Trading Day;

 

Whenever
the Notes shall become exchangeable pursuant to this Section 11.01(a), the
Company shall notify the Holders and the Trustee in writing and shall make such
notice available on the Company’s website.

 

(b)           Exchange
Upon Satisfaction of Trading Price Condition.  Prior to 5:00 p.m., New York City time,
on the Business Day immediately preceding March 1, 2015, a Holder may
surrender all or a portion of its notes for exchange during the five Business
Day period immediately after any five consecutive Trading Day period (the “Trading
Price Measurement Period”) in which the Trading Price per $1,000 principal
amount of Notes, as determined following a request by a Holder of at least
$2,000,000 in aggregate principal amount of Notes in accordance with the
procedures set forth in this Section 11.01(b), for each Trading Day in
that 

 

54

 

Trading
Price Measurement Period was less than 98% of the product of the Last Reported
Sale Price of OI Inc. Common Stock and the applicable Exchange Rate for such
Trading Day.

 

The
Bid Solicitation Agent shall have no obligation to determine the Trading Price
of the Notes on a date of determination unless the Company has requested that
the Bid Solicitation Agent make such determination.  The Company shall have no obligation to
request that the Bid Solicitation Agent determine the Trading Price per $1,000
principal amount of Notes on a date of determination unless a Holder of at
least $2,000,000 in aggregate principal amount of Notes provides the Company
with reasonable evidence that the Trading Price per $1,000 principal amount of
Notes would be less than 98% of the product of the Last Reported Sale Price of
the OI Inc. Common Stock and the applicable Exchange Rate.  At such time, the Company shall instruct the
Bid Solicitation Agent to determine the Trading Price per $1,000 principal
amount of the Notes beginning on the next Trading Day and on each successive
Trading Day until the Trading Price per $1,000 principal amount of Notes is
greater than or equal to 98% of the product of the Last Reported Sale Price of
OI Inc. Common Stock.

 

Whenever
the Notes shall become exchangeable pursuant to this Section 11.01(b), the
Company shall notify the Holders and the Trustee in writing and make such
notice available to the Company’s website. 
If, at any time after the Trading Price condition has been met, the
Trading Price per $1,000 principal amount of Notes is greater than or equal to
98% of the product of the Last Reported Sale Price of OI Inc. Common Stock and
the applicable Exchange Rate, the Company will so notify the Holders and the Trustee
in writing.

 

(c)           Exchange
Upon Certain Distributions.  Prior to 5:00 p.m., New York City time,
on the Business Day immediately preceding March 1, 2015, if OI Inc. elects
to:

 

(i)            distribute to all or substantially all holders of OI
Inc. Common Stock any rights, options or warrants entitling them for a period
of not more than 60 calendar days after the issuance date of such distribution
to subscribe for or purchase shares of OI Inc. Common Stock, at a price per
share less than the average of the Last Reported Sale Prices of OI Inc. Common
Stock over the 10 consecutive Trading Day period ending on, and including, the
Trading Day immediately preceding the declaration date of such distribution; or

 

(ii)           distribute to
all or substantially all holders of OI Inc. Common Stock its assets, debt
securities or rights to purchase its securities, which distribution has a per
share value, as reasonably determined by the Board of Directors of OI Inc.,
exceeding 10% of the Last Reported Sale Price of the OI Inc. Common Stock on
the Trading Day preceding the declaration date of such distribution,

 

then,
in each case, the Company shall notify the Trustee and the Holders in writing
at least 25 Scheduled Trading Days prior to the Ex-Dividend Date for such
distribution.  The Company shall also
issue a press release, and make the press release available on the Company’s
website, announcing the satisfaction of this exchange contingency.  Once the Company has given such notice, a
Holder may surrender all or a portion of its Notes for exchange at any time
from, and including, the date the Company mails such notice until the earlier
of (i) 5:00 p.m., New York City time, on the Business Day immediately
prior to the Ex-Dividend Date or (ii) the date of OI 

 

55

 

Inc.’s
announcement that such distribution will not take place.  A Holder may not exchange any of its Notes
based on this exchange contingency if such Holder will otherwise participate in
the distribution without exchange (based upon the Exchange Rate and upon the
same terms as holders of OI Inc. Common Stock) as a result of holding the
Notes.

 

(d)           Exchange
Upon Certain Corporate Events.  Prior to 5:00 p.m., New York City time,
on the Business Day immediately preceding March 1, 2015, in the event of a
Fundamental Change (without regard to the exclusion of transactions involving
Publicly Traded Securities in the paragraph following clause (6) of the
definition of Fundamental Change) or a Make-Whole Fundamental Change, a Holder
may surrender all or a portion of its Notes for exchange at any time from and
after the date which is the later of the 25th Scheduled Trading Day prior to
the anticipated effective date of such transaction and the Business Day after
the Company has given notice of such transaction until (i) in the case of
a Fundamental Change, the later of the 30th Business Day after the actual
effective date of such transaction or the Business Day immediately preceding
the Fundamental Change Purchase Date corresponding to such Fundamental Change,
and (ii) in the case of a Make-Whole Fundamental Change that does not
constitute a Fundamental Change, the 20th Business Day immediately following
the Effective Date of such Make-Whole Fundamental Change.

 

The
Company will notify Holders and the Trustee and issue a press release, and make
the press release available on the Company’s website, as soon as practicable
following the date the Company publicly announces the anticipate effective date
of such transaction but in no event later than 25 Scheduled Trading Days prior
to the anticipated effective date of such transaction, or, if at such time the
Company does not have knowledge of such transaction or its anticipated
effective date, within three Business Days after the date upon which the Company
received notice or otherwise became aware of such transaction and its
anticipated effective date, but in no event later than the actual effective
date of such transaction. The Company will update its notice and issue a press
release, and make the press release available on the Company’s website,
promptly if the anticipated effective date subsequently changes.

 

(e)           Exchange
on or after March 1, 2015.  On or after March 1, 2015, a Holder may
exchange all or a portion of its Notes at any time prior to 5:00 p.m.,
New York City time, on the second Scheduled Trading Day immediately
preceding the Maturity Date.

 

Section 11.02         Exchange
Procedures; Settlement Upon Exchange; Fractional Shares.In order to exercise
the exchange right with respect to any Notes in certificated form, a Holder
must:

 

(i)            complete and manually sign an irrevocable notice of
exchange in the form entitled “Exchange Notice” attached to the reverse of such
certificated Note (or a facsimile thereof) (an “Exchange Notice”);

 

(ii)           deliver such Exchange
Notice and certificated Note to the Exchange Agent at the office of the
Exchange Agent;

 

56

 

 

(iii)                               to the extent
any shares of OI Inc. Common Stock issuable by OI Inc. upon exchange are to be
issued in a name other than the Holder’s, furnish endorsements and transfer
documents as may be required by the Exchange Agent;

 

(iv)                              if required
pursuant to Section 11.02(g), pay all transfer or similar taxes or duties;
and

 

(v)                                 if required
pursuant to Section 11.02(h), pay funds equal to interest payable on the
next Interest Payment Date to which the exchanging Holder is not entitled.

 

In
order to exercise the exchange right with respect to any beneficial interest in
a Global Note, a Holder must:

 

(A)                              comply with the Depositary’s
procedures for exchanging a beneficial interest in a Global Note;

 

(B)                                to the extent
any shares of OI Inc. Common Stock issuable by OI Inc. upon exchange are to be
issued in a name other than the Holder’s, furnish endorsements and transfer
documents as may be required by the Exchange Agent;

 

(C)                                if required
pursuant to Section 11.02(g), pay all transfer or similar taxes or duties;
and

 

(D)                               if required
pursuant to Section 11.02(h), pay funds equal to interest payable on the
next Interest Payment Date to which the exchanging Holder is not entitled.

 

The
date that the Holder satisfies the foregoing requirements with respect to a
Note is the “Exchange Date”.

 

If
a Holder has submitted any Notes for purchase pursuant to Section 3.01,
such Notes may be exchanged only if the Holder submits a withdrawal notice in
accordance with Section 3.01(d), and if such Notes are evidenced by a
Global Note, if the Holder complies with appropriate Depositary procedures.

 

A
Holder is not entitled to any rights of a holder of OI Inc. Common Stock until
such Holder has exchanged its Notes into shares of OI Inc. Common Stock, and
only to the extent such Notes are deemed to have been exchanged to OI Inc.
Common Stock under this Article XI. 
Each Holder which exchanges Notes for OI Inc. Common Stock will be
deemed to have represented to the Company and OI Inc. that it is a QIB.

 

(b)                                 Upon exchange
of any Note, the Exchange Obligation shall be satisfied by the Company’s paying
cash and OI Inc.’s delivering shares of OI Inc. Common Stock, if any, together
with cash in lieu of fractional shares (the “Exchange Consideration”).  The amount of cash and the number of shares
of OI Inc. Common Stock, if any, due upon exchange of a Note will be equal to
the sum of the Daily Settlement Amounts for each of the 20 consecutive Trading
Days during the applicable Cash Settlement Averaging Period, plus cash in lieu
of any fractional 

 

57

 

shares
of OI Inc. Common Stock issuable upon exchange as determined in accordance with
Section 11.02(i).

 

Each
Note shall be deemed to have been exchanged immediately prior to 5:00 p.m.,
New York City time, on the Exchange Date and the Holder shall be treated as a
Holder of record of any OI Inc. Common Stock issued upon the exchange of such
Note on the final day of the applicable Cash Settlement Averaging Period.

 

The
Company shall deliver the cash and OI Inc. shall deliver the shares of OI Inc.
Common Stock, if any, on the third Business Day immediately following the last
Trading Day of the applicable Cash Settlement Averaging Period; provided,
however, that if, on or prior to the Exchange Date for any exchanged
Note, OI Inc. Common Stock has been replaced by Reference Property consisting
solely of cash pursuant to Section 11.05, the Company shall deliver the
cash due in respect of such Note on the third Business Day immediately
following the applicable Exchange Date.

 

(c)                                  OI Inc.’s only
obligation in connection with a Holder’s exercise of its exchange rights under
this Indenture is to deliver the portion of the Exchange Consideration that
consists of shares of OI Inc. Common Stock. 
As a result, in the case of any failure to deliver the Exchange
Consideration to an exchanging Holder upon such Holder’s exercise of its
exchange rights under this Indenture, such Holder’s only claim with respect to
OI Inc. would be for the portion of the Exchange Consideration that consists of
shares of OI Inc. Common Stock (or cash in lieu of a fractional share of OI
Inc. Common Stock), and such Holder’s only claim with respect to the Company
would be for the portion of the Exchange Consideration that consists of cash
(other than any portion that corresponds to a fractional share of OI Inc.
Common Stock).

 

(d)                                 If more than
one Note shall be surrendered for exchange at one time by the same Holder, the
Exchange Obligation with respect to such Notes, if any, that shall be payable
upon exchange shall be computed on the basis of the aggregate principal amount
of the Notes (or specified portions thereof to the extent permitted thereby) so
surrendered.

 

(e)                                  In case any
Note shall be surrendered for partial exchange, the Company shall execute and
the Trustee shall authenticate and deliver to or upon the written order of the
Holder of the Notes so surrendered, without charge to such Holder, a new Note
or Notes in authorized denominations in an aggregate principal amount equal to
the unexchanged portion of the surrendered Note.

 

(f)                                    Upon the
exchange of an interest in a Global Note, the Trustee and the Depositary shall
reduce the principal amount of such Global Note in their records.

 

(g)                                 The issue of
stock certificates on exchanges of Notes shall be made without charge to the
exchanging Holder for any documentary, stamp or similar issue or transfer tax
in respect of the issue thereof.  The
Company shall not, however, be required to pay any such tax which may be
payable in respect of any transfer involved in the issue and delivery of stock
in any name other than that of the Holder of any Notes exchanged, and OI Inc.
shall not be required to issue or deliver any such stock certificate unless and
until the Person or Persons requesting the 

 

58

 

issue thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.

 

(h)                                 Upon exchange,
Holders will not be entitled to any additional cash payment for accrued and
unpaid interest, except to the extent set forth below.  The Company’s delivery to an exchanging
Holder of the cash portion of the Exchange Obligation and OI Inc.’s delivery to
such exchanging Holder of the portion of the Exchange Consideration consisting
of shares of OI Inc. Common Stock, if any, together with any cash payment for
any fractional share issuable upon exchange, will be deemed to satisfy in full
the Company’s obligation to pay the principal amount of the Notes so exchanged
and accrued and unpaid interest to, but not including, the Exchange Date.

 

As
a result, upon exchange, accrued and unpaid interest to, but not including, the
Exchange Date will be deemed to be paid in full rather than cancelled,
extinguished or forfeited.

 

Notwithstanding
the foregoing, if Notes are exchanged after 5:00 p.m., New York City time,
on a Regular Record Date but prior to 9:00 a.m., New York City time, on
the corresponding Interest Payment Date, Holders of such Notes at 5:00 p.m.,
New York City time, on such Regular Record Date will receive the interest
payable on such Notes on the corresponding Interest Payment Date
notwithstanding the exchange of such Notes. 
Any Notes surrendered for exchange during the period from 5:00 p.m.,
New York City time, on any Regular Record Date to 9:00 a.m., New York City
time, on the corresponding Interest Payment Date (whether or not the Holder was
the Holder of record on the Regular Record Date) must be accompanied by funds
equal to the amount of interest payable on the Notes so exchanged; provided  that no such payment need be made:

 

(A)                              if the Notes are surrendered
for exchange after 5:00 p.m., New York City time, on November 15,
2015, which is the Regular Record Date immediately preceding the Maturity Date;

 

(B)                                if the Company
has specified a Fundamental Change Purchase Date that is after a Regular Record
Date and on or prior to the Business Day immediately following the
corresponding Interest Payment Date and the Holder exchanges its Notes after
such Regular Record Date and on or prior to such corresponding Interest Payment
Date; or

 

(C)                                to the extent
of any overdue interest, if any overdue interest exists at the time of exchange
with respect to such Notes.

 

(i)                                   No fractional
shares of OI Inc. Common Stock shall be issued by OI Inc. upon exchange of any
Note or Notes.  OI Inc. shall deliver
cash in lieu of any fractional shares of OI Inc. Common Stock issuable in
connection with an exchange of Notes equal to the product of (i) such
fraction of a share and (ii) the daily VWAP of OI Inc. Common Stock on the
last Trading Day of the applicable Cash Settlement Averaging Period.

 

Section 11.03         Adjustment
to Exchange Rate Upon Exchange Upon a Make-Whole Fundamental Change.  (a) If a Make-Whole Fundamental Change
occurs and a Holder elects to exchange its Notes at any time during the
Make-Whole Fundamental Change Period, 

 

59

 

then
the Company shall increase the Exchange Rate for the Notes so surrendered for
exchange by a number of additional shares of OI Inc. Common Stock (the “Additional
Shares”) as set forth in this Section 11.03.

 

(b)                                 The number of
Additional Shares by which the Exchange Rate shall be increased for exchanges
that occur during the Make-Whole Fundamental Change Period will be determined
by reference to the table below, based on the applicable Effective Date and
applicable Stock Price paid or deemed paid per share of OI Inc. Common Stock in
the Make-Whole Fundamental Change.

 

(c)                                  The Stock
Prices set forth in the first row of the table below (i.e., column headings)
shall be adjusted as of any date on which the applicable Exchange Rate is
otherwise adjusted.  The adjusted Stock
Prices will equal the Stock Prices applicable immediately prior to such
adjustment, multiplied by a fraction, the numerator of which is the applicable
Exchange Rate immediately prior to the adjustment giving rise to the Stock
Price adjustment and the denominator of which is the applicable Exchange Rate
as so adjusted.  The number of Additional
Shares set forth in such table shall be adjusted in the same manner as the
Exchange Rate pursuant to Section 11.04.

 

(d)                                 The following
table sets forth the number of Additional Shares by which the Exchange Rate
shall be increased based on the Stock Price and Effective Date:

 

	
  Effective

  	
   

  	
  Stock Price

  	
   

  
	
  Date

  	
   

  	
  $33.91

  	
   

  	
  $40.00

  	
   

  	
  $50.00

  	
   

  	
  $60.00

  	
   

  	
  $70.00

  	
   

  	
  $80.00

  	
   

  	
  $90.00

  	
   

  	
  $100.00

  	
   

  	
  $110.00

  	
   

  	
  $120.00

  	
   

  
	
  May 7, 2010

  	
   

  	
  8.4256

  	
   

  	
  5.9202

  	
   

  	
  3.6882

  	
   

  	
  2.5675

  	
   

  	
  1.9426

  	
   

  	
  1.5591

  	
   

  	
  1.3014

  	
   

  	
  1.0764

  	
   

  	
  0.9403

  	
   

  	
  0.8320

  	
   

  
	
  June 1, 2011

  	
   

  	
  8.4256

  	
   

  	
  5.7277

  	
   

  	
  3.3470

  	
   

  	
  2.2123

  	
   

  	
  1.6176

  	
   

  	
  1.2718

  	
   

  	
  1.0487

  	
   

  	
  0.9040

  	
   

  	
  0.7922

  	
   

  	
  0.7032

  	
   

  
	
  June 1, 2012

  	
   

  	
  8.4256

  	
   

  	
  5.4955

  	
   

  	
  2.9465

  	
   

  	
  1.8134

  	
   

  	
  1.2696

  	
   

  	
  0.9787

  	
   

  	
  0.8109

  	
   

  	
  0.6859

  	
   

  	
  0.6004

  	
   

  	
  0.5331

  	
   

  
	
  June 1, 2013

  	
   

  	
  8.4256

  	
   

  	
  5.1361

  	
   

  	
  2.3980

  	
   

  	
  1.3095

  	
   

  	
  0.8615

  	
   

  	
  0.6513

  	
   

  	
  0.5457

  	
   

  	
  0.4717

  	
   

  	
  0.4162

  	
   

  	
  0.3717

  	
   

  
	
  June 1, 2014

  	
   

  	
  8.4256

  	
   

  	
  4.4963

  	
   

  	
  1.5550

  	
   

  	
  0.6541

  	
   

  	
  0.4011

  	
   

  	
  0.3179

  	
   

  	
  0.2719

  	
   

  	
  0.2386

  	
   

  	
  0.2120

  	
   

  	
  0.1899

  	
   

  
	
  June 1, 2015

  	
   

  	
  8.4256

  	
   

  	
  3.9358

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  

 

The
exact Stock Prices and Effective Dates may not be set forth in the table above,
in which case:

 

(i)                                     if the Stock Price is
between two Stock Prices in the table or the Effective Date is between two
Effective Dates in the table, the number of Additional Shares will be
determined by a straight-line interpolation between the number of Additional
Shares set forth for the higher and lower Stock Prices and the earlier and
later Effective Dates, as applicable, based on a 365-day year;

 

(ii)                                  if the Stock
Price is greater than $120.00 per share (subject to adjustment in the same manner
as the Stock Prices set forth in the column headings of the table above
pursuant to Section 11.03(c)), the Exchange Rate will not be increased;

 

(iii)                               if the Stock
Price is less than $33.91 per share (subject to adjustment in the same manner
as the Stock Prices set forth in the column headings of the table above
pursuant to Section 11.03(c)), the Exchange Rate will not be increased.

 

60

 

(e)                                  Notwithstanding
the foregoing, in no event will the Exchange Rate exceed 29.4898 shares per
$1,000 principal amount of Notes, subject to adjustments in the same manner as
the Exchange Rate pursuant to Section 11.04.

 

(f)                                    If a Holder
exchanges a Note after the Effective Date for a Make-Whole Fundamental Change
described in clause (2) of the definition of Fundamental Change in which
the holders of the OI Inc. Common Stock receive only cash in consideration for
their shares of OI Common Stock in such Fundamental Change, in lieu of settling
such exchange in accordance with Section 11.02, the Company will pay to
such Holder, for each $1,000 principal amount of the Notes exchanged, on the
third Business Day immediately following the Exchange Date for such Note, an
amount of cash equal to the product of (i) the Stock Price for such
Make-Whole Fundamental Change and (ii) the applicable Exchange Rate (as
increased by the number of Additional Shares, if any, when required under this Section 11.03).

 

(g)                                 The Company
shall notify the Trustee and the Holders in writing of the anticipated
Effective Date of such Make-Whole Fundamental Change, and issue a press release
(and make such press release available on its website), as soon as practicable
after public announcement by the Company of the anticipated Effective Date of
such Make-Whole Fundamental Change, but in no event less than 25 Scheduled
Trading Days prior to the anticipated Effective Date of such Make-Whole
Fundamental Change, or, if at such time the Company does not have knowledge of
such Make-Whole Fundamental Change or the anticipated Effective Date of such
Make-Whole Fundamental Change, within three Business Day after the date upon
which the Company receives notice or otherwise becomes aware of such
transaction and its anticipate Effective Date, but in no event later than the actual
Effective Date of such transaction.  The
Company shall update its notice, and issue a press release (and make such press
release available on its website), promptly if the anticipated Effective Date
subsequently changes.

 

Section 11.04         Adjustment
of Exchange Rate.  The Exchange Rate
shall be adjusted as described below, except that the Company will not make any
adjustments to the Exchange Rate if Holders participate, as a result of holding
Notes and at the same time and upon the same terms as holders of OI Inc. Common
Stock participate, in any of the transactions described in Section 11.04(a),
Section 11.04(b), Section 11.04(c), and Section 11.04(d),
without having to exchange their Notes as if such Holders held a number of
shares of OI Inc. Common Stock equal to the applicable Exchange Rate
immediately prior to the Ex-Dividend Date for such event multiplied by the
principal amount (expressed in thousands) of Notes held by such Holders,
without having to exchange such Notes.

 

If
any dividend, distribution or issuance described below is declared but not so
paid or made, the Exchange Rate shall again be adjusted, effective as of the
date OI Inc.’s Board of Directors publicly announces its decision not to make
such dividend, distribution or issuance, to the Exchange Rate that would have
been in effect if such dividend, distribution or issuance had not been
declared.

 

(a)                                  If the OI Inc.
issues to all or substantially all of the holders of OI Inc. Common Stock
solely shares of OI Inc. Common Stock as a dividend or distribution on all or
substantially all of the shares of OI Inc. Common Stock, or if OI Inc. effects
a share split or share 

 

61

 

combination
of OI Inc. Common Stock, the Exchange Rate will be adjusted based on the
following formula:

 

	
  ER
  = ER0

  	
  x

  	
  OS

  
	
   

  	
   

  	
  OS0

  

 

where,

 

ER0                    =                     the applicable Exchange Rate
in effect immediately prior to 9:00 a.m., New York City time, on the
Ex-Dividend Date of such dividend or distribution, or immediately prior to 9:00 a.m.,
New York City time, on the effective date of such share split or share
combination, as the case may be;

 

ER                           =                     the applicable Exchange Rate
in effect immediately after 9:00 a.m., New York City time, on such
Ex-Dividend Date or immediately after 9:00 a.m., New York City time, on
the effective date of such dividend or distribution, or immediately after 9:00 a.m.,
New York City time, on the effective date of such share split or share
combination, as the case may be;

 

OS0                     =                     the number of shares of OI
Inc. Common Stock outstanding immediately prior to such dividend, distribution,
share split or share combination, as the case may be; and

 

OS                          =                     the number of shares of OI
Inc. Common Stock outstanding immediately after such dividend, distribution,
share split or share combination, as the case may be.

 

Any
adjustment made pursuant to this Section 11.04(a)  shall become
effective immediately after 9:00 a.m., New York City time, on the
Ex-Dividend Date for such dividend or distribution or effective date of such
share split or share combination, as the case may be.

 

(b)                                 If OI Inc.
distributes to all or substantially all holders of its OI Inc. Common Stock any
rights, options or warrants entitling them for a period of not more than 60
calendar days from the issuance date for such distribution to subscribe for or
purchase shares of OI Inc. Common Stock, at a price per share less than the
average of the Last Reported Sale Prices of OI Inc. Common Stock for the ten
consecutive Trading Day period ending on, and including, the Trading Day
immediately preceding the declaration date of such distribution, the applicable
Exchange Rate will be adjusted based on the following formula:

 

	
  ER = ER0

  	
  x

  	
  
  OS0 + X

  

  
	
   

  	
  OS0 + Y

  

 

where,

 

ER0                      =                     the applicable Exchange Rate
in effect immediately prior to 9:00 a.m., New York City time, on the
Ex-Dividend Date for such distribution;

 

62

 

 

ER                           =                     the applicable Exchange Rate
in effect immediately after 9:00 a.m., New York City time, on such
Ex-Dividend Date for such distribution;

 

OS0           =                     the number of shares of OI
Inc. Common Stock outstanding immediately prior to 9:00 a.m., New York
City time, on such Ex-Dividend Date for such distribution;

 

X                                 =                     the total number of shares
of OI Inc. Common Stock issuable pursuant to such rights, options or warrants;
and

 

Y                                  =                     the number of shares of OI
Inc. Common Stock equal to the aggregate price payable to exercise such rights,
options or warrants divided by
the average of the Last Reported Sale Prices of OI Inc. Common Stock over the
ten consecutive Trading Day period ending on, and including, the Trading Day
immediately preceding the declaration date for such distribution.

 

Any
adjustment made pursuant to this Section 11.04(b) shall become
effective immediately after 9:00 a.m., New York City time, on the
Ex-Dividend Date of such distribution. 
To the extent that such rights, options or warrants are not exercised
prior to their expiration or shares of OI Inc. Common Stock are otherwise not
delivered pursuant to such rights, options or warrants upon the exercise of
such rights, options or warrants, the Exchange Rate shall be readjusted to the
Exchange Rate that would then be in effect had the adjustment made upon the
issuance of such rights, options or warrants been made on the basis of the
delivery of only the number of shares of OI Inc. Common Stock actually
delivered.  For purposes of this Section 11.04(b),
in determining whether any rights, options or warrants entitle the Holders to
subscribe for or purchase OI Inc. Common Stock at a price per share less than
the average of the Last Reported Sale Prices of OI Inc. Common Stock for each
Trading Day in the applicable ten consecutive Trading Day period, there shall
be taken into account any consideration received for such rights, options or
warrants and any amount payable on exercise thereof, with the value of such
consideration, if other than cash, to be determined by OI Inc.’s Board of
Directors.

 

(c)                                  If OI Inc.
distributes shares of its Capital Stock, evidences of its indebtedness, rights,
options, warrants to acquire its Capital Stock or other securities or other
assets or property of OI Inc. to all or substantially all holders of its OI
Inc. Common Stock, excluding:

 

(i)                                     dividends or distributions
(including share splits) described in Section 11.04(a) or (b) above;

 

(ii)                                  dividends or
distributions paid described in Section 11.04(d) below; and

 

(iii)                               Spin-Offs to
which the provisions set forth below in this Section 11.04(c) shall
apply; and

 

(iv)                              any dividends
or distributions in connection with a Reorganization Event; then the applicable
Exchange Rate will be adjusted based on the following formula:

 

63

 

	
  ER = ER0

  	
  x

  	
  
  SP0

  

  
	
   

  	
  SP0 — FMV

  

 

where,

 

ER0           =                     the applicable Exchange Rate
in effect immediately prior to 9:00 a.m., New York City time, on the
Ex-Dividend Date for such distribution;

 

ER                           =                     the applicable Exchange Rate
in effect immediately after 9:00 a.m., New York City time, on such
Ex-Dividend Date for such distribution;

 

SP0            =                     the average of the Last
Reported Sale Prices of OI Inc. Common Stock over the ten consecutive Trading
Day period ending on, and including, the Trading Day immediately preceding the
Ex-Dividend Date for such distribution; and

 

FMV               =                     the fair market value (as
determined by OI Inc.’s Board of Directors) of the shares of capital stock,
evidences of indebtedness, rights, options, warrants to acquire its Capital
Stock or other securities or other assets or property distributed with respect
to each outstanding share of OI Inc. Common Stock on the Ex-Dividend Date for
such distribution.

 

Any
adjustment made pursuant to the preceding paragraph of this Section 11.04(c) shall
become effective immediately after 9:00 a.m., New York City time, on the
Ex-Dividend Date for such distribution.

 

Notwithstanding
the foregoing, if “FMW” (as defined above) is equal to or greater than “SP0” (as defined above), in
lieu of the foregoing adjustments, the Company shall deliver to each Holder
(without such Holder having to exchange its Notes), in respect of each $1,000
principal amount thereof, at the same time and upon the same terms as holders
of OI Inc. Common Stock receive the distributed property, the amount and kind
of distributed property that such Holder would have received if such Holder had
owned a number of shares of OI Inc. Common Stock equal to the Exchange Rate in
effect on the record date for the distribution.

 

With
respect to an adjustment pursuant to this Section 11.04(c) where
there has been a payment of a dividend or other distribution on OI Inc. Common
Stock of shares of Capital Stock of any class or series, or similar equity
interest, of or relating to a subsidiary, affiliate or other business unit of
OI Inc. that will be listed or quoted (or will be listed or quoted upon
consummation of the payment) on a national securities exchange or reasonably
comparable non-U.S. equivalent (a “Spin-Off”), the applicable Exchange Rate
will be increased based on the following formula:

 

64

 

	
  ER = ER0

  	
  x

  	
  
  FMV + MP0

  

  
	
   

  	
  MP0

  

 

where,

 

ER0           =                     the applicable Exchange Rate
in effect immediately prior to 9:00 a.m., New York City time, on the
Ex-Dividend Date for such Spin-Off;

 

ER                           =                     the applicable Exchange Rate
in effect immediately after 9:00 a.m., New York City time, on such
Ex-Dividend Date for such spin-off;

 

FMV               =                     the average of the Last
Reported Sale Prices of the Capital Stock or similar equity interest
distributed to holders of OI Inc. Common Stock applicable to one share of OI
Inc. Common Stock (determined for purposes of the definition of Last Reported
Sale Price as if such Capital Stock or similar equity interest were the OI Inc.
Common Stock) over the first ten consecutive Trading Day period commencing on,
and including, the Effective Date for the Spin-Off (the “Valuation Period”);
and

 

MP0         =                     the average of the Last
Reported Sale Prices of OI Inc. Common Stock over the Valuation Period.

 

The
adjustment to the applicable Exchange Rate under the preceding paragraph of
this Section 11.04(c) will be made immediately after 9:00 a.m.,
New York City time, on the day after the last day of the Valuation Period, but
will be given effect as of 9:00 a.m., New York City time, on the
Ex-Dividend Date for the Spin-Off.  For
purposes of determining the applicable Exchange Rate in respect of any exchange
during the ten Trading Days commencing on the effective date for any Spin-Off,
the reference within this portion of the Section 11.04(c) related to “Spin-Offs”
to ten Trading Days shall be deemed replaced with such lesser number of Trading
Days as have elapsed from, but not including, the effective date for such
Spin-Off to, but excluding, the relevant Exchange Date.  If one or more Trading Days of the Cash
Settlement Averaging Period for any Note occurs on or after the Ex-Dividend
Date for a Spin-Off, but on or prior to the first Trading Day in the Valuation
Period for such Spin-Off, such Cash Settlement Averaging Period will be
suspended on the first such Trading Day and will resume immediately after the
first Trading day of the Valuation Period for such Spin-Off and the reference
in the above definition of “FMV” to “ten” shall be deemed replaced with a
reference to “one.”

 

(d)                                 If OI Inc.
makes or pays any cash dividend or distribution to all or substantially all
holders of OI Inc. Common Stock, the applicable Exchange Rate will be increased
based on the following formula:

 

	
  ER = ER0

  	
  x

  	
  
  SP0

  

  
	
   

  	
  SP0 — C

  

 

where,

 

65

 

ER0           =                     the applicable Exchange Rate
in effect immediately prior to 9:00 a.m., New York City time, on the
Ex-Dividend Date for such dividend or distribution;

 

ER                           =                     the applicable Exchange Rate
in effect immediately after 9:00 a.m., New York City time, on the
Ex-Dividend Date for such dividend or distribution;

 

SP0            =                     the average of the Last
Reported Sale Prices of OI Inc. Common Stock over the ten consecutive Trading
Day period ending on, and including, the Trading Day immediately preceding the
Ex-Dividend Date for such dividend or distribution; and

 

C                                  =                     the amount in cash per share
OI Inc. distributes to holders of OI Inc. Common Stock.

 

Notwithstanding
the foregoing , if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in
lieu of the foregoing adjustment, the Company shall deliver to each Holder
(without such Holder having to exchange its Notes), in respect of each $1,000
principal amount of Notes held by such Holder, at the same time and upon the
same terms as holders of shares of OI Inc. Common Stock receive the distributed
property, the amount of cash that such Holder would have received if such
Holder had owned a number of shares of OI Inc. Common Stock equal to the
applicable Exchange Rate on the record date for such cash distribution.

 

Any
adjustment made pursuant to this Section 11.04(d) shall become
effective immediately after 9:00 a.m., New York City time, on the
Ex-Dividend Date for such dividend or distribution.

 

(e)                                  If OI Inc. or
any of its Subsidiaries makes a payment in respect of a tender offer or
exchange offer for OI Inc. Common Stock and the cash and value of any other
consideration included in the payment per share of OI Inc. Common Stock exceeds
the average of the Last Reported Sale Prices of OI Inc. Common Stock over the
ten consecutive Trading Day period commencing on, and including, the Trading
Day next succeeding the last date on which tenders or exchanges may be made
pursuant to such tender or exchange offer (the “Expiration Date”) , the
applicable Exchange Rate will be increased based on the following formula:

 

	
  ER = ER0

  	
  x

  	
  
  AC
  + (SP x OS)

  

  
	
   

  	
  SP x OS0 

  

 

where,

 

ER0           =                     the applicable Exchange Rate
in effect immediately prior to 9:00 a.m., New York City time, on the
Trading Day next succeeding the Expiration Date;

 

66

 

ER                           =                     the applicable Exchange Rate
in effect immediately after 9:00 a.m., New York City time, on the Trading
Day next succeeding the Expiration Date;

 

AC                        =                     the aggregate value of all
cash and any other consideration (as determined by OI Inc.’s Board of
Directors) paid or payable for shares purchased in such tender or exchange
offer;

 

OS0           =                     the number of shares of OI
Inc. Common Stock outstanding immediately prior to the time such tender or
exchange offer expires (the “Expiration Time”) (prior to giving effect to such
tender offer or exchange offer);

 

OS                          =                     the number of shares of OI
Inc. Common Stock outstanding immediately after the Expiration Time (after
giving effect to the purchase of all shares accepted for purchase or exchange
in such tender or exchange offer); and

 

SP                            =                     the average of the Last
Reported Sale Prices of OI Inc. Common Stock over the ten consecutive Trading
Day period commencing on, and including, the Trading Day next succeeding the
Expiration Date.

 

Any
adjustment to the applicable Exchange Rate made pursuant to this
Section 11.04(e) shall become effective at 9:00 a.m., New York
City time, on the Trading Day next succeeding the Expiration Date.  For purposes of determining the applicable
Exchange Rate, in respect of any exchange during the 10 Trading Days commencing
on the Trading Day next succeeding the Trading Day next succeeding the
Expiration Date, references within this Section 11.04(e) to ten
Trading Days shall be deemed replaced with such lesser number of Trading Days
as have elapsed from, but not including, the Trading Day next succeeding the
Expiration Date to, but excluding, the relevant Exchange Date.  If one or more Trading Days of the Cash
Settlement Averaging Period for any Note occurs after the Expiration Date for
any Tender or Exchange Offer, but on or prior to the Trading Day next
succeeding the Expiration Date for such tender or exchange offer, such Cash Settlement
Averaging Period will be suspended on the first such Trading Day and will
resume immediately after the first Trading Day next succeeding the Expiration
Date for such tender or exchange offer and the reference in the above
definition of “SP “ to “ten” shall be deemed replaced with a reference to “one.”

 

(f)                                    Notwithstanding
the foregoing, if any adjustment to the Exchange Rate described in Section 11.04
(a) through (e), above, becomes effective and a Holder that has exchanged
its Notes:

 

(i)                                     receives shares of OI Inc.
Common Stock based on an adjusted Exchange Rate; and

 

(ii)                                  is a record
holder of such shares of OI Inc. Common Stock on the record date for the
dividend, distribution or other event giving rise to the adjustment or
otherwise participates in such dividend, distribution or other event giving
rise to the adjustment as a result of holding such shares of OI Inc. Common
Stock,

 

then, in lieu of receiving
shares of OI Inc. Common Stock at such an adjusted Exchange Rate, the Company
shall adjust the number of shares of OI Inc. Common Stock that OI Inc. will 

 

67

 

deliver to such Holder as it
determines is appropriate to reflect such Holder’s participation in the related
dividend, distribution or other event giving rise to the adjustment.

 

If
a Holder exchanges a Note, and on any Trading Day within the Cash Settlement
Averaging Period applicable to such Note any distribution or transaction
described in Section 11.04(a) through (e) above has not yet
resulted in an adjustment to the applicable Exchange Rate on the Trading Day in
question, then the Company shall adjust the amount of cash that the Company
Pays and/or the number of shares of OI Inc. Common Stock that OI Inc. delivers,
if applicable, to such Holder in respect of such Trading Day to reflect the
relevant distribution or transaction.

 

(g)                                 To the extent
permitted by law and any applicable stock exchange rules, the Company may
increase the applicable Exchange Rate by any amount for a period of at least 20
Business Days.  The Company may also (but
shall not required to), in addition to any adjustment required pursuant to Section 11.04(a),
(b), (c), (d) or (e), increase the applicable Exchange Rate to avoid or
diminish income tax to holders of OI Inc. Common Stock or rights to purchase
shares of OI Inc. Common Stock in connection with a dividend or distribution of
shares (or rights to acquire shares) or similar event.

 

(h)                                 Whenever the
Exchange Rate is adjusted as herein provided, the Company shall promptly file
with the Trustee and any Exchange Agent an Officers’ Certificate setting forth
the Exchange Rate after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. Unless and until a Responsible Officer of
the Trustee shall have received such Officers’ Certificate, the Trustee shall
not be deemed to have knowledge of any adjustment of the Exchange Rate and may
assume without inquiry that the last Exchange Rate of which it has knowledge is
still in effect. Promptly after delivery of such certificate, the Company shall
issue a press release containing the relevant information (and make such press
release available on its website). Failure to deliver such notice or make such
press release available shall not affect the legality or validity of any such
adjustment.

 

(i)                                     For purposes of
this Section 11.04, the number of shares of OI Inc. Common Stock at any
time outstanding shall not include shares held in the treasury of OI Inc. or by
its Subsidiaries so long as OI Inc. does not pay any dividend or make any
distribution on shares of OI Inc. Common Stock held in the treasury of OI Inc.
or its Subsidiaries, but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of OI Inc. Common Stock.

 

(j)                                     The Company
shall not take any action that would result in adjustment of the Exchange Rate,
pursuant to the provisions described above, in such a manner as to result in
the reduction of the Exchange Price to less than the par value per share of OI
Inc. Common Stock.

 

(k)                                  Adjustments to
the applicable Exchange Rate shall be calculated to the nearest 1/10,000th of a
share.  The Company shall not be required
to make an adjustment in the Exchange Rate unless the adjustment would require a
change of at least 1% in the Exchange Rate. 
However, the Company shall carry forward any adjustments that are less
than 1% of the Exchange Rate and make such carried forward adjustment,
regardless of whether the aggregate 

 

68

 

adjustment is less than 1%,
(i) upon any Exchange of Notes, and (ii) on each Trading Day of any
Cash Settlement Averaging Period.

 

Section 11.05                          Recapitalizations,
Reclassifications and Changes of OI Inc. Common Stock.  In the case of:

 

(i)                                     any recapitalization,
reclassification or change of OI Inc. Common Stock (other than changes
resulting from a subdivision, combination or change in par value);

 

(ii)                                  any
consolidation, merger, combination or binding share exchange involving OI Inc.;
or

 

(iii)                               any sale or
conveyance to another person of all or substantially all of the property and
assets of OI Inc. and its Subsidiaries substantially as an entirety,

 

in
each case as a result of which OI Inc. Common Stock would be converted into, or
exchanged for, common stock, other securities or other property or assets
(including cash or any combination thereof) (each, a “Reorganization Event”),
then, at the effective time of the Reorganization Event, the Company or the
Successor Company, as the case may be, shall execute with the Trustee a
supplemental indenture (which shall comply with the TIA as in force at the date
of execution of such supplemental indenture) providing that at and after such
effective time the right to exchange a Note based on OI Inc. Common Stock will,
without the consent of the Holders, be changed into a right to exchange each
$1,000 principal amount of Notes based on the kind and amount of shares of
common stock, other securities or other property or assets (including cash or
any combination thereof) that a holder of a number of shares of OI Inc. Common
Stock equal to the Exchange Rate immediately prior to such Reorganization Event
would have owned or been entitled to receive (the “Reference Property,” with
each “unit of Reference Property”  meaning the type and amount of Reference
Property that a holder of one share of OI Inc. Common Stock is entitled to
receive) upon such Reorganization Event. 
In all cases, (A) the amount otherwise payable in cash upon
exchange of the Notes pursuant to Section 11.02(b) shall continue to
be payable in cash, (B) the number of shares of OI Inc. Common Stock
otherwise deliverable upon exchange of the Notes pursuant to Section 11.02(b) will
be instead be deliverable in the amount and type of Reference Property that a
Holder of that number of shares of OI Inc. Common Stock would have received in
such transaction and (C) the Daily VWAP shall be calculated based on the
value of a unit of Reference Property that a holder of one share of OI Inc.
Common Stock would have received in such transaction;  provided, however,
that if the holders of OI Inc. Common Stock receive only cash in such
transaction, the amount deliverable upon exchange shall equal the Exchange Rate
in effect on the Exchange Date multiplied by the price paid per share of OI
Inc. Common Stock in such transaction and settlement will occur on the third
Trading Day following the Exchange Date.

 

If
the Reorganization Event causes OI Inc. Common Stock to be converted into, or
exchanged for, the right to receive more than a single type of consideration
(determined based in part upon any form of stockholder election), the Reference
Property based on which the Notes will be exchangeable will be deemed to be the
weighted average of the types and amounts of consideration received by the
holders of OI Inc. Common Stock that affirmatively make such an 

 

69

 

election
and the Company will notify Holders of the weighted average as soon as
practicable after such determination is made.

 

Any
supplemental indenture entered into pursuant to this Section 11.05 shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article XI in the
judgment of the Company’s Board of Directors or the Board of Directors of the
Successor Company.  If, in the case of
any such Reorganization Event, the Reference Property receivable thereupon by a
holder of OI Inc. Common Stock includes shares of stock, securities or other
property or assets (including cash or any combination thereof) of a Person
other than the Successor Company, as the case may be, in such Reorganization
Event, then such supplemental indenture shall also be executed by such other
Person.

 

The
Company shall cause notice of the execution of such supplemental indenture to
be mailed to each Holder, at the address of such Holder as it appears on the
Register, within 20 days after execution thereof. Failure to deliver such
notice shall not affect the legality or validity of such supplemental
indenture.

 

The
above provisions of this Section 11.05 shall similarly apply to successive
Reorganization Events.  If this Section 11.05
applies to any Reorganization Event, Section 11.04 shall not apply.

 

Section 11.06                          Certain
Covenants.  OI Inc. shall, prior to the
Company’s issuance of any Notes hereunder, and from time to time as may be
necessary, reserve out of OI Inc.’s authorized but unissued OI Inc. Common
Stock or shares of OI Inc. Common Stock held in treasury, a sufficient number
of shares of OI Inc. Common Stock, free of preemptive rights, to permit the
issuance of the maximum number of shares of OI Inc. Common Stock issuable at
such time upon exchange of the Notes and without assuming any adjustments to
the conversion rate pursuant to Section 11.04.

 

(a)                                  OI Inc. covenants that all
shares of OI Inc. Common Stock issued upon exchange of Notes will be duly and
validly issued and fully paid and non-assessable and free from all taxes, liens
and charges with respect to the issue thereof.

 

(b)                                 OI Inc. shall
endeavor promptly to comply with all federal and state securities laws
regulating the issuance and delivery of shares of OI Inc. Common Stock upon the
exchange of Notes, if any, and shall cause to have listed or quoted and shall
keep listed or quoted all such shares of OI Inc. Common Stock on each U.S.
national securities exchange or automatic quotation system or over-the-counter
or other domestic market on which the OI Inc. Common Stock is then listed or
quoted.

 

Section 11.07                          Notice to
Holders Prior to Certain Actions Except where notice is required pursuant to Section 11.01,
in case:

 

(a)                                  OI Inc. shall declare a
dividend (or any other distribution) on its OI Inc. Common Stock that would
require an adjustment in the Exchange Rate pursuant to Section 11.04; or

 

70

 

(b)                                 OI Inc. shall
authorize the granting to all or substantially all of the holders of its OI
Inc. Common Stock of rights, options or warrants to subscribe for or purchase
any share of any class or any other rights, options or warrants that would
require an adjustment in the Exchange Rate pursuant to Section 11.04; or

 

(c)                                  of any
reclassification of the OI Inc. Common Stock (other than a share split or share
combination of its outstanding OI Inc. Common Stock, or a change in par value),
or of any share exchange, consolidation or merger to which OI Inc. is a party
and for which approval of any shareholders of OI Inc. is required, or of the
conveyance, transfer, sale, lease or other disposition of all or substantially
all of the consolidated assets of OI Inc.; or

 

(d)                                 of the
voluntary or involuntary dissolution, liquidation or winding up of the Company
or OI Inc.;

 

the
Company shall cause to be filed with the Trustee and the Exchange Agent and to
be mailed to each Holder at its address appearing on the Register provided for
in Section 2.05, as promptly as possible but in any event at least 20 days
prior to the applicable date hereinafter specified, a notice stating (i) the
declaration date of the dividend or other distribution, (ii) the date on
which a record is to be taken for the purpose of such dividend, distribution or
rights, options or warrants, or, if a record is not to be taken, the date as of
which the holders of OI Inc. Common Stock of record to be entitled to such
dividend, distribution or rights are to be determined or (iii) the date on
which such reclassification, share exchange, consolidation, merger, conveyance,
transfer, sale, lease or other disposition, dissolution, liquidation or winding
up is expected to become effective or occur, and the date as of which it is
expected that holders of OI Inc. Common Stock of record shall be entitled to
exchange their OI Inc. Common Stock for Notes or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.  Failure to
give such notice, or any defect therein, shall not affect the legality or
validity of such dividend, distribution, reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up.

 

Section 11.08                          Shareholder
Rights Plans.  If the rights provided for
in any rights plan adopted by OI Inc. and in effect upon exchange of the Notes
have not separated from the shares of OI Inc. Common Stock in accordance with
the provisions of the applicable shareholder rights agreement, upon exchange of
Notes, the exchanging Holder will receive, in addition to shares of OI Inc.
Common Stock, if any, the rights under the applicable shareholder rights
agreement.  If such rights have separated
from the OI Inc. Common Stock, the applicable Exchange Rate will be adjusted as
provided in Section 11.04(c), subject to readjustment in the event of the
expiration, termination or redemption of such rights.

 

Section 11.09                          Responsibility
of Trustee.  The Trustee and any other
Exchange Agent shall not at any time be under any duty or responsibility to any
Holder of Notes to determine the Exchange Rate or whether any facts exist that
may require any adjustment (including any increase) of the Exchange Rate, or
with respect to the nature or extent or calculation of any such adjustment when
made, or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same.  The Trustee and any other Exchange Agent
shall not be accountable with respect to the validity or 

 

71

 

value
(or the kind or amount) of any shares of OI Inc. Common Stock, or of any
securities, property or cash that may at any time be issued or delivered upon
the exchange of any Note; and the Trustee and any other Exchange Agent make no
representations with respect thereto. 
Neither the Trustee nor any Exchange Agent shall be responsible for any
failure of OI Inc. to issue, transfer or deliver any shares of OI Inc. Common
Stock or stock certificates upon the surrender of any Note for the purpose of
exchange or to comply with any of the duties, responsibilities or covenants of
OI Inc. contained in this Article XI. 
Without limiting the generality of the foregoing, neither the Trustee
nor any Exchange Agent shall be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture entered
into pursuant to Section 11.05 relating either to the kind or amount of
shares of stock or securities or property (including cash) receivable by
Holders of the Notes upon the exchange of their Notes after any event referred
to in such Section 11.05 or to any adjustment to be made with respect
thereto, but, subject to the provisions of Section 9.02, may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officers’ Certificate (which the Company shall
be obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto. 
Neither the Trustee nor the Exchange Agent shall be responsible for
determining whether any event contemplated by Section 11.01 has occurred
that makes the Notes eligible for exchange or no longer eligible therefor until
the Company has delivered to the Trustee and the Exchange Agent the notices
referred to in Section 11.01 with respect to the commencement or
termination of such exchange rights, on which notices the Trustee and the
Exchange Agent may conclusively rely, and the Company agrees to deliver such
notices to the Trustee and the Exchange Agent immediately after the occurrence
of any such event or at such other times as shall be provided for in Section 11.01.

 

Section 11.10                          Certain Other
Adjustments.Whenever a provision of this Indenture requires the calculation of
Last Reported Sale Prices, Daily VWAP or functions thereof over a span of
multiple days, the Company will make appropriate adjustments to account for any
adjustment to the Exchange Rate that becomes effective, or any event requiring
an adjustment to the Exchange Rate where the Ex-Dividend Date, effective date
or Expiration Date, as the case may be, of the event occurs, at any time during
or before the period from which such prices are to be calculated.  The Trustee and Exchange Agent shall not be
requested to confirm any such calculations and shall be entitled to rely on
such calculations and be held harmless with respect thereto.

 

Article XII

 

Miscellaneous

 

Section 12.01                          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 12.02                          Notices.  (a) 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:

 

72

 

If
to the Company:

 

Owens-Brockway
Glass Container, Inc.

c/o Owens-Illinois Group, Inc. 

One O-I Plaza

One Michael Owens Way 

Perrysburg, OH 43551

Attention: Treasurer

 

Telephone:
(567) 336-5000

Facsimile:
(419) 247-7107

 

If
to OI Inc.:

 

Owens-Illinois
Group, Inc. 

One O-I Plaza

One Michael Owens Way 

Perrysburg, OH 43551

Attention: Treasurer

 

Telephone:
(567) 336-5000

Facsimile:
(419) 247-7107

 

If
to the Trustee:

 

U.S.
Bank National Association

Raymond S. Haverstock

Corporate Trust Services

EP-MN-WS3C

60 Livingston Avenue

St. Paul MN 55107-1419

Telephone:
(651) 495-3909

Facsimile:
(651) 495-1221

 

The
Company, OI Inc. or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.

 

All
notices and communications mailed to a Holder shall be mailed to the Holder at
the Holder’s address as it appears on the Register.  Notices will be deemed to have been given on
the date of such mailing. Any notice or communication to a Holder shall be
mailed by first-class mail.

 

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.

 

73

 

Section 12.03                          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, OI
Inc., the Guarantors, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).

 

Section 12.04                          Certificate and
Opinion as to Conditions Precedent.  Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:

 

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

 

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

 

Section 12.05                          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 4.05)
shall include:

 

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

 

(b)                                 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;

 

(c)                                  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

 

(d)                                 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 12.06                          When Notes
Disregarded.  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, OI Inc., any of the
Guarantors or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company, OI Inc. or any of
the Guarantors shall be disregarded and deemed not to be outstanding, except
that, for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes which the Trustee
knows are so owned shall be so disregarded. 
Subject to the foregoing, only Notes outstanding at the time shall be
considered in any such determination.

 

Section 12.07                          Rules by
Trustee, Paying Agent and Registrar.  The
Trustee as to Notes may make reasonable rules for action by or at a
meeting of Holders of Notes.  The 

 

74

 

Registrar
and any Paying Agent or Authenticating Agent may make reasonable rules and
set reasonable requirements for their functions.

 

Section 12.08                          GOVERNING
LAW.  THIS INDENTURE, THE NOTES AND THE
GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

 

Section 12.09                          No Recourse
Against Others.  A past, present or
future director, officer, employee, incorporator or stockholder, as such, of
the Company, OI Inc. or any Guarantor, if any, or any successor corporation
shall not have any liability for any obligations of the Company, OI Inc.  or any Guarantor, if any, under the Notes,
this Indenture or the Guarantees of the Notes, if any, or for any claim based
on, in respect of, or by reason of such obligations or their creation.  Each Holder by accepting a Note waives and
releases all such liability.  The waiver
and release are part of the consideration of issuance of the Notes.

 

Section 12.10                          Successors.  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 12.11                          Multiple
Originals.  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 12.12                          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 12.13                          Indenture
Controls..  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.

 

Section 12.14                          Calculations.
Except as otherwise provided in this Indenture, the Company will be responsible
for making all calculations called for under this Indenture and the Notes.  These calculations include, but are not
limited to, determinations of the Last Reported Sale Prices of OI Inc. Common
Stock, accrued interest payable on the Notes and the applicable Exchange
Rate.  The Company shall make all these
calculations in good faith and, absent manifest error, the Company’s
calculations will be final and binding on Holders.  The Company will provide a schedule of its
calculations to each of the Trustee and the Exchange Agent, and each of the
Trustee and Exchange Agent shall be entitled to rely conclusively upon the
accuracy of our calculations without independent verification.  The Trustee will forward the Company’s
calculations to any Holder upon request.

 

Section 12.15                          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.

 

75

 

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

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  OWENS-BROCKWAY
  GLASS CONTAINER INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  OWENS-ILLINOIS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  OWENS-ILLINOIS
  GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:
  Vice President, Director of Finance 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

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

76

 

	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION,

  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

77

 

 

ANNEX A

 

GUARANTORS

 

	
  Name of Entity

  	
   

  	
  Title of Officer Executing on

  Behalf of Such Entity

  
	
  ACI
  America Holdings Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  Brockway
  Realty Corporation

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  NHW
  Auburn, LLC

  	
   

  	
  Senior Vice President and Secretary of its sole member

  
	
   

  	
   

  	
   

  
	
  OI
  Auburn Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OI
  Australia Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OI
  California Containers Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OI
  Castalia STS Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OI
  General Finance Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OI
  General FTS Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  O-I
  Holding LLC

  	
   

  	
  Vice President and Secretary of its sole member

  
	
   

  	
   

  	
   

  
	
  OI
  International Holdings Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OI
  Levis Park STS Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OI
  Puerto Rico STS Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  OIB
  Produvisa Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  Owens-Brockway
  Packaging, Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  Owens-Illinois
  General Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  Owens-Illinois
  Group, Inc.

  	
   

  	
  Vice President, Director of Finance and Secretary

  
	
   

  	
   

  	
   

  
	
  SeaGate, Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  SeaGate
  II, Inc.

  	
   

  	
  Vice President and Secretary

  

 

A-1

 

	
  SeaGate
  III, Inc.

  	
   

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
  Universal
  Materials, Inc.

  	
   

  	
  Vice President and Secretary

  

 

A-2

 

 

EXHIBIT A

 

[FORM OF FACE OF NOTE]

 

[Global Notes Legend]

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
NEW YORK, NEW YORK, 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 IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS 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.

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

[Restricted Legend]

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY, EXCEPT (A) TO
OWENS-BROCKWAY GLASS CONTAINER INC., OWENS-ILLINOIS, INC. OR A SUBSIDIARY
OF OWENS-ILLINOIS, INC. (IN ADDITION TO OWENS-BROCKWAY GLASS CONTAINER
INC.); OR (B) TO A PERSON THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED UNDER RULE 144A UNDER THE SECURITIES ACT) THAT
IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER AND TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, ALL IN COMPLIANCE WITH RULE 144A (IF AVAILABLE).

 

BY ACCEPTANCE OF THIS NOTE, EACH PURCHASER AND SUBSEQUENT
TRANSFEREE OF THIS NOTE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE
REPRESENTED AND WARRANTED THAT EITHER (A) NO PORTION OF THE ASSETS USED BY
SUCH PURCHASER OR TRANSFEREE TO ACQUIRE OR HOLD THIS NOTE OR ANY INTEREST
HEREIN CONSTITUTES ASSETS OF ANY EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF
THE EMPLOYEE

 

A-1

 

RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”))
WHICH IS SUBJECT TO TITLE I OF ERISA, ANY PLAN, INDIVIDUAL RETIREMENT
ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR PROVISIONS UNDER ANY
FEDERAL, STATE, LOCAL, NON-UNITED STATES OR OTHER LAWS OR REGULATIONS THAT ARE
SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, “SIMILAR LAWS”),
OR ANY ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS”
OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT OR (B) THE ACQUISITION AND
HOLDING OF THIS NOTE OR ANY INTEREST HEREIN WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR
ANY SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.

 

A-2

 

	
  No.

  	
  $                                 

  

 

3.00% Exchangeable Senior Note due 2015

 

	
   

  	
  CUSIP
  No. 69073TAQ6

  
	
   

  	
  ISIN
  No. US69073TAQ67

  

 

Owens-Brockway
Glass Container Inc., a Delaware corporation, promises to pay to Cede &
Co., or registered assigns, the principal sum of           dollars [or such lesser amount as is
indicated in the records of the Trustee and DTC] on June 1, 2015, and to
pay interest thereon from May 7, 2010, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for,
semi-annually on June 1 and December 1 of each year, commencing December 1,
2010, at the rate of 3.00% per annum, until the principal hereof is paid or
made available for payment or exchanged. 
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Note (or one or more predecessor Notes) is registered
at 5:00 p.m., New York City time, on the Regular Record Date for such
interest, which shall be May 15 or November 15 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment
Date.  Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and will be payable to Holders on a
subsequent special record date.

 

Additional
provisions of this Note are set forth on the other side of this Note.

 

A-3

 

IN
WITNESS WHEREOF, the parties have caused this instrument to be duly executed.

 

 

	
   

  	
   

  	
  OWENS-BROCKWAY
  GLASS CONTAINER INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF

  	
   

  	
   

  	
   

  
	
   

  	
  AUTHENTICATION

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.S. BANK NATIONAL ASSOCIATION,

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  as
  Trustee, certifies that this

  	
   

  	
   

  	
   

  
	
   

  	
  is
  one of the Notes

  	
   

  	
   

  	
   

  
	
   

  	
  referred
  to in the Indenture.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  	
   

  	
   

  
						

 

*
If the Note is to be issued in global form, add the Global Notes Legend

 

A-4

 

[FORM OF REVERSE SIDE OF NOTE]

 

3.00% Exchangeable Senior Note due 2015

 

Owens-Brockway
Glass Container Inc., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being
herein called the “Company”), issued the Notes under an Indenture dated as of May
7, 2010 (the “Indenture”), among the Company, the Guarantors, Owens-Illinois, Inc.
and the Trustee.  The terms of the Notes
include those stated in the Indenture. 
Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture.  The
Notes are subject to all terms and provisions of the Indenture, and Holders are
referred to the Indenture for a statement of such terms and provisions.

 

1.  Interest

 

The
Company promises to pay interest on the principal amount of this Note at the
rate per annum shown above.  The Company
shall pay interest semiannually on June 1 and December 1 of each
year, commencing on December 1, 2010. 
Interest on the Notes shall accrue from the most recent date to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for, from May 7, 2010, until the principal hereof is
due.  Interest shall be computed on the
basis of a 360-day year of twelve 30-day months.  The Company shall pay interest on overdue
principal at the rate borne by the Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.  In addition, the Company will pay
Registration Default Additional Interest, if any, pursuant to Section 4.05
and Reporting Default Additional Interest, if any, pursuant to Section 6.13
of the Indenture.  All references herein
to “interest” shall include any Registration Default Additional Interest, if
any, and Reporting Default Additional Interest, if any.

 

If
any Interest Payment Date, the Maturity Date or any earlier required purchase
date upon a Fundamental Change of a Note falls on a day that is not a Business
Day, the required payment will be made on the next succeeding Business Day and
no interest on such payment will accrue in respect of the delay.

 

2.  Method of Payment

 

The
Company shall pay interest on the Notes (except defaulted interest) to the
Persons in whose name a Note is registered at 5:00 p.m., New York City
time, on the May 15 or November 15, as the case may be, immediately
preceding the relevant Interest Payment Date even if Notes are canceled after
the Regular Record Date and on or before the Interest Payment Date.  Holders must surrender Notes to a Paying
Agent to collect principal payments.  The
Company shall pay principal and interest in money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts.  Payments in respect of
the Notes represented by a Global Note (including principal and interest) shall
be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company or any successor depositary.  The Company will make all payments in respect
of a certificated Note (including principal and interest), at the office of the
Paying Agent, except that, at the option of the Company, payment of interest
may be made by mailing a check to the

 

A-5

 

registered
address of each Holder thereof; provided,
however, that payments on the
Notes may also be made, in the case of a Holder of at least $5,000,000
aggregate principal amount of Notes, by wire transfer to a U.S. dollar account
maintained by the payee with a bank in the United States if such Holder
elects payment by wire transfer by giving written notice to the Registrar to
such effect designating such account not later than the relevant Regular Record
Date, which application shall remain in effect until the Holder provides
written notice to the Registrar to the contrary.

 

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 or Registrar without
notice.  The Company or any of its Wholly
Owned Domestic Subsidiaries may act as Paying Agent or Registrar.

 

4.  Ranking

 

The
Notes are senior unsecured obligations of the Company.  This Note is one of the Notes referred to in
the Indenture.  The Notes are treated as
a single class of Notes under the Indenture.

 

The
Guarantors will fully and unconditionally guarantee, jointly and severally, the
Obligations on a senior basis pursuant to the terms of the Indenture.

 

5.
Merger Covenant

 

The
Indenture imposes limitations on the ability of the Company, OI Group, OI Inc.,
and the Guarantors to consolidate or merge with or into any other Person or
convey, transfer or lease all or substantially all its property.

 

6.  Sinking Fund

 

The
Notes are not subject to any sinking fund.

 

7.  Purchase of Notes at the Option of Holders
upon Fundamental Change

 

Upon
the occurrence of a Fundamental Change, each Holder has the right, at such
Holder’s option, to require the Company to purchase all of such Holder’s Notes
or any portion thereof (in principal amounts of $1,000 or multiples thereof) on
the Fundamental Change Purchase Date at a price equal to 100% of the principal
amount of the Notes such Holder elects to require the Company to purchase,
together with accrued and unpaid interest to, but excluding, the Fundamental
Change Purchase Date.

 

8.  Exchange Rights

 

Subject
to the provisions of the Indenture, the Holder hereof has the right, at its
option, during certain periods and upon the occurrence of certain conditions
specified in the Indenture and prior to 5:00 p.m., New York City time, on
the second Scheduled Trading Day

 

A-6

 

immediately
preceding the Maturity Date, to exchange any Notes or portion thereof that is
$1,000 or multiples thereof at an Exchange Rate specified in the Indenture, as
adjusted from time to time as provided in the Indenture, upon surrender of this
Note, together with an Exchange Notice as provided in the Indenture and this
Note, to the Company at the office or agency of the Company maintained for that
purpose in New York City and, unless the shares of OI Inc. Common Stock
issuable on exchange are to be issued in the same name as this Note, duly
endorsed by, or accompanied by instruments of transfer in form satisfactory to
the Company duly executed by, the Holder or by its duly authorized
attorney.  Upon exchange, the Exchange
Obligation shall be satisfied by delivery of cash by the Company and the
delivery of shares of OI Inc. Common Stock, if any, by OI Inc.  The initial Exchange Rate shall be 21.0642
shares of OI Inc. Common Stock for each $1,000 principal amount of Notes. No
fractional shares of OI Inc. Common Stock will be issued upon any exchange, but
an adjustment in cash will be paid to the Holder by OI Inc., as provided in the
Indenture, in respect of any fraction of a share that would otherwise be
issuable by OI Inc. upon the surrender of any Note or Notes for exchange.  No adjustment shall be made for dividends or
any shares issued upon exchange of such Notes except as provided in the
Indenture.

 

OI
Inc.’s only obligation in connection with a Holder’s exercise of its exchange
rights under the Indenture is to deliver the portion of the Exchange
Consideration that consists of shares of OI Inc. Common Stock.  As a result, in the case of any failure to
deliver the Exchange Consideration to an exchanging Holder upon such Holder’s
exercise of its exchange rights under the Indenture, such Holder’s only claim
with respect to OI Inc. would be for the portion of the Exchange Consideration
that consists of shares of OI Inc. Common Stock (or cash in lieu of a
fractional share of OI Inc. Common Stock), and such Holder’s only claim with
respect to the Company would be for the portion of the Exchange Consideration
that consists of cash (other than any portion that corresponds to a fractional
share of OI Inc. Common Stock).

 

9.  Denominations; Transfer; Exchange

 

The
Notes are in registered form without coupons in minimum denominations of $1,000
and whole multiples of $1,000 in excess thereof.  A Holder may transfer or exchange Notes in
accordance with the Indenture.  Upon any
transfer or exchange, the Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements or transfer documents and to
pay any taxes required by law or permitted by the Indenture.  The Registrar need not register transfers or
exchanges of Notes or portions thereof surrendered for exchange pursuant to Article XI
or any Notes tendered for purchase upon a Fundamental Change pursuant to Article III.

 

The
Notes will be resold only to “qualified institutional buyers” under Rule 144A
of the Securities Act of 1933, as amended (“QIBs”), in reliance on Rule 144A.
The Notes may thereafter be transferred only to QIBs. Notes shall be resold
pursuant to Rule 144A and shall be issued initially in the form of
Restricted Global Notes, without interest coupons and with the Global Notes
Legend and the applicable Restricted Legend as provided in the Indenture, which
shall be deposited on behalf of the purchasers of the Notes represented thereby
with the Notes Custodian and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by the Company and authenticated by
the Trustee as provided in the Indenture.

 

A-7

 

Each
Holder which exchanges Notes for OI Inc. Common Stock will be deemed to have
represented to the Company and OI Inc. that it is a QIB.

 

10.  Persons Deemed Owners

 

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

 

11.  Unclaimed Money

 

If
money for the payment of principal, interest, or any shares of OI Inc. Common
Stock or other property due in respect of exchanged Notes, if any, remains
unclaimed for two years, the Trustee and the Paying Agent shall pay the money
or any shares of OI Inc. Common Stock or other property due in respect of
exchanged Notes back to the Company or OI Inc., as the case may be, at its
written request unless an abandoned property law designates another
Person.  After any such payment, Holders
entitled to the money or any shares of OI Inc. Common Stock or other property
due in respect of exchanged Notes must look to the Company or OI Inc., as the
case may be, for payment as general creditors and the Trustee and the Paying
Agent shall have no further liability with respect to such monies.

 

12.  Discharge

 

Subject
to certain conditions, the Company and OI Inc. may satisfy and discharge its
respective obligations under the Notes and the Indenture if the Company
deposits with the Trustee, after the Notes have become due and payable, whether
at Stated Maturity or on a Fundamental Change Purchase Date or upon exchange or
otherwise, money for the payment of principal and interest, if any, on the
Notes prior to repurchase or maturity, as the case may be, and OI Inc. deposits
with the Trustee shares of OI Inc. Common Stock, if any, for delivery upon
exchange.

 

13.  Amendment, Waiver

 

Subject
to certain exceptions set forth in the Indenture, (a) the Indenture or the
Notes may be amended without prior notice to any Holder but with the written
consent of the Holders of at least a majority in aggregate principal amount of
the outstanding Notes and (b) any default may be waived with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Notes.  Without the consent
of any Holder, the Company and the Trustee may amend the Indenture or the Notes
as set forth in the Indenture.

 

14.  Defaults and Remedies

 

If
an Event of Default occurs (other than an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of the Company, OI Inc., OI
Group or any Significant Subsidiary of OI Group) and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the outstanding Notes may
declare the principal of and accrued but unpaid interest on all the Notes to be
due and payable.  If an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of the
Company, OI Inc., OI Group or any Significant Subsidiary of OI Group occurs,
the principal of and interest on all the Notes shall

 

A-8

 

become
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders.  Under
certain circumstances, the Holders of a majority in principal amount of the
outstanding Notes may rescind any such acceleration with respect to the Notes
and its consequences.

 

If
an Event of Default occurs and is continuing, the Trustee shall be under no
obligation to exercise any of the rights or powers under the Indenture at the
request or direction of any of the Holders unless such Holders have offered to
the Trustee reasonable indemnity or security against any loss, liability or
expense and certain other conditions are complied with.  Except to enforce the right to receive
payment of principal or interest when due, or the right to receive payment or
delivery of the Exchange Consideration due upon exchange, no Holder may pursue
any remedy with respect to the Indenture or the Notes unless (a) such
Holder has previously given the Trustee notice that an Event of Default is
continuing, (b) Holders of at least 25% in principal amount of the
outstanding Notes have requested the Trustee in writing to pursue the remedy,
(c) such Holders have offered the Trustee reasonable security or indemnity
against any loss, liability or expense, (d) the Trustee has not complied
with such request within 60 days after the receipt of the request and the
offer of security or indemnity and (e) the Holders of a majority in
principal amount of the outstanding Notes have not given the Trustee a
direction inconsistent with such request within such 60-day period.  Subject to certain restrictions, the Holders
of a majority in principal amount of the outstanding Notes are given the right
to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or of exercising any trust or power conferred
on the Trustee.  The Trustee, however,
may refuse to follow any direction that conflicts with law or the Indenture or
that the Trustee determines is unduly prejudicial to the rights of any other
Holder or that would involve the Trustee in personal liability.  Prior to taking any action under the
Indenture, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against all losses and expenses caused by taking or not
taking such action.

 

15.  Trustee Dealings with the Company

 

The
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Notes and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it
were not Trustee.

 

16.  No Recourse Against Others

 

A
director, officer, employee or stockholder, as such, of the Company or the
Guarantor shall not have any liability for any obligations of the Company under
the Notes or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. 
By accepting a Note, each Holder waives and releases all such liability.  The waiver and release are part of the
consideration for the issue of the Notes.

 

A-9

 

17.  Authentication

 

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

 

18.  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).

 

19.  Governing Law

 

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

 

20.  CUSIP Numbers and ISINs

 

The
Company has caused CUSIP numbers and ISINs to be printed on the Notes and has
directed the Trustee to use CUSIP numbers and ISINs in notices of 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 of Notes upon
written request and without charge to the Holder a copy of the Indenture which
has in it the text of this Note.

 

A-10

 

EXCHANGE NOTICE

 

TO:
OWENS-BROCKWAY GLASS CONTAINER INC.
         U.S. BANK NATIONAL ASSOCIATION,
as Trustee

 

The
undersigned registered owner of this Note hereby irrevocably exercises the
option to exchange this Note, or the portion thereof (which is $1,000 or a
multiple thereof) below designated in accordance with the terms of the
Indenture referred to in this Note, and directs that the cash deliverable by
the Company and shares of OI Inc. Common Stock, if any, deliverable by OI Inc.
upon such exchange and any Notes representing any unexchanged principal amount
hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. 
Capitalized terms used herein but not defined shall have the meanings
ascribed to such terms in the Indenture. 
If shares or any portion of this Note not exchanged are to be issued in
the name of a person other than the undersigned, the undersigned will provide
the appropriate information below and pay all transfer taxes payable with
respect thereto.  Any amount required to
be paid by the undersigned on account of interest accompanies this Note.

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  

 

Signature(s) must
be guaranteed by an “eligible guarantor institution” meeting the requirements
of the Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program (“STAMP”) or such other “signature
guarantee program” as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended.

 

	
   

  	
   

  	
   

  
	
   

  	
  Signature
  Guarantee

  

 

A-11

 

Fill
in the registration of shares of OI Inc. Common Stock, if any, to be issued by
OI Inc., and Notes if to be delivered, and the person to whom cash delivered by
the Company, and payment for fractional shares is to be made, if to be made by
OI Inc., other than to and in the name of the registered holder:

 

	
  Please print name and
  address

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Street Address)

  	
   

  
	
   

  	
   

  
	
  (City, State and Zip Code)

  	
   

  
	
   

  	
   

  
	
  Principal amount to be
  exchanged

  	
   

  
	
  (if less than all):

  	
   

  
	
   

  	
   

  
	
  $

  	
   

  	
   

  
	
   

  	
   

  
	
  Social
  Security or Other Taxpayer Identification Number:

  
	
   

  	
   

  
	
   

  	
   

  
			

 

NOTICE:
The signature on this Exchange Notice must correspond with the name as written
upon the face of the Notes in every particular without alteration or
enlargement or any change whatsoever.

 

A-12

 

FUNDAMENTAL CHANGE PURCHASE NOTICE

 

TO:
OWENS-BROCKWAY GLASS CONTAINER INC.
         U.S. BANK NATIONAL ASSOCIATION,
as Trustee

 

The
undersigned registered owner of this Note hereby irrevocably acknowledges
receipt of a notice from Owens-Brockway Glass Container Inc. (the “Company”)
regarding the right of holders to elect to require the Company to purchase the
Notes and requests and instructs the Company to repay the entire principal
amount of this Note, or the portion thereof (which is $1,000 or an integral
multiple thereof) below designated, in accordance with the terms of the
Indenture at the price of 100% of such entire principal amount or portion
thereof, together with accrued and unpaid interest to, but excluding, the
Fundamental Change Purchase Date to the registered holder hereof.  Capitalized terms used herein but not defined
shall have the meanings ascribed to such terms in the Indenture.  The Notes shall be purchased by the Company
as of the Fundamental Change Purchase Date pursuant to the terms and conditions
specified in the Indenture.

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature(s):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
							

 

NOTICE:
The above signatures of the holder(s) hereof must correspond with the name
as written upon the face of the Notes in every particular without alteration or
enlargement or any change whatsoever.

 

	
  Notes Certificate Number
  (if applicable):

  	
   

  	
   

  
	
   

  
	
  Principal amount to be
  purchased (if less than all, must be $1,000 or integral multiples thereof):

  	
   

  
	
   

  	
   

  
	
   

  
	
  Social Security or Other
  Taxpayer Identification Number:

  	
   

  	
   

  
					

 

A-13

 

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                           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 other side of this Note.

  
							

 

A-14

 

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF RESTRICTED
NOTES

 

This
certificate relates to $               principal
amount of Notes held in (check applicable space)         book-entry
or          definitive form
by the undersigned.

 

The
undersigned (check one box below):

 

o                                    has requested
the Trustee by written order to deliver in exchange for its beneficial interest
in the Global Note held by the Depositary a Note or Notes in definitive,
registered form of authorized denominations and an aggregate principal amount
equal to its beneficial interest in such Global Note (or the portion thereof
indicated above);

 

o                                    has requested
the Trustee by written order to exchange or register the transfer of a Note or
Notes.

 

The
undersigned confirms that such Notes are being transferred in accordance with
its terms:

 

CHECK
ONE BOX BELOW

 

(1)                                  o                                    to the Company
or OI Inc. or one of its other Subsidiaries; or

 

(2)                                  o                                    to a person you
reasonably believe is a “qualified institutional buyer” (as defined in
Rule 144A under the Securities Act of 1933) that is purchasing for its own
account or for the account of another “qualified institutional buyer” and to
whom notice is given that such transfer is being made in reliance on Rule 144A,
in each case pursuant to and in compliance with Rule 144A under the
Securities Act of 1933.

 

Unless
one of the boxes is checked, the Trustee will refuse to register any of the
Notes evidenced by this certificate in the name of any Person other than the
registered Holder thereof.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Your
  Signature

  
	
   

  	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
  Signature
  must be guaranteed by a participant in a recognized signature guaranty medallion
  program or other signature guarantor acceptable to the Trustee

  	
   

  	
  Signature
  of Signature Guarantee

  
				

 

A-15

 

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.

 

The
undersigned represents and warrants that it is purchasing this Note for its own
account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a “qualified institutional buyer”
within the meaning of Rule 144A under the Securities Act of 1933, and is
aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned’s foregoing representations in order to claim the
exemption from registration provided by Rule 144A.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE:  To be executed by an executive officer

  

 

A-16

 

 

EXHIBIT B

 

FORM OF RESTRICTED LEGEND FOR OI INC. 

COMMON STOCK ISSUED UPON EXCHANGE

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘SECURITIES ACT’’), AND ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY, EXCEPT (A) TO
OWENS-ILLINOIS, INC. OR A SUBSIDIARY OF OWENS-ILLINOIS, INC.; (B) UNDER
A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT; (C) TO A PERSON THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A ADOPTED UNDER THE SECURITIES ACT)
THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER AND TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, ALL IN COMPLIANCE WITH RULE 144A (IF AVAILABLE); OR (D) UNDER
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT; AND (2) THAT IT WILL, PRIOR TO ANY TRANSFER OF THIS
SECURITY IN ACCORDANCE WITH (1)(D), FURNISH TO THE TRANSFER AGENT AND
OWENS-ILLINOIS, INC. SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS MAY BE REQUIRED TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
IN ACCORDANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

 

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

 

B-1

 

ASSIGNMENT FORM

 

To
assign this Security, fill in the form below:

 

I
or we assign and transfer this Security to

 

(Print
or type assignee’s name, address and zip code)

 

(Insert
assignee’s soc. sec. or tax I.D. No.)

 

and
irrevocably
appoint                           agent
to transfer this Security 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 other side of this Security.

  
							

 

B-2

 

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF SHARES OF
RESTRICTED OI INC. COMMON STOCK

 

This
certificate relates to               shares
of common stock, par value $0.01 per share, of Owens-Illinois, Inc. (the “Securities”)
held in (check applicable space)          book-entry
or            definitive
form by the undersigned.

 

The
undersigned (check one box below):

 

o                                    has requested
the Transfer Agent by written order to deliver in exchange for its beneficial
interest in the Securities held by the Depositary Securities in definitive,
registered form of authorized shares in an equal number to the Securities (or the
portion thereof indicated above);

 

o                                    has requested
the Transfer Agent by written order to exchange or register the transfer of
Securities.

 

The
undersigned confirms that such Securities are being transferred in accordance
with its terms:

 

CHECK
ONE BOX BELOW

 

(1)                                  o                                    to the Company
or OI Inc. or one of its other Subsidiaries; or

 

(2)                                  o                                    pursuant to an
effective registration statement under the Securities Act of 1933;

 

(3)                                  o                                    to a person you
reasonably believe is a “qualified institutional buyer” (as defined in
Rule 144A under the Securities Act of 1933) that is purchasing for its own
account or for the account of another “qualified institutional buyer” and to
whom notice is given that such transfer is being made in reliance on Rule 144A,
in each case pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or

 

(4)                                  o                                    pursuant to
another available exemption from the registration requirements under the
Securities Act.

 

Unless
one of the boxes is checked, the Transfer Agent will refuse to register any of
the Securities evidenced by this certificate in the name of any Person other
than the registered Holder thereof; provided,
however, that if box (4) is
checked, the transfer agent may require, prior to registering any such transfer
of the shares of OI Inc. Common Stock, such legal opinions, certifications and
other information OI Inc. has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Your
  Signature

  

 

B-3

 

	
  Signature
  Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
  Signature
  must be guaranteed by a participant in a recognized signature guaranty medallion
  program or other signature guarantor acceptable to the Transfer Agent

  	
   

  	
  Signature
  of Signature Guarantee

  
				

 

TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.

 

The
undersigned represents and warrants that it is purchasing the Securities for
its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a “qualified
institutional buyer” within the meaning of Rule 144A under the Securities
Act of 1933, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding
OI Inc. as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned’s foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE:  To be executed by an executive officer

  

 

B-4

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