Document:

EX-4.9

 

EXHIBIT 4.9

 

CAPITAL SECURITIES GUARANTEE AGREEMENT

PNC Capital Trust [E] [F] [G] [H]

Dated as of                     , 20___

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I DEFINITIONS AND INTERPRETATION

	 
	 	 	 	 
	SECTION 1.1
	 	Definitions and Interpretation	 	1
	 
	 	 	 	 
	ARTICLE II TRUST INDENTURE ACT

	 
	 	 	 	 
	SECTION 2.1
	 	Trust Indenture Act; Application 	 	4
	SECTION 2.2
	 	Lists of Holders of Securities 	 	4
	SECTION 2.3
	 	Reports by the Capital Guarantee Trustee 	 	5
	SECTION 2.4
	 	Periodic Reports to Capital Guarantee Trustee 	 	5
	SECTION 2.5
	 	Evidence of Compliance with Conditions Precedent 	 	5
	SECTION 2.6
	 	Events of Default; Waiver 	 	5
	SECTION 2.7
	 	Event of Default; Notice 	 	5
	SECTION 2.8
	 	Conflicting Interests 	 	6
	 
	 	 	 	 
	ARTICLE III POWERS, DUTIES AND RIGHTS OF CAPITAL GUARANTEE TRUSTEE

	 
	 	 	 	 
	SECTION 3.1
	 	Powers and Duties of the Capital Guarantee Trustee 	 	6
	SECTION 3.2
	 	Certain Rights of Capital Guarantee Trustee 	 	7
	SECTION 3.3
	 	Not Responsible for Recitals or Issuance of Guarantee 	 	9
	 
	 	 	 	 
	ARTICLE IV CAPITAL GUARANTEE TRUSTEE

	 
	 	 	 	 
	SECTION 4.1
	 	Capital Guarantee Trustee; Eligibility 	 	9
	SECTION 4.2
	 	Resignation and Removal; Appointment of Successor 	 	10
	SECTION 4.3
	 	Acceptance of Appointment by Successor 	 	11
	SECTION 4.4
	 	Merger, Conversion, Consolidation or Succession to Business 	 	11
	 
	 	 	 	 
	ARTICLE V GUARANTEE

	 
	 	 	 	 
	SECTION 5.1
	 	Guarantee 	 	12
	SECTION 5.2
	 	Waiver of Notice and Demand 	 	12
	SECTION 5.3
	 	Obligations Not Affected 	 	12
	SECTION 5.4
	 	Rights of Holders 	 	13
	SECTION 5.5
	 	Guarantee of Payment 	 	13
	SECTION 5.6
	 	Subrogation 	 	13
	SECTION 5.7
	 	Independent Obligations 	 	14
	 
	 	 	 	 
	ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION

	 
	 	 	 	 
	SECTION 6.1
	 	Limitation of Transactions 	 	14
	SECTION 6.2
	 	Subordination 	 	14
	SECTION 6.3
	 	Pari Passu Guarantees 	 	14
	 
	 	 	 	 
	ARTICLE VII TERMINATION

	 
	 	 	 	 
	SECTION 7.1
	 	Termination	 	15

ii

 

	 
	 	 	 	 	 	Page	 
	ARTICLE VIII COMPENSATION AND INDEMNIFICATION

	 
	 	 	 	 	 	 
	SECTION 8.1

	 	Exculpation
	 	 	15	 
	SECTION 8.2

	 	Compensation, Reimbursement and Indemnification
	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE IX MISCELLANEOUS

	 
	 	 	 	 	 	 
	SECTION 9.1

	 	Successors and Assigns
	 	 	16	 
	SECTION 9.2

	 	Amendments
	 	 	16	 
	SECTION 9.3

	 	Notices
	 	 	17	 
	SECTION 9.4

	 	Benefit
	 	 	17	 
	SECTION 9.5

	 	Separability Clause
	 	 	17	 
	SECTION 9.6

	 	Governing Law
	 	 	17	 

iii

 

CAPITAL SECURITIES GUARANTEE AGREEMENT

     This GUARANTEE AGREEMENT (the “Capital Securities Guarantee”), dated as of ___,
20___, is executed and delivered by The PNC Financial Services Group, Inc., a Pennsylvania
corporation, and The Bank of New York, as trustee, for the benefit of the Holders (as defined
herein) from time to time of the Capital Securities (as defined herein) of PNC Capital Trust [E]
[F] [G] [H], a Delaware statutory trust (the “Issuer”).

     WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the “Declaration”), dated
as of ___, 20___, among the trustees of the Issuer named therein, the Guarantor, as
sponsor, and the holders from time to time of undivided beneficial interests in the assets of the
Issuer, the Issuer is issuing on the date hereof ___ capital securities, having an
aggregate liquidation amount of $___, designated the ___% Capital Securities
(the “Capital Securities”);

     WHEREAS, as incentive for the Holders to purchase the Capital Securities, the Guarantor
desires irrevocably and unconditionally to agree, to the extent set forth in this Capital
Securities Guarantee, to pay to the Holders the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the purchase by each Holder of Capital Securities, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Capital Securities Guarantee for the benefit of the Holders.

ARTICLE I

DEFINITIONS AND INTERPRETATION

SECTION 1.1 Definitions and Interpretation

     In this Capital Securities Guarantee, unless the context otherwise requires:

     (a) Capitalized terms used in this Capital Securities Guarantee but not defined in the
preamble above have the respective meanings assigned to them in this Section 1.1;

     (b) a term defined anywhere in this Capital Securities Guarantee has the same meaning
throughout;

     (c) all references to “the Capital Securities Guarantee” or “this Capital Securities
Guarantee” are to this Capital Securities Guarantee as modified, supplemented or amended
from time to time;

     (d) all references in this Capital Securities Guarantee to Articles and Sections are
to Articles and Sections of this Capital Securities Guarantee, unless otherwise specified;

     (e) a term defined in the Trust Indenture Act has the same meaning when used in this
Capital Securities Guarantee, unless otherwise defined in this Capital Securities Guarantee
or unless the context otherwise requires; and

     (f) a reference to the singular includes the plural and vice versa.

1

 

     “Act” by any Holder means any instrument or instruments (and the action embodied therein and
evidenced thereby) embodying or evidencing any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by the Indenture to be given or taken by
Holders signed by such Holders in person or by an agent duly appointed in writing. Proof of
execution of any such instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Guarantee and (subject to Section 3.1) conclusive in favor of the Capital
Guarantee Trustee and the Guarantor, if made in the manner provided in Section 1.4 of the
Indenture.

     “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” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

     “Board of Directors” shall mean the board of directors of the Guarantor.

     “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Guarantor to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and delivered to the Capital Guarantee Trustee.

     “Business Day” means any day other than a Saturday, Sunday or any other day on which banking
institutions in the Borough of Manhattan City of New York, New York, the City of Pittsburgh,
Pennsylvania or the Commonwealth of Pennsylvania are authorized or obligated by any applicable law,
regulation or executive order to close.

     “Capital Guarantee Trustee” means The Bank of New York until a successor Capital Guarantee
Trustee shall have become such pursuant to the applicable provisions of this Capital Securities
Guarantee, solely in its capacity as capital guarantee trustee and not in its individual capacity
and thereafter “Capital Guarantee Trustee” shall mean or include each Person who is then a Capital
Guarantee Trustee hereunder, and if at any time there is more than one such Person, “Capital
Guarantee Trustee” as used with respect to the Capital Securities of any series shall mean the
Capital Guarantee Trustee with respect to Capital Securities of that series.

     “Common Securities” means the securities representing common undivided beneficial interests in
the assets of the Issuer.

     “Corporate Trust Office” means the office of the Capital Guarantee Trustee at which the
corporate trust business of the Capital Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution of this Agreement is located at 101
Barclay Street, Floor 8 West, New York, New York 10286.

     “Covered Person” means any Holder or beneficial owner of Capital Securities.

     “Debentures” means the series of junior subordinated debt securities of the Guarantor
designated the ___% Junior Subordinated Deferrable Interest Debentures due ___, 20___ held by
the Institutional Trustee (as defined in the Declaration) of the Issuer.

     “Distribution” has the meaning set forth in the Declaration.

2

 

     “Event of Default” means a default by the Guarantor on any of its payment or other obligations
under this Capital Securities Guarantee.

     “Guarantee Payments” means the following payments or distributions, without duplication, with
respect to the Capital Securities, to the extent not paid or made by the Issuer: (i) any accrued
and unpaid Distributions (as defined in Annex I to the Declaration) that are required to be paid on
the Capital Securities, to the extent the Issuer has funds available therefor, (ii) the applicable
redemption price of per Capital Security (as described in Annex I to the Declaration), plus all
accrued and unpaid Distributions to the date of redemption (the “Redemption Price”), to the extent
that the Issuer has funds available therefor, with respect to any Capital Securities called for
redemption by the Issuer and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Issuer (other than in connection with the distribution of Debentures to the
Holders in exchange for Capital Securities as provided in the Declaration or the redemption of all
of the Capital Securities upon the maturity or redemption of all of the Debentures as provided in
the Declaration) the lesser of (a) the aggregate of the liquidation amount of $  per Capital
Security and all accrued and unpaid Distributions on the Capital Securities to the date of payment,
or (b) the amount of assets of the Issuer remaining for distribution to Holders in liquidation of
the Issuer (in either case, the “Liquidation Distribution”).

     “Guarantor” means The PNC Financial Services Group, Inc. until a successor Person shall have
become such pursuant to the applicable provisions of this Capital Securities Guarantee, and
thereafter “Guarantor” shall mean such successor Person.

     “Holder” shall mean any holder, as registered on the books and records of the Issuer, of any
Capital Securities; provided, however, that, in determining whether the holders of the requisite
percentage of Capital Securities have given any request, notice, consent or waiver hereunder,
“Holder” shall not include the Guarantor or any Affiliate of the Guarantor.

     “Indemnified Person” means the Capital Guarantee Trustee, any Affiliate of the Capital
Guarantee Trustee, or any officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Capital Guarantee Trustee.

     “Indenture” means the Indenture dated as of ___, 20___, between the Guarantor and The Bank
of New York, as trustee, and any indenture supplemental thereto, pursuant to which the Debentures
are to be issued to the Institutional Trustee of the Issuer.

     “Institutional Trustee” has the meaning set forth in the Declaration.

     “Majority in liquidation amount of the Capital Securities” means, except as provided by the
Trust Indenture Act, a vote by Holder(s), voting separately as a class, holding Capital Securities
representing more than 50% of the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid Distributions to the
date upon which the voting percentages are determined) of all Capital Securities.

     “Officers’ Certificate” means a certificate signed by the Chairman or any Vice Chairman of the
Board of Directors, President or a Vice President, and by its Treasurer, an Assistant Treasurer,
Controller, an Assistant Controller, Secretary or an Assistant Secretary, of the Guarantor, and
delivered to the Capital Guarantee Trustee. Any Officers’ Certificate delivered with respect to
compliance with a condition or covenant provided for in this Capital Securities Guarantee shall
include:

     (a) a statement that each officer signing the Officers’ Certificate has read the
covenant or condition and the definitions relating thereto;

3

 

     (b) a brief statement of the nature and scope of the examination or investigation upon
which the statements or opinions contained in such Officers’ Certificate are based;

     (c) a statement that each such officer has made such examination or investigation as,
in such officer’s opinion, is necessary to enable such officer 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, in the opinion of each such officer, such condition or
covenant has been complied with.

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

     “Responsible Officer” means, with respect to the Capital Guarantee Trustee, any officer within
the Corporate Trust Office of the Capital Guarantee Trustee with direct responsibility for the
administration of this Capital Securities Guarantee and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred because of that officer’s
knowledge of and familiarity with the particular subject.

     “Security Register” means the register maintained in accordance with Section 3.5 of the
Indenture.

     “Trust Indenture Act” means the Trust Indenture Act of 1939, as in force at the date as of
which this instrument was executed; provided that in the event the Trust Indenture Act is amended
after such date, Trust Indenture Act means, to the extent required by any such amendment, the Trust
Indenture Act as so amended.

     “Underwriting Agreement” has the meaning set forth in the Indenture.

ARTICLE II

TRUST INDENTURE ACT

SECTION 2.1 Trust Indenture Act; Application

     (a) This Capital Securities Guarantee is subject to the provisions of the Trust Indenture Act
that are required or deemed to be part of this Capital Securities Guarantee and shall, to the
extent applicable, be governed by such provisions; and

     (b) if and to the extent that any provision of this Capital Securities Guarantee limits,
qualifies or conflicts with the duties deemed imposed by Section 310 to 317, inclusive, of the
Trust Indenture Act, such deemed imposed duties shall control.

SECTION 2.2 Lists of Holders of Securities

     (a) The Guarantor shall provide the Capital Guarantee Trustee with a list, in such form as
the Capital Guarantee Trustee may reasonably require, of the names and addresses of the Holders
(“List of Holders”) as of such date, (i) within one Business Day after January 1 and June 30 of
each year, and (ii) at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List of Holders is
given to the Capital Guarantee Trustee; provided, that the Guarantor shall not be obligated to
provide such List of Holders at any time the List of

4

 

Holders does not differ from the most recent List of Holders given to the Capital Guarantee
Trustee by the Guarantor. The Capital Guarantee Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.

     (b) The Capital Guarantee Trustee shall comply with its obligations under, and shall be
entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.

SECTION 2.3 Reports by the Capital Guarantee Trustee

     Within 60 days after May 15 of each year (commencing May 15, 20___), the Capital Guarantee
Trustee shall provide to the Holders such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust Indenture
Act. The Capital Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.

SECTION 2.4 Periodic Reports to Capital Guarantee Trustee

     The Guarantor shall provide to the Capital Guarantee Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in the manner and at
the times required by Section 314 of the Trust Indenture Act.

SECTION 2.5 Evidence of Compliance with Conditions Precedent

     The Guarantor shall provide to the Capital Guarantee Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Capital Securities Guarantee that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in the form
of an Officers’ Certificate.

SECTION 2.6 Events of Default; Waiver

     The Holders of a Majority in liquidation amount of Capital Securities may, by vote, on behalf
of the Holders of all of the Capital Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose of this Capital
Securities Guarantee, but no such waiver shall extend to any subsequent or other default or Event
of Default or impair any right consequent thereon.

SECTION 2.7 Event of Default; Notice

     (a) The Capital Guarantee Trustee shall, within 90 days after the occurrence of an Event of
Default, transmit by mail, first class postage prepaid, to the Holders, notices of all Events of
Default actually known to a Responsible Officer as being an Event of Default hereunder, unless such
defaults have been cured before the giving of such notice; provided, that the Capital Guarantee
Trustee shall be protected in withholding such notice if and so long as a Responsible Officer in
good faith determines that the withholding of such notice is in the interests of the Holders.

     (b) The Capital Guarantee Trustee shall not be deemed to have knowledge of any Event of
Default unless either the Capital Guarantee Trustee shall have received written notice thereof, or
a Responsible Officer charged with the administration of the Declaration shall have obtained actual
knowledge.

5

 

SECTION 2.8 Conflicting Interests

     The Declaration shall be deemed to be specifically described in this Capital Securities
Guarantee for the purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.

ARTICLE III

POWERS, DUTIES AND RIGHTS OF

CAPITAL GUARANTEE TRUSTEE

SECTION 3.1 Powers and Duties of the Capital Guarantee Trustee

     (a) This Capital Securities Guarantee shall be held by the Capital Guarantee Trustee for the
benefit of the Holders, and the Capital Guarantee Trustee shall not transfer its right, title and
interest in this Capital Securities Guarantee to any Person except a Holder exercising his or her
rights pursuant to Section 5.4(b) or to a successor Capital Guarantee Trustee on acceptance by such
successor Capital Guarantee Trustee of its appointment to act as successor Capital Guarantee
Trustee. The right, title and interest of the Capital Guarantee Trustee shall automatically vest
in any successor Capital Guarantee Trustee, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and delivered pursuant to the
appointment of such successor Capital Guarantee Trustee.

     (b) If an Event of Default actually known to a Responsible Officer as an Event of Default has
occurred and is continuing, the Capital Guarantee Trustee shall enforce this Capital Securities
Guarantee for the benefit of the Holders of the Capital Securities.

     (c) The Capital Guarantee Trustee, before the occurrence of any Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Capital Securities Guarantee, and no implied covenants
shall be read into this Capital Securities Guarantee against the Capital Guarantee Trustee. In case
an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to a Responsible Officer, the Capital Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Capital Securities Guarantee, and use the same degree of
care and skill in its exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.

     (d) No provision of this Capital Securities Guarantee shall be construed to relieve the
Capital Guarantee Trustee from liability for its own negligent action, its own negligent failure to
act or its own willful misconduct, except that:

     (i) Prior to the occurrence of any Event of Default and after the curing or waiving of
all such Events of Default that may have occurred:

     (A) the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Capital Securities Guarantee, and no implied
covenants or obligations shall be read into this Capital Securities Guarantee
against the Capital Guarantee Trustee; and

     (B) in the absence of bad faith on the part of the Capital Guarantee Trustee,
the Capital Guarantee Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Capital Guarantee Trustee and conforming
to the requirements of this Capital Securities Guarantee; but in the case of any
such certificates or opinions that by any

6

 

provision hereof are specifically required to be furnished to the Capital
Guarantee Trustee, the Capital Guarantee Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements of this
Capital Securities Guarantee;

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

     (iii) the Capital Guarantee Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the direction of the
Holders of not less than a Majority in liquidation amount of the Capital Securities relating
to the time, method and place of conducting any proceeding for any remedy available to the
Capital Guarantee Trustee, or exercising any trust or power conferred upon the Capital
Guarantee Trustee under this Capital Securities Guarantee;

     (iv) no provision of this Capital Securities Guarantee shall require the Capital
Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of its rights or
powers, if the Capital Guarantee Trustee shall have reasonable grounds for believing that
the repayment of such funds or protection from liability is not reasonably assured to it
under the terms of this Capital Securities Guarantee or indemnity, reasonably satisfactory
to the Capital Guarantee Trustee, against such risk or liability is not reasonably assured
to it; and

     (v) whether or not therein expressly so provided, every provision of this Capital
Securities Guarantee relating to the conduct or affecting the liability of or affording
protection to the Capital Guarantee Trustee shall be subject to the provisions of this
Section.

SECTION 3.2 Certain Rights of Capital Guarantee Trustee

     (a) Subject to the provisions of Section 3.1:

     (i) The Capital Guarantee Trustee may conclusively rely, and shall be fully protected
in acting or refraining from acting upon, any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties.

     (ii) Any direction of the Guarantor mentioned herein shall be sufficiently evidenced
by an Officers’ Certificate.

     (iii) Whenever, in the administration of this Capital Securities Guarantee, the
Capital Guarantee Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Capital Guarantee Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of bad faith
on its part, request and conclusively rely upon an Officers’ Certificate which, upon receipt
of such request, shall be promptly delivered by the Guarantor.

     (iv) The Capital Guarantee Trustee shall have no duty to see to any recording, filing
or registration of any instrument (including any financing or continuation statement or any
filing under tax or securities laws) (or any rerecording, refiling or reregistration
thereof).

7

 

     (v) The Capital Guarantee Trustee may consult with counsel of its choice or other
experts, and the advice or opinion of such counsel or experts with respect to legal matters
or advice within the scope of such experts’ area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include any of its employees. The
Capital Guarantee Trustee shall have the right at any time to seek instructions concerning
the administration of this Capital Securities Guarantee from any court of competent
jurisdiction.

     (vi) The Capital Guarantee Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Capital Securities Guarantee at the request or
direction of any Holder, unless such Holder shall have provided to the Capital Guarantee
Trustee such security and indemnity reasonably satisfactory to the Capital Guarantee Trustee
against the reasonable costs, disbursements, advances and expenses (including reasonable
attorneys’ fees and expenses and the reasonable expenses of the Capital Guarantee Trustee’s
agents, counsel, accountants and experts) and liabilities that might be incurred by the
Capital Guarantee Trustee (or its agents, counsel, accountants and experts) in complying
with such request or direction, including such reasonable advances as may be requested by
the Capital Guarantee Trustee; provided that, nothing contained in this Section 3.2(a)(vi)
shall be taken to relieve the Capital Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in it by this Capital
Securities Guarantee.

     (vii) The Capital Guarantee Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Capital Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Capital Guarantee Trustee shall determine to make such inquiry or
investigation, it shall be entitled to examine the books, records and premises of the
Guarantor, personally or by agent or attorney.

     (viii) The Capital Guarantee Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents, nominees,
custodians or attorneys, and the Capital Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with due care by it
hereunder.

     (ix) Any action taken by the Capital Guarantee Trustee or its agents hereunder shall
bind the Holders of the Capital Securities, and the signature of the Capital Guarantee
Trustee or its agents alone shall be sufficient and effective to perform any such action.
No third party shall be required to inquire as to the authority of the Capital Guarantee
Trustee to so act or as to its compliance with any of the terms and provisions of this
Capital Securities Guarantee, both of which shall be conclusively evidenced by the Capital
Guarantee Trustee’s or its agent’s taking such action.

     (x) Whenever in the administration of this Capital Securities Guarantee the Capital
Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing
any remedy or right or taking any other action hereunder, the Capital Guarantee Trustee (i)
may request instructions from the Holders of a Majority in liquidation amount of the Capital
Securities, (ii) may refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in conclusively relying
on or acting in accordance with such instructions.

8

 

     (xi) The Capital Guarantee Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it and believed by it to be authorized or within its rights or
powers if such actions or omissions by the Capital Guarantee Trustee do not constitute
negligence.

     (b) No provision of this Capital Securities Guarantee shall be deemed to impose any duty or
obligation on the Capital Guarantee Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Capital Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority available to the Capital Guarantee
Trustee shall be construed to be a duty.

SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee

     The recitals contained in this Guarantee shall be taken as the statements of the Guarantor,
and the Capital Guarantee Trustee does not assume any responsibility for their correctness. The
Capital Guarantee Trustee makes no representation as to the validity or sufficiency of this Capital
Securities Guarantee; it shall not be responsible for the Guarantor’s performance hereunder or the
Guarantor’s representations and warranties.

ARTICLE IV

CAPITAL GUARANTEE TRUSTEE

SECTION 4.1 Capital Guarantee Trustee; Eligibility

     (a) There shall at all times be a Capital Guarantee Trustee which shall:

     (i) not be an Affiliate of the Guarantor; and

     (ii) be a Person organized and doing business under the laws of the United States of
America or any State or Territory thereof or of the District of Columbia, or a corporation
or Person permitted by the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), the combined capital
and surplus of such corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.

     (b) If at any time the Capital Guarantee Trustee shall cease to be eligible to so act under
Section 4.1(a), the Capital Guarantee Trustee shall immediately resign in the manner and with the
effect set out in Section 4.2.

     (c) If the Capital Guarantee Trustee has or shall acquire any “conflicting interest” within
the meaning of Section 310(b) of the Trust Indenture Act, the Capital Guarantee Trustee and
Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.

9

 

SECTION 4.2 Resignation and Removal; Appointment of Successor

     (a) No resignation or removal of the Capital Guarantee Trustee and no appointment of a
successor Capital Guarantee Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Capital Guarantee Trustee in accordance with the
applicable requirements of Section 4.3.

     (b) The Capital Guarantee Trustee may resign at any time by giving written notice thereof to
the Guarantor. If the instrument of acceptance by a successor Capital Guarantee Trustee required
by Section 4.3 shall not have been delivered to the Capital Guarantee Trustee within 30 days after
the giving of such notice of resignation, the resigning Capital Guarantee Trustee may petition any
court of competent jurisdiction for the appointment of a successor Capital Guarantee Trustee.

     (c) The Capital Guarantee Trustee may be removed at any time by Act of the Holders of a
Majority in liquidation amount of the Capital Securities delivered to the Capital Guarantee Trustee
and to the Guarantor.

     (d) If at any time:

     (i) the Capital Guarantee Trustee shall fail to comply with Section 4.1(c) (relating to
Section 310(b) of the Trust Indenture Act) after written request therefor by the Guarantor
or by any Holder who has been a bona fide Holder of a Capital Security for at least six
months, or

     (ii) the Capital Guarantee Trustee shall cease to be eligible under Section 4.1(a) and
shall fail to resign after written request therefor by the Guarantor or by any such Holder,
or

     (iii) the Capital Guarantee Trustee shall become incapable of acting or shall be
adjudged bankrupt or insolvent or a receiver of the Capital Guarantee Trustee or of its
property shall be appointed or any public officer shall take charge or control of the
Capital Guarantee Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (i) the Guarantor, by a Board
Resolution, may remove the Capital Guarantee Trustee or (ii) subject to Section 5.8 of the
Indenture (regarding costs and attorneys’ fees in legal proceedings), any Holder who has
been a bona fide Holder of a Capital Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent jurisdiction for
the removal of the Capital Guarantee Trustee and the appointment of a successor Capital
Guarantee Trustee.

     (e) If the Capital Guarantee Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Capital Guarantee Trustee for any cause, the
Guarantor, by a Board Resolution, shall promptly appoint a successor Capital Guarantee Trustee and
shall comply with the applicable requirements of Section 4.3. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a successor Capital
Guarantee Trustee shall be appointed by Act of the Holders of a Majority in liquidation amount of
the Capital Securities delivered to the Guarantor and the retiring Capital Guarantee Trustee, the
successor Capital Guarantee Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 4.3, become the successor
Capital Guarantee Trustee and to that extent supersede the successor Capital Guarantee Trustee
appointed by the Guarantor. If no successor Capital Guarantee Trustee shall have been so appointed
by the Guarantor or the Holders and accepted appointment in the manner required by Section 4.3, any
Holder who has been a bona fide Holder of a Capital Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Capital Guarantee Trustee.

10

 

     (f) The Guarantor shall give notice of each resignation and each removal of the Capital
Guarantee Trustee and each appointment of a successor Capital Guarantee Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to all Holders of Capital Securities.
Each notice shall include the name of the successor Capital Guarantee Trustee and the address of
its Corporate Trust Office.

SECTION 4.3 Acceptance of Appointment by Successor

     (a) In case of the appointment hereunder of a successor Capital Guarantee Trustee, every such
successor Capital Guarantee Trustee so appointed shall execute, acknowledge and deliver to the
Guarantor and to the retiring Capital Guarantee Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Capital Guarantee Trustee shall become
effective and such successor Capital Guarantee Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring
Capital Guarantee Trustee; but, on the request of the Guarantor or the successor Capital Guarantee
Trustee, such retiring Capital Guarantee Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Capital Guarantee Trustee all the rights,
powers, trusts and obligations of the retiring Capital Guarantee Trustee and shall duly assign,
transfer and deliver to such successor Capital Guarantee Trustee all property and money held by
such retiring Capital Guarantee Trustee hereunder.

     (b) Upon request of any such successor Capital Guarantee Trustee, the Guarantor shall execute
any and all instruments for more fully and certainly vesting in and confirming to such successor
Capital Guarantee Trustee all such rights, powers and trusts referred to in paragraph (a) of this
Section.

     (c) No successor Capital Guarantee Trustee shall accept its appointment unless at the time of
such acceptance such successor Capital Guarantee Trustee shall be qualified and eligible under this
Article.

     (d) The Capital Guarantee Trustee shall not be liable for the acts or omissions to act of any
successor Capital Guarantee Trustee.

SECTION 4.4 Merger, Conversion, Consolidation or Succession to Business

     Any Person into which the Capital Guarantee Trustee may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or consolidation to
which the Capital Guarantee Trustee shall be a party, or any Person to which all or substantially
all of the corporate trust business of the Capital Guarantee Trustee may be sold or otherwise
transferred, shall be the successor Capital Guarantee Trustee hereunder without any further act.

ARTICLE V

GUARANTEE

SECTION 5.1 Guarantee

     The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the
Guarantee Payments, as and when due, regardless of any defense, right of set-off or counterclaim
that the Issuer may have or assert. The Guarantor’s obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.

11

 

SECTION 5.2 Waiver of Notice and Demand

     The Guarantor hereby waives notice of acceptance of this Capital Securities Guarantee and of
any liability to which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.

SECTION 5.3 Obligations Not Affected

     The obligations, covenants, agreements and duties of the Guarantor under this Capital
Securities Guarantee shall in no way be affected or impaired by reason of the happening from time
to time of any of the following:

     (a) the release or waiver, by operation of law or otherwise, of the performance or
observance by the Issuer of any express or implied agreement, covenant, term or condition
relating to the Capital Securities to be performed or observed by the Issuer;

     (b) the extension of time for the payment by the Issuer of all or any portion of the
Distributions, Redemption Price, Liquidation Distribution or any other sums payable under
the terms of the Capital Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the Capital Securities;

     (c) any failure, omission, delay or lack of diligence on the part of the Holders to
enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders
pursuant to the terms of the Capital Securities, or any action on the part of the Issuer
granting indulgence or extension of any kind;

     (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other similar
proceedings affecting, the Issuer or any of the assets of the Issuer;

     (e) any invalidity of, or defect or deficiency in, the Capital Securities;

     (f) the settlement or compromise of any obligation guaranteed hereby or hereby
incurred; or

     (g) any other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a guarantor, it being the intent of this Section 5.3 that
the obligations of the Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.

     There shall be no obligation of the Holders to give notice to, or obtain consent of, the
Guarantor with respect to the happening of any of the foregoing.

SECTION 5.4 Rights of Holders

     (a) The Holders of a Majority in liquidation amount of the Capital Securities have the right
to direct the time, method and place of conducting any proceeding for any remedy available to the
Capital Guarantee Trustee in respect of this Capital Securities Guarantee or exercising any trust
or power conferred upon the Capital Guarantee Trustee under this Capital Securities Guarantee;
provided, however,

12

 

that (subject to Section 3.1) the Capital Securities Trustee shall have the right to decline
to follow any such direction that would be unjustly prejudicial to the Holders not taking part in
such direction or if the Capital Securities Trustee being advised by counsel determines that the
action or proceeding directed may not be lawfully taken or if the Capital Securities Trustee in
good faith by Responsible Officers shall determine that the action or proceedings so directed would
be illegal or expose the Capital Securities Trustee to personal liability.

     (b) If the Capital Guarantee Trustee fails to enforce its rights under this Capital
Securities Guarantee, any Holder may directly institute a legal proceeding against the Guarantor to
enforce the Capital Guarantee Trustee’s rights under this Capital Securities Guarantee, without
first instituting a legal proceeding against the Issuer, the Capital Guarantee Trustee or any other
Person or entity.

     (c) A Holder of Capital Securities may also directly institute a legal proceeding against the
Guarantor to enforce such Holder’s right to receive payment under this Capital Securities Guarantee
without first (i) directing the Capital Guarantee Trustee to enforce the terms of this Capital
Securities Guarantee or (ii) instituting a legal proceeding directly against the Issuer or any
other Person or entity.

     (d) The Guarantor expressly acknowledges that (i) this Capital Securities Guarantee will be
deposited with the Capital Guarantee Trustee to be held for the benefit of the Holders and (ii) the
Capital Guarantee Trustee has the right to enforce this Capital Securities Guarantee on behalf of
the Holders.

SECTION 5.5 Guarantee of Payment

     This Capital Securities Guarantee creates a guarantee of payment and not of collection.

SECTION 5.6 Subrogation

     The Guarantor shall be subrogated to all (if any) rights of the Holders of Capital Securities
against the Issuer in respect of any amounts paid to such Holders by the Guarantor under this
Capital Securities Guarantee; provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise any right that it may
acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a
result of payment under this Capital Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Capital Securities Guarantee. If any amount shall be paid to
the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.

SECTION 5.7 Independent Obligations

     The Guarantor acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Capital Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Capital
Securities Guarantee notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.

13

 

ARTICLE VI

LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.1 Limitation of Transactions

     So long as any Capital Securities remain outstanding, if there shall have occurred any event
that would constitute an Event of Default or a Default under the Declaration, then (a) the
Guarantor shall not declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock
or make any guarantee payment with respect thereto (other than (i) repurchases, redemptions or
other acquisitions of shares of capital stock of the Guarantor in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of employees, officers,
directors or consultants, (ii) repurchases of common stock of the Guarantor pursuant to a
contractually binding requirement to buy stock existing prior to the Event of Default or Default,
(iii) as a result of an exchange or conversion of any class or series of the Guarantor’s capital
stock for any other class or series of the Guarantor’s capital stock, (iv) the purchase of
fractional interests in shares of the Guarantor’s capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or exchanged) or (v)
purchase of the Guarantor’s capital stock in connection with the distribution thereof and (b) the
Guarantor shall not make any payment of interest on, or principal of (or premium, if any, on), or
repay, repurchase or redeem, any debt securities or guarantees issued by the Guarantor that rank
pari passu with or junior to the Debentures, other than any payment of current or deferred interest
on securities that rank pari passu with the Debentures that is made pro rata to the amounts due on
such pari passu securities (including the Debentures), provided that such payments are made in
accordance with Section 13.5(d) of the Indenture to the extent it applies, and any payments of
deferred interest on pari passu securities that, if not made, would cause the Guarantor to breach
the terms of the instrument governing such pari passu securities; provided, however, the Guarantor
may declare and pay a stock dividend where the dividend stock is the same stock as that on which
the dividend is being paid.

SECTION 6.2 Subordination

     The obligations of the Guarantor under this Capital Securities Guarantee will constitute
unsecured obligations of the Guarantor and will rank subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) of the Guarantor to the extent and in the
manner set forth in the Indenture with respect to the Debentures, and the provisions of Article
Fourteen of the Indenture will apply, mutatis mutandis, to the obligations of the Guarantor
hereunder. The obligations of the Guarantor hereunder do not constitute Senior Indebtedness (as
defined in the Indenture) of the Guarantor.

SECTION 6.3 Pari Passu Guarantees

     The obligations of the Guarantor under this Capital Securities Guarantee shall rank pari passu
with the obligations of the Guarantor under (i) any similar guarantee agreements issued by the
Guarantor on behalf of the holders of preferred or capital securities issued by any PNC Trust (as
defined in the Indenture), (ii) the Indenture and the Securities (as defined therein) issued
thereunder, (iii) any expense agreements entered into by the Guarantor in connection with the
offering of preferred or capital securities by any PNC Trust (as defined in the Indenture), and
(iv) any other security, guarantee or other agreement or obligation that is by its terms pari passu
with the Securities (as defined in the Indenture) and, in the case of this clause (iv) only, (x) is
issued with the concurrence or approval of the staff of the Federal Reserve Bank of Cleveland or
the staff of the Board of Governors of the Federal Reserve System or (y) does not at the time of
issuance prevent the Securities from qualifying for tier 1 capital treatment (irrespective of any
limits on the amount of the Company’s tier 1 capital) under the applicable capital

14

 

adequacy guidelines, regulations, policies or published interpretations of the Board of
Governors of the Federal Reserve System.

ARTICLE VII

TERMINATION

SECTION 7.1 Termination

     This Capital Securities Guarantee shall terminate upon (i) full payment of the Redemption
Price of all Capital Securities, (ii) the distribution of the Debentures to the Holders of all of
the Capital Securities or (iii) full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this Capital Securities
Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time
any Holder must restore payment of any sums paid under the Capital Securities or under this Capital
Securities Guarantee.

ARTICLE VIII

COMPENSATION AND INDEMNIFICATION

SECTION 8.1 Exculpation

     (a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise
to the Guarantor or any Covered Person for any loss, damage or claim incurred by reason of any act
or omission performed or omitted by such Indemnified Person in good faith in accordance with this
Capital Securities Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this Capital Securities
Guarantee or by law, except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person’s negligence or willful misconduct with respect
to such acts or omissions.

     (b) An Indemnified Person shall be fully protected in relying in good faith upon the records
of the Guarantor and upon such information, opinions, reports or statements presented to the
Guarantor by any Person as to matters the Indemnified Person reasonably believes are within such
other Person’s professional or expert competence and who has been selected with reasonable care by
or on behalf of the Guarantor, including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which Distributions to Holders might properly be paid.

SECTION 8.2 Compensation, Reimbursement and Indemnification

     The Guarantor agrees:

     (1) to pay to the Capital Guarantee Trustee from time to time such reasonable compensation
for all services rendered by it hereunder (which compensation shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust);

     (2) except as otherwise expressly provided herein, to reimburse the Capital Guarantee Trustee
upon its request for all expenses, disbursements and advances incurred or made by the Capital
Guarantee Trustee in accordance with any provision of this Capital Securities Guarantee (including
the costs of collection, and the compensation, expenses, advances and disbursements of the Capital
Guarantee Trustee’s counsel, accountants and experts), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and

15

 

     (3) to indemnify each Indemnified Person for, and to hold each Indemnified Person harmless
against, any loss, damage, claim, liability or expense (including the reasonable compensation,
expenses and disbursements of the Capital Guarantee Trustee’s agents and counsel) incurred without
negligence or bad faith on its part, arising out of or in connection with the acceptance or
administration of the trust or the performance of their duties hereunder, including but not limited
to the costs and expenses (including the reasonable compensation, expenses and disbursements of the
Capital Guarantee Trustee’s agents and counsel) of defending itself against, or investigating, any
claim or liability in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall survive the
termination of this Capital Securities Guarantee.

     The obligations of the Guarantor under this Section shall not be subordinate to the payment of
Senior Indebtedness pursuant to Section 6.2. As security for the performance of those obligations,
the Capital Guarantee Trustee shall have a lien prior to the Capital Securities upon all property
and funds held or collected by the Capital Guarantee Trustee as such, except funds held in trust
for the payment of the principal of (or premium, if any) or any interest on particular Capital
Securities. The obligations of the Guarantor under this Section shall survive the removal or
resignation of the Capital Guarantee Trustee and the satisfaction and discharge of this Capital
Securities Guarantee.

ARTICLE IX

MISCELLANEOUS

SECTION 9.1 Successors and Assigns

     All guarantees and agreements contained in this Capital Securities Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to
the benefit of the Holders of the Capital Securities then outstanding.

SECTION 9.2 Amendments

     Except with respect to any changes that do not adversely affect the rights of Holders (in
which case no consent of Holders will be required), this Capital Securities Guarantee may be
amended only with the prior approval of the Holders of not less than a Majority in aggregate
liquidation amount of the Capital Securities (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to the date upon which
the voting percentages are determined) of all the outstanding Capital Securities. The provisions
of Section 12.2 of the Declaration with respect to meetings of Holders apply to the giving of such
approval.

SECTION 9.3 Notices

     All notices provided for in this Capital Securities Guarantee shall be in writing, duly signed
by the party giving such notice, and shall be delivered, telecopied or mailed by registered or
certified mail, as follows:

     (a) If given to the Capital Guarantee Trustee, at the Capital Guarantee Trustee’s
mailing address set forth below (or such other address as the Capital Guarantee Trustee may
give notice of to the Holders):

The Bank of New York

101 Barclay Street, Floor 8 West

New York, New York 10286

Attention: Corporate Trust Administration

16

 

     (b) If given to the Guarantor, at the Guarantor’s mailing address set forth below (or
such other address as the Guarantor may give notice of to the Holders):

The PNC Financial Services Group, Inc.

One PNC Plaza

249 Fifth Avenue

Pittsburgh, PA 15222-2707

Attention: Treasurer

     (c) If given to any Holder, at the address set forth on the books and records of the Issuer.

All such notices shall be deemed to have been given when received in person, telecopied with
receipt confirmed, or mailed by first class mail, postage prepaid, except that if a notice or other
document is refused delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.

SECTION 9.4 Benefit

     Nothing in this Capital Securities Guarantee or in the Capital Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors hereunder, the holders
of Senior Indebtedness and the Holders, any benefit or any legal or equitable right, remedy or
claim under this Capital Securities Guarantee.

SECTION 9.5 Separability Clause

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

SECTION 9.6 Governing Law

     THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED
BY SUCH LAWS WITHOUT REGARD FOR THE PRINCIPLES OF ITS CONFLICTS OF LAWS.

     THIS CAPITAL SECURITIES GUARANTEE is executed as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	THE PNC FINANCIAL SERVICES GROUP, INC., as Guarantor
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

17

 

	 	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK,
	 	 	as Capital Guarantee Trustee
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

18NN EX 10.1 01-10-07

    
      

    

    Master
      Agreement

     

    

    
      	
              entered
                into by and between

            	
              NN
                Europa ApS

            
	 	
              Sundkrogsade
                5

            
	 	
              DK
                2100 Copenhagen

            
	 	
              Denmark

            
	 	 
	 	 
	 	
              (hereinafter
                referred to as “Supplier”)

            
	 	 
	 	 
	
              and

            	
              Schaeffler
                KG

            
	 	
              Industriestrasse
                1 - 3

            
	 	
              91074
                Herzogenaurach

            
	 	
              Germany

            
	 	 
	 	 
	 	
              acting
                for itself and on behalf of the companies located
                in the Federal Republic of Germany in which they or their respective
                shareholders individually
                or collectively, directly or indirectly hold
                a majority interest

            
	 	 
	 	
              (hereinafter
                referred to as “Customer”)

            
	 	 
	 	
              (each
                a “Party”; both, the “Parties”)

            

    

     

     

    Page
      1 of
      17

    
      
        
          ©
            2006 Schaeffler KG, All rights reserved

          
            Level:
              07/2006

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              1.

            	
              Subject
                Matter of Master Agreement

            

    

    

    
      	
              1.1

            	
              This
                Master Agreement shall govern Supplier's long-term obligation to
                supply
                Customer
                with certain products (hereinafter the “Contract Products”) and the
                rights
                and obligations of the Parties associated
                therewith.

            

    

     

    
      
        	
                1.2

              	
                All
                  agreements and transactions of the Parties shall be governed exclusively
                  by the
                  following terms and conditions. The application of Supplier's general
                  terms and
                  conditions or Customer's general purchasing conditions is hereby
                  expressly
                  excluded.
                  The terms and conditions of this Master Agreement shall apply even
                  when
                  not expressly referenced in the applicable purchase order or scheduling
                  agreement,
                  and even when the Supplier or Customer refers to general terms
                  and
                  conditions and the other Party fails to expressly object to the
                  incorporation of
                  these terms and conditions.

              

      

    

    

    
      	
              1.3

            	
              Supplier
                shall deliver the Contract Products to Customer based upon purchase
                orders,
                volume contracts or scheduling
                agreements.

            

    

    

    
      	
              2.

            	
              Purchase
                order

            

    

    

    
      	
              2.1

            	
              Customer
                may place purchase orders for the delivery on specific delivery dates
                of
                fixed quantities of Contract Products. Each purchase order from Customer
                to Supplier
                shall be made in writing and include at least the following
                information:

            

    

    

    
      	 	
              -

            	
              product
                type(s)

            

    

    
      	 	
              -

            	
              price

            

    

    
      	 	
              -

            	
              quantity

            

    

    
      	 	
              -

            	
              delivery
                dates

            

    

    
      	 	
              -

            	
              place
                of delivery

            

    

    

    
      	
              2.2

            	
              The
                following provisions of this Section 2.2 shall apply only to the
                extent
                that the Parties
                have not agreed to deal with the matters herein in a different manner.
                Unless
                Supplier objects in writing, within 10 business days of the receipt
                of a
                written
                order, such order shall be deemed to have been accepted and confirmed
                by
                Supplier. Customer may terminate purchase orders up to eight weeks
                prior
                to the
                agreed delivery date. In the event of such termination, Customer
                shall
                bear the
                costs of materials that were already procured, as necessary within
                the
                scope of
                the order, prior to the termination and cannot otherwise be used.
                Upon
                such payment, Customer shall become the owner of such materials and
                shall
                instruct Supplier, and Supplier shall comply with such instructions,
                as to
                what has to be done
                with such materials. All other claims against Customer relating to
                such
                termination hereby shall be
                excluded.

            

    

     

     

    Page
      2 of
      17

    
      
        

          
            
              
                ©
                  2006 Schaeffler KG, All rights reserved

                
                  Level:
                    07/2006

                

              

              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

    

     

    
      	
              3.

            	
              Scheduling
                agreement

            

    

    

    
      	
              3.1

            	
              Supplier
                and Customer may enter, with respect to one or more of the Contract
                Products,
                into a written agreement named “scheduling agreement”. Such agreement
                shall include at least the following
                information:

            

    

    

    
      	 	
              -

            	
              product
                type(s)

            

    

    
      	 	
              -

            	
              price

            

    

    
      	 	
              -

            	
              forecast
                of supply volume (non-binding target
                volume)

            

    

    
      	 	
              -

            	
              term

            

    

    
      	 	
              -

            	
              place
                of delivery

            

    

    

    
      	
              3.2

            	
              Supplier
                undertakes to have available sufficient personnel and technical
                resources
                to be able to supply the target volume specified in the scheduling
                agreement,
                as well as an additional volume of 15
                %.

            

    

    

    
      	
              3.3

            	
              Customer
                shall, within the limits of the target volume stipulated in the delivery
                schedule
                (plus additional volume), submit to Supplier written schedule lines
                defining
                the exact supply volumes and delivery dates for a certain time period.
                The
                submission of written schedule lines by Customer shall be deemed
                as
                release
                for the production and purchase of materials each for a certain go-ahead
                period.
                The written schedule lines shall be binding for the go-ahead period
                for
                production.
                For the go-ahead period for the purchase of materials Customer
                shall
                pay the costs of materials that are procured by Supplier, as necessary
                within
                the scope of such go-ahead period and that cannot otherwise be used.
                Upon
                such payment, Customer shall become the owner of such materials and
                shall
                instruct Supplier, and Supplier shall comply with such instructions,
                as to
                what
                has to be done with such materials. Any further claims of Supplier
                are
                excluded.
                With the exception of supply volumes defined in written schedule
                lines
                all supply volumes of Customer are provided to the best of Customer's
                knowledge
                but are not legally binding.

            

    

     

     

    Page
      3 of
      17

    
      
         

      

    

    
      
        
          ©
            2006 Schaeffler KG, All rights reserved

          
            Level:
              07/2006

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              4.

            	
              Volume
                Contract

            

    

    

    
      	
              4.1

            	
              By
                entering into a volume contract, Supplier undertakes to hold a certain
                quantity of
                the Contract Products ready for delivery to Customer. For this purpose,
                Customer
                shall transmit a written volume contract to Supplier, which shall
                include
                at least the following information:

            

    

    

    
      	 	
              -

            	
              product
                type(s)

            

    

    
      	 	
              -

            	
              price

            

    

    
      	 	
              -

            	
              contract
                volume (a purchase obligation shall exist only if expressly agreed
                to
                in
                writing)

            

    

    
      	 	
              -

            	
              term

            

    

    

    
      	
              4.2

            	
              Unless
                Supplier objects in writing, within 10 business days of receipt of
                a
                written volume
                contract, to such written volume order, such volume contract shall
                be
                deemed
                to have been accepted and confirmed by Supplier. Supplier commits
                itself
                at all times to keep in stock the minimum quantity of Contract Products
                stipulated
                in the volume contract or, if no minimum volume has been stipulated,
                at
                least 25% of the contract volume, and to deliver such quantity of
                Contract
                Products
                immediately upon receipt of Customer's release order therefore. Upon
                receipt
                of written release order therefore from Customer, Supplier is obliged
                to
                deliver
                the stocked Contract Products to Customer within the delivery period
                stipulated
                in the volume contract or, if no delivery period is stipulated in
                the
                volume
                contract, within five business days of Customer's release order.
                If the
                quantity
                ordered by Customer exceeds the quantity to be kept in stock under
                the
                volume
                contract, then Supplier immediately shall manufacture the excess
                order
                quantity
                and deliver the same to Customer.

            

    

    

    
      	
              5.

            	
              Compliance
                with Regulations

            

    

    

    Supplier
      shall ensure that it will, in good time, have obtained all information relevant
      to the
      performance of its contractual obligations as well as of Customer's intended
      use
of
      the
      Contract Products. Supplier guarantees that the Contract Products are suitable
      for
      a
      safe and economical use in accordance with ail applicable regulations and are
      in
conformity
      with the state of the art and science. When carrying out its performance(s),
      Supplier will observe all relevant standards, laws and legal regulations,
      in particular those concerning hazardous materials and dangerous goods,
the
      protection of the environment and the prevention of accidents. Supplier will
      also act in compliance with generally acknowledged safety and industrial
      medicine specifications
      as well as with company standards of Supplier. Furthermore the Contractor
      is obliged to comply with the respective export control regulations and to
      inform
      the Customer unrequested in written form about the export control designation
      of
      the contractual products especially according to EU and US legislation at the
      latest with
      the
      delivery. Supplier shall notify Customer of any governmental permits or
notification
      requirements that may be required for the import or the use of the Contract
      Products.

     

     

    Page
      4 of
      17

     

    
      
        
          ©
            2006 Schaeffler KG, All rights reserved

          Level:
            07/2006

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              6.

            	
              Modification
                Requests

            

    

    

    
      	
              6.1

            	
              Customer
                is entitled to request from Supplier modifications in design and
                construction
                of the Contract Products, so long as Supplier can be reasonably
                expected
                to meet such requests. Supplier shall implement such modifications
                within
                a reasonable period of time. Mutually satisfactory agreements shall
                be
                concluded
                concerning the consequences of such modifications, in particular
                with
                regard to delivery dates, extra and reduced costs. Customer will
                determine
                such consequences
                within its reasonable discretion if agreement (regarding the matters
                outlined in the previous sentence) cannot be reached within a reasonable
                period of time.

            

    

    

    
      	
              6.2

            	
              Supplier
                shall notify Customer as soon as possible of any planned changes
                in
                the
                manufacturing process and the place of manufacture of Supplier or
                any
                sub-supplier,
                as well as any changes in the materials used by Supplier or any
                sub-supplier. Such changes may not be undertaken until its receipt
                of
                Customer's written consent. Supplier shall bear all costs incurred
                in
                connection with such changes.

            

    

    

    
      	
              6.3

            	
              Supplier
                is obligated to propose to Customer any changes to the Contract
                Products
                that Supplier deems necessary or advisable. Supplier shall not
                implement
                changes until its receipt of Customer's written
                consent.

            

    

    

      
        	
                6.4

              	
                During
                  the term of this Agreement, the Parties shall make reasonable efforts
                  to
                  identify
                  potential cost savings through continuous value analyses and to
                  adjust the
                  price accordingly. The Parties shall, on a case-by-case basis,
                  agree upon
                  the
                  allocation of the cost benefits resulting from any potential savings
                  identified through
                  the Parties' joint value analyses.

              

      

       

       

      Page
        5 of
        17

    

     

    
      
        
          ©
            2006 Schaeffler KG, All rights reserved

          Level:
            07/2006

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              7.

            	
              Prices/Payment
                Terms/Invoices

            

    

    

    
      	
              7.1

            	
              The
                agreed prices are firm prices. Unless otherwise agreed, payment will
                be
                made
                within 14 days with a 3% cash discount, until the 25th day of the
                subsequent
                month with a 2% cash discount, or within 90 days net. These periods
                are
                computed from the time of performance in compliance with the contract
                and receipt of a proper and verifiable invoice. If Customer receives
                and
                accepts
                a delivery at an earlier date than the date agreed upon, the payment
                period
                begins with the agreed delivery date. Customer is entitled to choose
                the
                method
                of payment in its own discretion (e.g., check or bill of exchange).
                Supplier agrees to participate, upon Customer's demand, in a credit
                note
                procedure.

            

    

    

    
      	
              7.2

            	
              Invoices
                are to be submitted without carbon copies but shall include the account,
                place
                of unloading, supplier number, part number, tax ID number, statistical
                product
                number (customs tariff code), order number, country of origin, number
                of
                pieces and price per piece, as well as volume per
                delivery.

            

    

    

    
      	
              7.3

            	
              Supplier
                is not entitled to assign a claim against Customer to a third party,
                or to
                have
                such claim collected by a third party. The provisions of § 354a of the
                German
                Commercial Code (Handelsgesetzbuch)
                shall
                not be affected by the foregoing
                sentence.

            

    

    

    
      	
              7.4

            	
              Supplier
                shall have the right to set-off against any claims of Customer or
                the
                right
                of retention, if and to the extent that Supplier's claims are undisputed
                or its counterclaims
                are final and non-appealable. Customer shall have the right to
                set-off
                against claims of Supplier any claims of affiliates of Customer within
                the
                meaning
                of section 15 AktG [German Stock Corporation Act]. Customer shall
                also
                have the right to set-off its claims against any claim of any affiliate
                of
                Supplier
                within the meaning of section 15
                AktG.

            

    

    

    
      	
              8.

            	
              Spare
                Parts

            

    

    

    
      	
              8.1

            	
              Supplier
                shall ensure that he will continue to be able, for a period of at
                least 15
                years
                following the termination of the supply relationship (e.g.,
                discontinuation of series,
                expiration of scheduling agreement) and on reasonable terms and
                conditions,
                to deliver to Customer the Contract Products or parts thereof as
                spare
                parts.

            

    

     

     

    Page
      6 of
      17

     

    
      
        
          ©
            2006 Schaeffler KG, All rights reserved

          Level:
            07/2006

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              8.2

            	
              Unless
                Customer has agreed-to otherwise, the prices for the Contract Products
                last agreed to by the Parties shall remain valid for the first three
                years
                of that period
                of time.

            

    

    

    
      	
              9.

            	
              Delivery
                Terms/Packaging

            

    

    

    
      	
              9.1

            	
              Deliveries
                are “DDU” (most recent Incoterms) to the location determined by
                Customer
                and, unless determined otherwise, shall include packaging and conservation.
                Customer's delivery and transport provisions in their most recent
                version
                shall apply. The Parties shall agree on dispatch notes on an individual
                basis.
                Each shipment shall include the shipping documents required by
                Customer,
                especially, a delivery note in
                duplicate.

            

    

    

    
      	
              9.2

            	
              If
                Incoterms other than “DDU” have been agreed upon, then Supplier shall
                inform
                Customer and the recipient designated by Customer in a timely manner
                of
                the
                size and weight of the shipment. Transport insurance, will be obtained
                by
                Customer
                to the extent that Customer is obligated to do so pursuant to the
                agreed-upon
                Incoterm.

            

    

    

    
      	
              9.3

            	
              When
                preparing the shipping documents, Supplier shall take into account
                that
                the
                customs clearance will be carried out at the plant of Customer and
                that
                Customer
                is exempted from the duty of presentation. For shipments from preferential
                countries, Supplier must provide a proof of preferential status with
                each
                shipment The long-term supplier declaration pursuant to EEC Reg.
                1207/2001
                must be presented annually. To the extent that the delivered goods
                require
                an export license, Supplier shall notify Customer thereof without
                undue
                delay,
                specifying the applicable export license number and export list position
                number.

            

    

    

    
      	
              9.4

            	
              To
                the extent that, under the agreed-upon Incoterm, Customer is responsible
                for the
                payment of any duties, taxes and other charges, Customer's payment
                obligation
                shall be limited to ordinary duties, taxes and other charges. Any
                extraordinary
                duties, taxes or other charges, such as customs penalties or
                anti-dumping
                duties, shall be paid by Supplier. Supplier shall, upon request,
                make
                available to Customer, all documents necessary for obtaining a refund
                of
                any paid
                duties, taxes or other charges.

            

    

     

     

    Page
      7 of
      17

     

    
      
        
          ©
            2006 Schaeffler KG, All rights reserved

          Level:
            07/2006

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              9.5

            	
              Unless
                otherwise agreed, the Contract Products shall be packaged in conformity
                with
                the then effective Packaging Manual of Customer. If Customer returns
                reusable
                packaging to Supplier freight prepaid, Customer shall be entitled
                to a
                refund
                in the amount of the value of the
                packaging.

            

    

    

    
      	
              10.

            	
              Delivery
                Dates/Delivery Default

            

    

    

    Agreed
      dates and time limits are binding. A delivery date or term requirement shall
      be
      deemed satisfied if Customer or the consignee determined by Customer has
      received the
      Contract Products in time. Supplier shall inform Customer immediately in written
      form about any foreseeable delay in delivery. The Supplier must also indicate
      the reasons
      for such delay and its expected duration. If the reason for the delay is
beyond
      the control of Supplier, Supplier may invoke such reason only if Supplier has
      met
      its
      obligation to notify. In case of a culpable delay in delivery, Customer is
      entitled to
      demand
      a contractual penalty from Supplier. A penalty of 0,5% will be charged for
      each
      week
      or part of a week, the maximum penalty is 5% of the total order value. The
      agreement
      pertaining to the contractual penalty or enforcement thereof shall not affect
      any
      justified legal claims of Customer for delay in delivery. Paid contractual
      penalties shall be set off against claims for damages. The contractual penalty
      may be claimed until
      the
      date of payment of the delayed Contract Products.

    

    
      	
              11.

            	
              Quality
                Assurance

            

    

    

    Customer's
      quality assurance agreement for suppliers, as amended from time to time,
shall
      apply in addition to other applicable provisions. This quality assurance
agreement
      may be viewed on Customer's Web site, www.ina.com,
      under
      the heading “Purchasing,”
      subheading “Norms,” or shall be mailed to Supplier upon request.

    

    
      	
              12.

            	
              Inspection
                of Incoming Contract
                Products

            

    

    

    Customer
      inspects incoming Contract Products only with respect to externally apparent
      defects and externally apparent deviations in identity or volume. Customer
      will
      give
      notice of such defects without undue delay. Customer reserves the right to
      conduct
      additional inspections of Contract Products. Furthermore Customer will also
      give
      notice of defects as soon as such defects have been detected in the ordinary
      course
      of
      business. With respect to the foregoing, Supplier hereby waives the right to
      assert
      that the defects have been asserted too late. If defects have been discovered,
      Customer
      shall be entitled to return the entire shipment.

     

     

    Page
      8 of
      17

     

    
      
        
          ©
            2006 Schaeffler KG, All rights reserved

          Level:
            07/2006

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              13.

            	
              Confidentiality

            

    

    

    
      	
              13.1

            	
              Unless
                the Parties have entered, or will enter, into a separate
                non-disclosure agreement,
                the following shall apply: Supplier shall keep secret all
                information received
                from Customer, including, without limitation, drawings,
                documents, know-how,
                samples, production devices, models, media, etc., may not make such
                information available to third parties (including any sub-suppliers)
                without the
                written consent of Customer and may not use such information for
                any purposes
                other than as determined by Customer. These obligations apply mutatis
                mudandis to
                copies and duplicates. This confidentiality obligation does not
                apply to information that the Supplier had already obtained legitimately
                at the time
                of disclosure provided such information was not subject to a
                confidentiality obligation,
                that the Supplier later obtains legitimately without being obligated
                to keep
                such information confidential, that is or becomes generally known
                to
                the public
                without any breach of contract by either Party or for the disclosure
                or
                the independent
                use of which the Supplier has received written permission. Supplier
                may not advertise its business relationship with Customer without
                the prior
                written consent of Customer. If Supplier breaches its foregoing
                obligations, a
                contractual penalty in the amount of Euro 25,000.00 shall become
                due
                and payable
                immediately for each breach. Supplier shall retain the right to have
                the reasonableness
                of the amount of contractual penalty determined by a court decision.
                Damages shall be set off against any paid contractual
                penalties.

            

    

    

    
      	
              13.2

            	
              Customer
                retains title and reserves all other rights (such as copyrights)
                in and to
                any
                information received from Customer. Copies or duplicates shall be
                made
                only
                with Customer's prior written consent. Title to the copies or duplicates
                passes
                to Customer at the time such copies or duplicates are created. Supplier
                hereby
                agrees with Customer that Supplier stores the copies or reproductions
                on
                behalf
                of Customer as bailee. Supplier agrees, to properly store, at its
                expense
                all
                documents and other objects, including copies thereof, that were
                made
                available
                to Supplier, to keep them in perfect condition, to obtain insurance
                for
                them
                and to return them to Customer or destroy them, in each case upon
                the
                request
                of Customer. Supplier has no right, on whatever grounds to retain
                such
                documents and items. Supplier shall confirm the complete return or
                destruction of
                the relevant document or item in
                writing.

            

    

     

     

    Page
      9 of
      17

     

    
      
        
          ©
            2006 Schaeffler KG, All rights reserved

          Level:
            07/2006

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              14.

            	
              Liability
                for Product Defects/Costs

            

    

    

    
      	
              14.1

            	
              If
                a Contract Product is defective, Customer will be entitled to the
                statutory rights,
                unless the following conditions provide otherwise. If the industrial
                safety is
                threatened, if there is a danger of unusually high damages or for
                the
                purpose of maintaining Customer's ability to deliver its customers,
                Customer shall be entitled,
                following notification of the Supplier, to remedy the defects itself
                or
                have them
                remedied by a third party. Costs incurred as a result of remedial
                action
                taken
                in accordance with the preceding sentence shall be borne by Supplier.
                Supplier
                is responsible for all damages, costs and expenses resulting, directly
                or
                indirectly
                from defects. In case at least parts of a shipment have been found
                to
                be
                defective, Supplier will also be responsible for the costs for inspections
                of incoming
                goods that exceed the customary scope of inspection. The foregoing
                applies
                also to comprehensive and partial inspections of the shipment in
                the
                subsequent
                course of business by Customer and/or any of Customer's customers.
                If Supplier avails itself of a third party to carry out a performance,
                Supplier
                shall be held liable for this third party as for any other person
                employed
                in
                performing an obligation.

            

    

    

    
      	
              14.2

            	
              Supplier
                shall reimburse all costs incurred by Customer or any of Customer's
                customers
                in situations leading up to or arising in connection with liability
                for
                defects
                to the extent such costs have been incurred for the purpose of avoiding,
                preventing
                or mitigating damages (e.g.
                recalls).

            

    

    

    
      	
              14.3

            	
              Supplier
                shall reimburse all costs that Customer is obligated to bear as a
                matter
                of
                statutory liability vis-á-vis
                its
                customers to the extent that such costs are arising
                from defects of shipments delivered by
                Supplier.

            

    

    

    
      	
              14.4

            	
              Unless
                mandatory law provides otherwise, Supplier is liable for any defects
                that
                arise
                within 36 months of the date of receipt of the supplier's delivery
                or of
                the date
                of acceptance, provided such acceptance was required as a matter
                of law
                or
                agreement. In the case of Supplementary Specific Performance (cure
                of
                defects
                or delivery of goods free of defects) this period is extended by
                the time
                during which the Contract Product cannot be used as stipulated in
                the
                contract. Supplementary
                Specific Performance is also subject to the periods stated above.
                All
                claims relating to defects become time barred at the earliest two
                months
                after all
                claims of the final customer have been fulfilled. This delay in time
                bar
                expires at
                the latest five years after delivery to
                Customer.

            

    

     

     

    Page
      10 of
      17

     

    
      
        
          ©
            2006 Schaeffler KG, All rights reserved

          Level:
            07/2006

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              15.

            	
              Product
                Liability

            

    

    

    
      	
              15.1

            	
              Supplier
                shall indemnify or release Customer from and against any and all
                third-party
                claims alleging that a defective Contract Product has resulted in
                death,
                bodily
                harm or property damage.

            

    

    

    
      	
              15.2

            	
              The
                Parties shall cooperate in all respects to defend against any pending
                or
                threatened
                claims. Supplier shall neither offer nor accept any settlements
                without
                the prior written consent of
                Customer.

            

    

    

    
      	
              16.

            	
              Insurance
                Coverage

            

    

    

    Supplier
      shall, for the duration of the supply relationship and for a reasonable time
      period
      thereafter, maintain reasonable insurance with worldwide coverage for risks
      arising from the supply relationship (including, without limitation, business
      liability insurance,
      expanded product liability insurance including coverage for costs of
installation
      and removal, inspection and sorting costs, and motor vehicle recall costs).
      Upon
      Customer's demand therefore, Supplier shall provide Customer with proof of
      insurance
      coverage.

    

    
      	
              17.

            	
              Reporting
                Duties

            

    

    

    Supplier
      shall report to Customer, immediately upon having knowledge thereof, any
safety
      defects or other irregularity of the Contract Products or any components
thereof.
      In particular, Supplier shall make available to Customer, in the form
requested
      by Customer, all information necessary for compliance with any reporting
duties
      owed to any German or foreign government authorities.

     

     

    Page
      11 of
      17

     

    
      
        
          ©
            2006 Schaeffler KG, All rights reserved

          Level:
            07/2006

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              18.

            	
              Warranty
                of Title

            

    

    

    
      	
              18.1

            	
              Supplier
                shall indemnify Customer and Customer's customers from any and all
                third
                party claims arising from the infringement of any intellectual property
                rights and
                shall bear any and all associated costs. Each Party agrees to notify
                the
                other
                immediately of any known infringement risks and alleged infringements
                of
                which
                it becomes aware, and both Parties agree to provide to each other
                an
                opportunity
                jointly to take appropriate defensive action against such
                claims.

            

    

    

    
      	
              18.2

            	
              Customer
                shall have the right, exercising the care of a prudent merchant,
                to
                procure
                at Supplier's cost from the owner of the property rights, any consents,
                approvals
                or licenses necessary for the use of the Contract Products and
                services.

            

    

    

    
      	
              19.

            	
              Trademark

            

    

    

    Upon
      Customer's request, Supplier shall affix to the Contract Products to be
      delivered to
      Customer only the trademark specified by Customer. Supplier shall not use the
      trademark
      specified by Customer for any other purpose.

    

    
      	
              20.

            	
              Materials,
                Packaging and Tools provided by
                Customer

            

    

    

    Substances,
      parts, containers, special packaging, tools, measuring instruments or
substances
      or similar items provided by Customer (hereinafter “Accessory”) shall
remain
      the property of Customer. In case of processing of Accessories, Customer will
      become
      co-owner of the new goods. The co-ownership share of Customer shall be equal
      to
      the proportionate value of the Accessories compared to the overall value of
      the
      new
      item. Accessories may be copied only with the prior written consent of
Customer.
      The copies or duplicates become the property of Customer upon creation.
Supplier
      shall not have any rights of retention on whatever basis to the Accessories.
      Neither Accessory nor copies or duplicates thereof, may be made available to
      third parties
      (which shall include sub-suppliers) or may not be used for any other purposes
      other than the agreed upon purpose.

     

     

    Page
      12 of
      17

    
      
        

          
            
              
                ©
                  2006 Schaeffler KG, All rights reserved

                Level:
                  07/2006

              

              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

         

      

    

    
      	
              21.

            	
              Tools

            

    

    

    Notwithstanding
      any other agreement to the contrary, Customer shall receive full ownership
      or co-ownership of the tools to the extent that Customer has contributed
      to the
      proven costs for tools used in the manufacture of the supplied Contract
      Products. Customer
      shall acquire (co-) ownership of the tools upon payment. The tools
      shall remain
      on
      loan with Supplier. Supplier shall require the consent of Customer
      to dispose
      (in the legal or the factual sense of the term) of the tools, to move the
      location of
      the
      tools or to disable the tools permanently. Supplier shall label the tools as
      the property
      of Customer or property held in co-ownership by Customer as
      applicable. Supplier
      shall bear the costs for maintenance, repair or replacement of the
      tools. Customer
      shall have title in the replacement tools in the same proportion as in
      the original
      tools. Supplier must use the tools (co-)owned by Customer exclusively for
      the purpose
      of manufacturing the Contract Products. After the end of delivery,
      Supplier must,
      upon request of Customer, immediately turn over the tools to Customer.
      For tools
      co-owned by Customer, Customer shall, following hand over of the tools
      to Customer,
      reimburse Supplier for the then present value of Supplier's
      co-ownership share.
      In
      no event shall Supplier have a right to retain the tools. Supplier's
      obligation to
      turn
      over the tools shall apply also in case of an insolvency application with
      respect to
      Supplier and in cases of long term interruptions of the supply relationship.
      Supplier shall
      insure the tools within the agreed upon scope or, absent such agreement,
      within the
      customary scope. 

    

    
      	
              22.

            	
              Software

            

    

    

    Supplier
      agrees to modify/improve the software pursuant to the instructions of
Customer
      and in exchange for an adequate reimbursement of costs for a period of 5 years
      from the shipment of the respective Contract Products, unless the scope of
      the
      delivery includes standardized software. To the extent the software originates
      with a supplier
      of Supplier, Supplier shall obligate such earlier supplier
      accordingly.

    

    Supplier
      shall deposit the source code of the software with a German notary of its
choice
      and shall communicate to Customer the depositee's information. Customer shall
      have the right to access the deposited source code in all instances in which
      Supplier fails or is unable to perform its obligation under the first sentence
      of this section.

     

     

    Page
      13 of
      17

     

    
      
        
          ©
            2006 Schaeffler KG, All rights reserved

          Level:
            07/2006

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              23.

            	
              Force
                Majeure, Long-Term Inability to Deliver Contract Products, Right
                of
                Emergency
                Production

            

    

    

    
      	
              23.1

            	
              Industrial
                conflicts, riots, acts of government and any other events that are
                unpredictable
                and unpreventable exempt the concerned party from the contractual
                obligations, in each case for such time as the disturbance exists
                and
                within
                the scope of its effects. The party affected by the force majeure
                event
                must
                fully inform the other party and must make all efforts, within the
                limitations of
                what can reasonably be expected, to limit the effects of such events.
                The
                party
                affected by the force majeure event must notify the other party without
                undue
                delay of the end of the force majeure
                event.

            

    

    

    
      	
              23.2

            	
              In
                cases of a long term inability to deliver, cessation of payments,
                the
                opening of an
                insolvency proceeding, the refusal to open insolvency proceedings
                due to
                insufficient
                assets or the commencement of comparable proceedings with respect
                to one of the parties the other party shall be entitled to rescind
                the
                contract
                with respect to the part that has not yet been performed. If one
                of the
                foregoing
                events occur with respect to Supplier, Supplier shall support Customer
                to
                the best of its abilities in the efforts of Customer to move the
                manufacture of the
                Contract Products to Customer or to a third party, which support
                shall
                include the granting of licenses to intellectual property rights
                to the
                extent such rights are necessary
                for the manufacture of such Contract Product(s), such licenses to
                be
                granted
                on terms customary in the industry.

            

    

    

    
      	
              23.3

            	
              In
                all cases of an anticipated or actual long-term inability to deliver
                the
                Contract Products,
                including in the event of a termination of the agreement by Customer
                for
                cause, Supplier shall grant a right of emergency production to Customer
                or
                to a
                third party designated by Customer, i.e., Supplier shall make available
                to
                Customer
                ail necessary tools and know-how (including licenses for property
                rights),
                and take all other measures, including personnel assistance and
                instruction,
                necessary for the continuation of production at a location designated
                by
                Customer. If Supplier is at fault for its inability to deliver the
                Contract Products,
                then the right of emergency production shall be granted to Customer
                at
                no charge; in all other cases, Customer shall reimburse Supplier
                for the
                proven
                costs incurred in connection therewith. Supplier shall have the right,
                upon
                reaching an agreement with Customer, to respond to any threatened
                or
                actual
                inability to deliver the Contract Products by relocating production
                of the
                Contract
                Products to one of Supplier's other
                plants.

            

    

     

     

    Page
      14 of
      17

     

    
      
        
          ©
            2006 Schaeffler KG, All rights reserved

          Level:
            07/2006

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              24.

            	
              Term

            

    

    

    
      	
              24.1

            	
              This
                Master Agreement shall enter into effect at the time of the execution
                thereof by both Parties and shall have an indefinite
                term.

            

    

    

    
      	
              24.2

            	
              Unless
                otherwise agreed, either Party may terminate this Agreement as of
                the
                end
                of any given month by giving twelve months' prior written notice
                to the
                other Party.

            

    

    

    
      	
              24.3

            	
              Termination
                of this Master Agreement shall have no effect upon the continued
                validity
                of any agreements made by the Parties with respect to the supply
                of
                Contract
                Products pursuant to this Master Agreement, the provisions of this
                Master
                Agreement continuing to be in full force and effect with respect
                to such
                agreements.

            

    

    

    
      	
              25.

            	
              Termination
                for Cause

            

    

    

    In
      addition to the statutory termination rights, Customer shall have the right
      to
terminate
      in writing for cause this Master Agreement, and/or any agreements made by
the
      Parties with respect to the supply of Contract Products, without being required
      to provide any advance notice. Termination for cause shall include any of the
      following:

    

    
      	
              -

            	
              Supplier's
                failure, despite Customer's notice, on two or more occasions to deliver
                the
                Contract Products in compliance with the agreement of the
                Parties;

            

    

    

    
      	
              -

            	
              Supplier's
                failure, as detected during an audit, to produce the Contract Products
                in
                accordance with the quality norms specified by
                Customer;

            

    

    

    
      	
              -

            	
              Supplier's
                failure to meet its payment obligations in a timely manner, or the
                filing
                of a
                petition for the initiation of insolvency proceedings or comparable
                proceedings with
                respect to Supplier;

            

    

     

     

    Page
      15 of
      17

     

    
      
        
          ©
            2006 Schaeffler KG, All rights reserved

          Level:
            07/2006

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              -

            	
              Substantial
                change in the ownership structure or management of Supplier;
                or

            

    

    

    
      	
              -

            	
              Supplier's
                serious breach of a material contractual obligation, including but
                not
                limited
                to the duty of confidentiality.

            

    

    

    
      	
              26.

            	
              General
                Provisions

            

    

    

    
      	
              26.1

            	
              The
                place of performance for all deliveries and services shall be the
                destination specified
                by Customer.

            

    

    

    
      	
              26.2

            	
              This
                Master Agreement, as well as any modifications, side agreements or
                termination
                notices shall require written form. Unless otherwise provided in
                this
                Master
                Agreement, all other representations or notices shall be valid only
                if in
                writing.

            

    

    

    
      	
              26.3

            	
              The
                contractual relationship shall be governed by the laws of the Federal
                Republic
                of Germany, excluding the German conflict of laws rules and the provisions
                of the UN Convention on Contracts for the International Sale of
                Goods
                (CISG), Unless the Parties agree to the exclusive jurisdiction of
                another
                competent
                court, all disputes between the Parties shall be heard and resolved
                by
                a
                court of competent jurisdiction in Nuremberg, Germany. Notwithstanding
                the
                foregoing,
                Customer shall have the right to file legal actions against Supplier
                in
                any
                other court of competent
                jurisdiction.

            

    

    

    
      	
              26.4

            	
              In
                the event that any provision of this Agreement is invalid or may
                become
                invalid,
                the validity of the remaining provisions shall not be affected thereby
                and
                shall
                remain valid. The Parties commit themselves, in good faith, reasonably
                to
                replace
                any invalid provision with a valid provision that has an economic
                result
                equivalent
                the original provision.

            

    

    

    
      	
              26.5

            	
              Supplier
                shall not, without the prior written consent of Customer, transfer
                to any
                third
                parties any rights and obligations set forth in this Master
                Agreement.

            

    

     

     

    Page
      16 of
      17

    
      
        
          ©
            2006 Schaeffler KG, All rights reserved

          Level:
            07/2006

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              26.6

            	
              Customer
                shall store and process all (personal) data necessary for the performance
                of this Agreement in compliance with applicable
                law.

            

    

    

    

    
      	
              Place,
                Date

            	 	
              Herzogenaurach,
                05.01.2007

            
	 	 	 
	
              NN
                Europe ApS

            	 	
              Schaeffler
                KG

            
	 	 	 
	 	 	 
	
              /s/
                illegible

            	 	
              /s/
                illegible

            

    

     

     

    Page
      17 of
      17

    
      
        

          
            
              
                ©
                  2006 Schaeffler KG, All rights reserved

                Level:
                  07/2006

              

              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

         

      

    

    Amendment
      to the

    Master
      Agreement

    

    

    
      	
              entered
                into by and between

            	
              NN
                Europe ApS

            
	 	
              Sundkrogsgade
                5

            
	 	
              DK
                2100 Copenhagen

            
	 	
              Denmark

            
	 	 
	 	 
	 	
              (hereinafter
                referred to as “Supplier”)

            
	 	 
	 	 
	
              and

            	
              Schaeffler
                KG

            
	 	
              Industriestraße
                1 -
                3

            
	 	
              91074
                Herzogenaurach

            
	 	
              Germany

            
	 	 
	 	 
	 	
              acting
                for itself and on behalf of the companies located
                in Europe in which they or their respective shareholders individually
                or
                collectively,
                directly or indirectly hold a majority interest

            
	 	 
	 	
              (hereinafter
                referred to as “Customer”)

            

    

    

    

    The
      following modifications to the Master Agreement are agreed upon:

     

    The
      contracting parties shall be modified as follows:

    

    “Schaeffler
      KG

    Industriestraße
      1 - 3

    91074
      Herzogenaurach

    Germany

     

    acting
      for itself and on behalf of the companies located
in
      Europe
      in which
      they or their respective shareholders individually or collectively, directly
      or
      indirectly hold a majority
      interest”

     

     

    Page
      1 of
      5

     

    
      
        
          ©
            2006 Schaeffler KG, All rights reserved

          Level:
            03/2006

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              3.

            	
              Scheduling
                agreement

            

    

    

    Section
      3.3 shall be amended as follows after the second sentence:

    

    “The
      go
      ahead period shall be agreed between the parties with respect to the different
      ball sizes.”

    

    
      	
              4.

            	
              Volume
                Contract

            

    

    

    In
      Section 4.2 the following part of sentence two shall be deleted:

    

    “or,
      if
      no minimum volume has been stipulated, at least 25% of the contract
      volume,”

    

    
      	
              5.

            	
              Compliance
                with Regulations

            

    

    

    The
      first
      sentence shall be replaced by the following wording:

    

    “Supplier
      and customer shall ensure that they will in good time exchange all information
      relevant to the performance of the contractual obligations, as well of
Customers'
      intended use of Contract Products.”

    

    
      	
              6.

            	
              Modification
                Requests

            

    

    

    Section
      6.2 shall be amended in the last sentence as follows:

    

    “Supplier
      shall bear all costs incurred in connection with such changes, as far as such
      changes are in the sole interest of Supplier and not connected to any
      production
      transfer already agreed or to be agreed between the parties in
      writing.”

    

    
       

      Page
        2 of
        5

      

        
          
            
              ©
                2006 Schaeffler KG, All rights reserved

              Level:
                03/2006

            

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

    

    
      	
              7.

            	
              Prices/Payment
                Terms/Invoices

            

    

    

    In
      Section 7.1 sentence two shall be modified as follows:

    

    “Unless
      otherwise agreed upon payment will be made within 30 days net.”

    

    The
      last
      sentence of section 7.1 shall be amended as follows:

    

    “Supplier
      agrees to participate in a credit note procedure in case both parties agree
      on
      such a procedure.”

    

    Section
      7.4 shall be deleted.

    

    
      	
              8.

            	
              Spare
                Parts

            

    

    

    Section
      8.1 shall be amended as follows:

    

    “In
      case
      Supplier is not able to ensure the foregoing, Supplier shall in agreement with
      Customer
      produce the life time volume of the relevant Contract Product in advance on
      stock or Supplier shall offer the relevant tooling to Customer.”

    

    
      	
              9.

            	
              Delivery
                Terms/Packaging

            

    

    

    Secton
      9.5 shall be modified in the first sentence as follows:

    

    “The
      Contract Products shall be packed in conformity with the then effective
      Packaging Manual of Customer and packaging will be invoiced separately to
Customer.”

    

    
      	
              10.

            	
              Delivery
                Dates/Delivery Default

            

    

    

    Sentence
      7 shall be modified as follows:

    

    “A
      penalty of 0,5% will be charged for each week or part of week, beginning
      with the second
      week of delay,
      the
      maximum penalty is 5% of the total order value.”

    

     

    Page
      3 of
      5

    
       

      
        
          
            
              ©
                2006 Schaeffler KG, All rights reserved

              Level:
                03/2006

            

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

    

    
      	
              12.

            	
              Inspection
                of Incoming Contract
                Products

            

    

    

    The
      last
      sentence shall be modified as follows:

    

    “If
      defects ... shall be entitled to return the entire lot.”

    

    
      	
              14.

            	
              Liability
                for Product Defects/Costs

            

    

    

    In
      section 14.1 the second sentence shall be amended as follows:

    

    “...,
      following notification of the Supplier, to start emergency actions and to remedy
      the defects itself or have them remedied by a third party after consultation
      with Supplier.”

    

    In
      section 14.4 the first sentence shall be amended as follows:

    

    “....
      any
      defects (according to section 434 clause 1 sentence 1 German Civil Code
(BGB))
      that arise....”.

    

    
      	
              17.

            	
              Reporting
                Duties

            

    

    

    Sentence
      two shall be modified as follows:

    

    “In
      particular, ... in a reasonable form, all information ....”

    

    
      	
              21.

            	
              Tools

            

    

    

    shall
      be
      deleted

    

    
      	
              22.

            	
              Software

            

    

    

    shall
      be
      deleted

     

     

    
      Page
        4 of
        5

      

        
          
            
              ©
                2006 Schaeffler KG, All rights reserved

              Level:
                03/2006

            

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

    

    
      	
              25.

            	
              Termination
                for Cause

            

    

    

    shall
      be
      modifed and amended as follows:

    

    “...
      Termination for cause shall include any of the following:

    

    -
      Suppliers'
      failure, despite Customers' notice, on repeated occasions to deliver the
      Contract Products in compliance with the agreement of the Parties

    

    -
      Suppliers'
      failure to remedy a failure, as detected during an audit, to produce the
Contract
      Products in accordance with the quality norms specified by Customer within
      a
      reasonable period of time

    

    -
      (unchanged)

    

    -
      Supplier
      directly or indirectly acquires, or becomes aquired by, or merged with a
competitor
      of Customer or otherwise becomes controlled by, or aquires control over
such
      competitor

    

    Supplier
      shall have the right to terminate in writing for cause this Master Agreement
      and/or
      any agreements made by the Parties with respect to the supply of Contract
Products,
      without being required to provide any advance notice. Termination for
cause
      shall include any of the following:

    

    -
      Customers
      failure, despite suppliers notice on repeated occasions to pay Suppliers
invoices
      for delivered products in compliance with the agreement of the
      parties

    

    -
      Customers
      serious breach of a material obligation, including but not limited to the
agreement
      on commercial terms dated [......].

    

    

    All
      other
      regulations of the Master Agreement shall remain unaffected.

    

    
      	
              place,
                date

            	 	
              Herzogenaurach,

            
	 	 	 
	
              Supplier

            	 	
              Schaeffler
                KG

            
	 	 	 
	
              /s/
                illegible

            	 	
              /s/
                illegible

            

    

    

    

    
      Page
        5 of
        5

      

        
          
            
              ©
                2006 Schaeffler KG, All rights reserved

              Level:
                03/2006

            

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

       

    

    
      	
              1.

            	
              Commercial
                terms to the Supply
                Agreement

            

    

     

    between
      NN Europe ApS/ NN Inc., ball and roller division

    

    and

     

    Schaeffler
      KG

    

      
        	
                1.

              	
                Contract
                  duration

              

      

      
        	 	
                24
                  month,

              	
                1.period
                  from 1.07.06 through 30.06.07

              

      

      2.period
        from 1.07.07 through 30.06.08

      

      
        	
                2.

              	
                Volumes
                  (minimum purchasing volumes)

              

      

      
        	 	
                Europe:

              	
                1.period

              	
                approx.
                  € [redacted*]

              

      

      
        	 	
                2.period

              	
                approx.
                  € [redacted*]

              

      

    

     

    The
      european volumes are based on the EU 25 GDP growth of
      [redacted*]% and remain stable until a GDP of [redacted*] % is reached.
Below
      a
      EU 25 GDP of [redacted*] %, the volumes are reduced
      by [redacted*]
      %
      per[redacted*]1% reduction of GDP, until the limit of € [redacted*]
of
      sales
      volume per period. The GDP is calculated as an average
      of 12 month period.

    

    North
      Amerika:

    
      
        	 	
                1.
                  period

              	
                US
                  $ [redacted*]

              

      

      
        	 	
                2.
                  period

              	
                US
                  $ [redacted*]

              

      

       

      *Information
        omitted and submitted separately to the Commission under Rule 24b-2

       

    

    
      
        04/01/2007

        
        

      

      
        Page
          1

        
          

        

      

      
        
        

      

    

    
      	
              3.

            	
              Pricing
                Europe

            

    

    Based
      on
      actual pricelists, price reductions are offered as follows

     

     [redacted*]

    

    NN
      will
      start sample production of Hub Balls in their slovakian
      plant within the second half of 2006, After PPAP of
      balls,
      Schaeffler KG will have 6 month to release these balls.
      If
      production release is in time, price reductions are as above.

    If
      balls
      can not be successfully released within 6 month period,
      due to reasons that are under Schaeffler's and Schaeffler
      costumers responsability, the [redacted*]

     

    NN
      commits oneself to provide a detailed time schedule for this
      shifting to Slovakia, at least 3 month before the first movement.

    The
      concerned hub ball sizes are:

    10.5
      mm,
      11.112 mm, 11.5 mm, 13.494 mm and 14.288 mm.

    

    
      	
              4.

            	
              Pricing
                North America

            

    

     

    
      *Information
        omitted and submitted separately to the Commission under Rule
        24b-2

    
      
        04/01/2007

        
        

      

      
        Page
          2

        
          

        

      

      
        
        

      

    

    Based
      on
      actual pricelist all prices remain stable during the duration
      of the contract, except two hub balls. From 1.07.06 the following prices are
      applied:

     

    
      	
              Size
                [redacted*]mm G 16: 

            	
              US
                $[redacted*]per 1000 

            
	
              Size
                [redacted*]mm G 16: 

            	
              US
                $ [redacted*]per 1000 

            

    

    

    For
      all
      north american prices the steel price impact is only twice
      a
      year taken into consideration: January, 1 and July, 1, based
      on
      average price of first half 2006.

    

    
      	
              5.

            	
              Volume
                rebate

            

    

    

    NN
      will
      pay a volume rebate of 1 % of total, in 12 month period
      achieved sales volume to Schaeffler, when the defined minimum
      purchasing volumes in Europe for the different periods
      are reached acording § 2:

     

    
      	
              Period
                1: 

            	
              €
                [redacted*]  

            
	
              Period
                2: 

            	
              €
                [redacted*]  

            

    

    

    Those
      volumes are fix and depend only from the discontinued NN
      production (basis € [redacted*]), but not from EU 25 GDP rate
      (§
2). The
      volume rebate is payable in the month after period ending.

    

    
      	
              6.

            	
              Extraordinary
                rebate

            

    

    

    NN
      will
      pay an extraordinary rebate of 5 % on european turnover
      in excess of € [redacted*] for the calendar year 2007 and
      in
      excess of € [redacted*] for the first half of 2008.

     

    
      *Information
        omitted and submitted separately to the Commission under Rule
        24b-2

    

    
      
        04/01/2007

        
        

      

      
        Page
          3

        
          

        

      

      
        
        

      

    

    Those
      volumes are fix and depend only from the discontinued NN
      production (basis € [redacted*]), but not from EU 25 GDP rate.

    The
      extraordinary rebate is payable in the month after period ending.

    

    
      	
              7.

            	
              Steel
                Price Europe

            

    

    

    NN
      will
      apply a [redacted*] % price reduction on all european volumes
      effective 1.01.07, under the condition that there are no base
      price increases in 2007 and the quarter 1/2006 scrap costs will
      remain in place for the balance of 2006 (reference: index FERRAILLES
      E8).

    Reference
      point for all steel price effects are steel base prices and scrap surcarges
      (E8)
      at first quarter 2006.

    All
      price
      reductions or increases refer to the [redacted*] % under stable
      conditions.

    

    In
      general, steel price effects can only be taken into consideration
      at the beginning of a quarter: January, 1., April, 1., July,
      1.
      and October, 1.

    

    
      	
              8.

            	
              Terms
                of payment

            

    

    

    payment
      will be made within 30 days net after receiving of invoice

    

    
      	
              9.

            	
              Terms
                of shipment

            

    

    

    The
      shipment will be DDU according INCO Terms

     

    
      *Information
        omitted and submitted separately to the Commission under Rule
        24b-2

    

    
      
        04/01/2007

        
        

      

      
        Page
          4

        
          

        

      

      
        
        

      

    

    

      
        	
                10.

              	
                Exit
                  of NN products

              

      

    

    

    NN
      commits to secure supply of the Products covered by this agreement
      for the duration of the agreement. If, for any reason,
      NN should desire to exit production of any of the Products
      or transfer the manufacturing to another NN factory, NN must provide to
      Schaeffler one of the following solutions upon
      mutual agreement

    

    
      	 	
              1.

            	
              In
                case of a transfer of the manufacturing to another NN facility
                NN supplies the products after submission and approval
                of requested samples. NN to bear the cost of product
                testing and approval in the amount of max, € 50.000 for fourteen (14)
                automotive applications according
                attachment 1. (except aerospace
                applications,)

            

    

    
      	 	
              2.

            	
              NN
                will provide to Schaeffler a minimum of 6 months notice
                of the stoppage of supply of specific products which allows Schaeffler
                the
                opportunity to resource the business
                to another supplier or Schaeffler's in-house production,
                except 13 part numbers already comunicated according attachment 2.
                The
                foregoing is not applicable for
                aerospace applications.

            

    

    
      
        	 	
                3.

              	
                Special
                  ease aerospace: Following notification of minimum
                  3 month time to exit of production,or such shorter time as the
                  parties
                  shall agree given conditions, NN
                  will make its best efforts to make the aerospace ball manufacturing
                  assets available to Schaeffler at fair market
                  value to allow Schaeffler to convert this Product to
                  in-house production.

              

      

    

     

    
      
        04/01/2007

        
        

      

      
        Page
          5

        
          

        

      

      
        
        

      

    

    
      	
              11.

            	
              General
                issues

            

    

    

    This
      document is the commercial basis for the cooperation of both
      companies for the next 24 month beginning 1.07.06. It is valid after
      signing.

    In
      parallel both parties declare to work out a “general supply agreement”
      and a “Quality Asurance Agreement”, that should be
      the
      guideline for the further cooperation independent from these
      commercial conditions.

    

    Herzogenaurach,
      05.01.2007

    

    
      	
              NN
                Europe

            	 	
              Schaeffler
                KG

            
	 	 	 
	
              /s/
                illegible

            	 	
              /s/
                illegible

            

    

     

    
      
        04/01/2007

        
        

      

      
        Page
          6

        
          

        

      

      
        
        

      

    

    SCHAEFFLER
      GROUP

     

    Attachment
      -1- to commercial terms of the Supply agreement NN

     

     [table redacted*]

     

     

    
      *Information
        omitted and submitted separately to the Commission under Rule
        24b-2

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Attachment
      -2- to commercial terms of the Supply agreement NN

    

    [table
      redacted*]

     

     

    
      *Information
        omitted and submitted separately to the Commission under Rule
        24b-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}]]