Exhibit 4.2
OWENS-ILLINOIS, INC.
$350,000,000 7.15% Senior Notes due 2005
Officers' Certificate Pursuant to Section 2.01 of the Indenture
The undersigned officers of Owens-Illinois, Inc., a Delaware corporation
(the "Company"), pursuant to the authority granted such officers pursuant to
resolutions duly adopted by the Board of Directors of the Company on March 4,
1998 (the "Resolutions"), hereby establish a series of the Company's Securities
(as defined and provided for in the Indenture (the "Indenture") dated as of May
20, 1998 between the Company and The Bank of New York, as Trustee, designated as
the "7.15% Senior Notes due May 15, 2005," and hereby certify, pursuant to
Section 2.01 of the Indenture, as follows:
1. Form of Note. Attached hereto as Annex A is a true and correct copy of
a specimen Note (the "Form of Note") representing the Company's 7.15% Senior
Notes due May 15, 2005 (the "Notes").
2. Terms of the Notes. The terms of the Notes are as follows:
(a) The title of the Notes to be issued as a series of Securities
(as defined in the Indenture) under the Indenture shall be the
"7.15% Senior Notes due 2005";
(b) The aggregate principal amount of the Notes that may be
authenticated and delivered under the Indenture shall be
limited to $350,000,000 (except for Notes authenticated and
delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Article 2 and
Section 9.04 of the Indenture);
(c) The Notes shall be issued at a price equal to 99.817% of the
aggregate principal amount thereof;
(d) The principal of the Notes shall be payable on May 15, 2005;
(e) The Notes shall bear interest at a rate equal to 7.15% per
annum; interest on the Notes shall accrue from May 20, 1998 or
from the most recent interest payment date to which interest
has been paid or provided for, as the case may be; interest on
the Notes shall be payable semi-annually on May 15 and
November 15 of each year until maturity,
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commencing on November 15, 1998; and interest on the Notes
shall be payable to holders of record on the May 1 or November
1 immediately preceding the applicable interest payment date;
(f) The place or places where the principal of and any interest on
the Notes shall be payable shall be as set forth in the Notes,
the form of which is attached hereto as Annex A;
(g) The Notes shall not be subject to redemption at the option of
the Company prior to maturity;
(h) The Company shall not be obligated to redeem or purchase the
Notes pursuant to any sinking fund or at the option of any
holder thereof prior to maturity;
(i) The Notes shall be issued in denominations of $1,000 and any
integral multiple thereof;
(j) 100% of the principal amount thereof shall be payable upon
declaration of acceleration of the maturity thereof pursuant
to Section 6.02 of the Indenture;
(k) In addition to the covenants and provisions set forth in
Article 4 and Article 5 of the Indenture, the Notes shall
include the additional covenants and provisions set forth in
Section 3 of this Officers' Certificate;
(l) In addition to the Events of Default set forth in Section 6.01
of the Indenture, the Notes shall include the additional Event
of Default set forth in Section 4 of this Officers'
Certificate;
(m) The Trustee for the Notes shall be The Bank of New York;
(n) The Notes shall be issued initially in the form of two Global
Notes ("Global Notes") in definitive, fully registered form
without interest coupons in substantially the form of Annex A,
which shall be deposited on behalf of the purchasers of the
Notes represented thereby with the Trustee, at its principal
corporate trust office in New York City, as custodian for the
Depositary, and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee where so provided. The aggregate
principal amount of the Global Notes may from time to time be
increased or decreased by adjustments made on the records of
the Trustee and the Depositary or its nominee in accordance
with the Depositary's procedures and as provided in Section
2.13 of the Indenture. Except as provided in Section 2.13 of
the Indenture, owners
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of beneficial interests in Global Notes shall not be entitled
to receive physical delivery of certificated Notes. The
Depositary for such Global Notes shall be The Depository Trust
Company;
(o) The Notes shall not be secured by any collateral;
(p) The Notes shall not be guaranteed by any person;
(q) The Notes shall be senior unsecured obligations of the Company
and shall rank pari passu in right of payment with all
existing and future senior unsecured indebtedness of the
Company and senior in right of payment to all subordinated
indebtedness of the Company;
(r) The provisions of Section 8.03 and 8.04 of the Indenture shall
be applicable to the Notes; and
(s) In addition to the definitions set forth in Article 1 of the
Indenture, the Notes shall include the definitions set forth
in Section 5 of this Officers' Certificate.
3. Additional Covenants and Provisions.
A. In addition to the covenants set forth in Article 4 of the
Indenture, the Notes shall include the following additional covenants:
"4.08. Limitation on Transactions with Affiliates
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, make any loan, advance, guaranty or capital contribution
to, or for the benefit of, or sell, lease, transfer or otherwise dispose of any
of its properties or assets to, or for the benefit of, or purchase or lease any
property or assets from, or enter into or amend any contract, agreement, or
understanding with, or for the benefit of, any Affiliate of the Company (each,
an "Affiliate Transaction") involving aggregate consideration in excess of $5.0
million for any one transaction, except on terms that are no less favorable to
the Company or the relevant Subsidiary, as the case may be, than those that
could have been obtained in a comparable transaction on an arm's length basis
from a person that is not such a holder or Affiliate.
The foregoing limitation does not limit, and shall not apply to, (i)
transactions (x) in respect of which the Company or such Subsidiary delivers to
the Trustee a written opinion of a nationally recognized investment banking,
accounting, appraisal or consulting firm stating that the transaction is fair to
the Company or such Subsidiary from a financial point of view or (y) approved by
a majority of the disinterested members of the Board of Directors of the Company
or, if there are no such directors, a majority of the directors of the Company,
(ii) the payment of reasonable and customary regular fees paid to, and indemnity
provided on behalf of, officers, directors, employees and consultants to the
Company or its Subsidiaries,
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(iii) payments or loans to officers, directors and employees of the Company for
business or personal purposes and other loans and advances to such officers,
directors and employees for travel, entertainment, moving and other relocation
expenses made in the ordinary course of business of the Company and its
Subsidiaries, (iv) the payment by the Company or any of its Subsidiaries to KKR
and its Affiliates of (1) fees for any financial, advisory, financing,
underwriting or placement services or in respect of other investment banking
activities, including without limitation, in connection with acquisitions or
divestitures, which payments are approved by a majority of the Board of
Directors of the Company and (2) annual management, consulting and advisory fees
and related expenses, (v) any agreement in effect as of the Closing Date or any
amendment thereto (so long as such amendment is not disadvantageous to the
Holders in any material respect) or any transaction contemplated thereby, (vi)
transactions with customers, clients, suppliers or purchasers or sellers of
goods or services, in each case in the ordinary course of business which are
fair to the Company or its Subsidiaries, in the reasonable determination of the
Board of Directors of the Company or the senior management thereof and (vii)
transactions between or among any of the Company and its Subsidiaries.
4.09. Limitation on Liens
The Company will not, and will not permit any Subsidiary to, create,
incur, assume or suffer to exist any Lien on any of its assets or properties of
any character, or any shares of Capital Stock or Indebtedness of any of its
Subsidiaries held by the Company or any of its Subsidiaries in order to secure
any Indebtedness of the Company, without making effective provision for all of
the Notes and all other amounts due under the Indenture relating to the Notes to
be directly secured equally and ratably with (or, if the Indebtedness to be
secured by such Lien is subordinated in right of payment to the Notes, prior to)
the Indebtedness secured by such Lien.
The foregoing limitation does not apply to: (i) Liens existing on the
Closing Date; (ii) Liens granted after the Closing Date on any assets or
properties of the Company or its Subsidiaries, or any shares of Capital Stock or
Indebtedness of any of its Subsidiaries held by the Company or any of its
Subsidiaries, securing Indebtedness of the Company created in favor of the
Holders; (iii) Liens securing Indebtedness which is incurred to refinance
Indebtedness which is secured by Liens permitted to be incurred under the
Indenture; provided that such Liens do not extend to or cover any property or
assets of the Company or any of its Subsidiaries other than the property or
assets securing the Indebtedness being refinanced; or (iv) Permitted Liens.
4.10. Investments in Unrestricted Subsidiaries
The Company will not make, and will not permit any of its Subsidiaries to
make, any Investments in Unrestricted Subsidiaries if, at the time thereof, the
aggregate amount of such Investments would exceed the sum of $150,000,000.
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4.11. Payments for Consent
Neither the Company nor any Subsidiary of the Company shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of these Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of the
Indenture or these Notes unless such consideration is offered to be paid or
agreed to be paid to all Holders of these Notes which so consent, waive or agree
to amend in the time frame set forth in solicitation documents relating to such
consent, waiver or agreement."
4.12. Intercreditor Agreement
If the Company executes the Pledge Agreements and the Intercreditor
Agreement pursuant to the terms of the Amended Bank Credit Agreement, the
Trustee shall deliver to the collateral agent under the Pledge Agreements an
acknowledgement to the Intercreditor Agreement and shall execute such further
documents and instruments as may be necessary or desirable to create in favor of
the collateral agent under the Pledge Agreements a valid and perfected first
priority Lien on any collateral pledged pursuant to the Pledge Agreements.
B. In addition to the provisions set forth in Section 5.01 of the
Indenture, the Notes shall include the following additional provision:
"Notwithstanding Section 5.01 of the Indenture, any Subsidiary of the
Company may consolidate with, merge into or transfer all or part of its
properties and assets to the Company."
4. Additional Events of Default. In addition to the Events of Default set
forth in Section 6.01 of the Indenture, the Notes shall include the following
additional Event of Default:
"(6) except as a result of compliance with any court order to which the
Company is subject or any applicable law or any government decree, if an event
of default as defined in any mortgage, indenture or instrument, under which
there may be issued, or by which there may be secured or evidenced, any
Indebtedness of the Company (including a default under the Indenture with
respect to Securities of any series other than the Notes) whether such
Indebtedness now exists or shall hereafter be created, shall happen and shall
result in such Indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise become due and payable, and such
acceleration shall not have been rescinded or annulled by the holders of such
Indebtedness within 10 days after written notice to the Company from the Trustee
or to the Company and to the Trustee from the Holders of not less than a
majority of the principal amount of the Notes then outstanding under the
Indenture; provided, however, that it shall not be a default hereunder if the
principal amount of Indebtedness the maturity of which is so accelerated is less
than $125,000,000, individually or in the aggregate; and provided, further, that
if, prior to a declaration of acceleration of the Maturity of such Notes then
outstanding or the entry of judgment in favor of the Trustee in a suit pursuant
to Section 6.08 of the Indenture, such default shall be remedied or cured by the
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Company or waived by the holders of such Indebtedness, or such Indebtedness
shall be discharged, then the default hereunder by reason thereof shall be
deemed likewise to have been thereupon remedied, cured or waived without further
action upon the part of either the Trustee or any of the Holders of such Notes."
5. Additional Definitions. In addition to the definitions set forth in
Article 1 of the Indenture, the Notes shall include the following additional
definitions, which, in the event of a conflict with the definition of terms in
the Indenture, shall control:
"Affiliate" means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities, by
contract or otherwise.
"Bank Credit Agreement" means the Second Amended and Restated Credit
Agreement dated as of April 30, 1998 among the Company, certain of its
subsidiaries, Bankers Trust Company, as Administrative Agent, and the managing
agents, co-agents, lead managers, arrangers and the other agents and lenders
party thereto, as such agreement may be amended (including any amendment and
restatement thereof), supplemented or otherwise modified from time to time.
"Capitalized Lease Obligation" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) by that Person as lessee
which, in conformity with GAAP, is required to be accounted for as a capital
lease on the balance sheet of that Person.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock.
"Closing Date" means the date on which the Notes are originally issued
under the Indenture.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any of its Subsidiaries against fluctuations in currency values.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means, subject to certain provisions of the Indenture, generally
accepted accounting principals set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by
a significant segment of the accounting profession, which are applicable to the
circumstances as of the Closing Date.
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"Indebtedness" of any Person means, without duplication, with respect to
any Person, any indebtedness, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements with respect thereto) or representing the
balance deferred and unpaid of the purchase price of any property (including
pursuant to Capitalized Lease Obligations), except any such balance that
constitutes an accrued expense or trade payable, if and to the extent any of the
foregoing indebtedness would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP (but does not include contingent
liabilities which appear only in a footnote to a balance sheet), and shall also
include, to the extent not otherwise included, the guaranty by such Person of
items which would be included within this definition, obligations in respect of
Currency Agreements and Interest Rate Agreements and the maximum fixed
repurchase price of any Redeemable Stock. For purposes of the preceding
sentence, the maximum fixed repurchase price of any Redeemable Stock which does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Redeemable Stock as if such Redeemable Stock were repurchased on
any date of determination, provided that if such Redeemable Stock is not then
permitted to be repurchased, the repurchase price shall be the book value of
such Redeemable Stock.
"Intercreditor Agreement" means the Intercreditor Agreement to be entered
into under certain circumstances pursuant to subsection 5.8 of the Bank Credit
Agreement, substantially in the form of Exhibit XXII thereto, as such
Intercreditor Agreement may thereafter be amended, supplemented or otherwise
modified from time to time.
"Interest Rate Agreements" means the obligations of any Person pursuant to
any interest rate swap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to protect such Person or any of its
Subsidiaries against fluctuations in interest rates.
"Investment" means any direct or indirect advance, loan (other than
advances to customers in the ordinary course of business, which are recorded as
accounts receivable on the balance sheet of any Person or its Subsidiaries) or
other extension of credit or capital contribution to (by means of any transfer
of cash or other property to others or any payment for property or services for
the account or use of others), or any purchase or acquisition of Capital Stock,
bonds, notes, debentures or other securities issued by any other Person. For the
purposes of the definition of "Unrestricted Subsidiary" and Section 4.10 set
forth in Section 3 of this Officers' Certificate, (i) the amount of any
"Investment" shall be the fair market value of the net assets of any Subsidiary
of the Company at the time that such Subsidiary is designated an Unrestricted
Subsidiary and shall exclude the fair market value of the net assets of any
Unrestricted Subsidiary that is designated a Subsidiary of the Company and (ii)
any property transferred to or from any Unrestricted Subsidiary shall be valued
at fair market value at the time of such transfer, in each case as determined by
the Board of Directors of the Company in good faith.
"KKR" means Kohlberg Kravis Roberts & Co., L.P.
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"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including, without limitation, any conditional sale or other
title retention agreement or lease in the nature thereof or any agreement to
give any security interest).
"Permitted Liens" means (i) Liens (including extensions and renewals
thereof) upon real or personal (whether tangible or intangible) property
acquired after the Closing Date; provided that (a) such Lien is created solely
for the purpose of securing Indebtedness incurred, (1) to finance the cost
(including the cost of improvement or construction) of the item of property or
assets subject thereto and such Lien is created prior to, at the time of or
within 12 months after the later of the acquisition, the completion of
construction or the commencement of full operation of such property or (2) to
refinance any Indebtedness previously so secured, (b) the principal amount of
the Indebtedness secured by such Lien does not exceed 100% of such cost and (c)
any such Lien shall not extend to or cover any property or assets other than
such item of property or assets and any improvements on such item; (ii) any
interest or title of a lessor in the property subject to any Capitalized Lease
Obligation or operating lease; (iii) Liens on property of, or on shares of
Capital Stock or Indebtedness of, any Person existing at the time such Person
becomes, or becomes a part of, the Company or any Subsidiary of the Company;
provided that such Liens do not extend to or cover any property or assets of the
Company or any Subsidiary of the Company other than the property or assets
acquired; (iv) Liens in favor of the Company or any Subsidiary; (v) Liens
securing reimbursement obligations with respect to letters of credit that
encumber documents and other property relating to such letters of credit and the
products and proceeds thereof; (vi) Liens encumbering customary initial deposits
and margin deposits, and other Liens that are either within the general
parameters customary in the industry and incurred in the ordinary course of
business, in each case, securing Indebtedness under Interest Rate Agreements and
Currency Agreements and forward contracts, options, future contracts, futures
options or similar agreements or arrangements designed solely to protect the
Company or any of its Subsidiaries from fluctuations in interest rates,
currencies or the price of commodities; (vii) Liens arising out of conditional
sale, title retention, consignment or similar arrangements for the sale of goods
entered into by the Company or any of its Subsidiaries in the ordinary course of
business of the Company and its Subsidiaries; (viii) Liens on or sales of
receivables; (ix) Liens securing the Company's obligations in respect of
bankers' acceptances issued or created to facilitate the purchase, shipment or
storage of inventory or other goods; and (x) in addition to any other Liens
permitted to be incurred pursuant to the Indenture, Liens securing Indebtedness
in an amount not to exceed $500 million.
"Pledge Agreements" means the Company Pledge Agreement and the Subsidiary
Pledge Agreement to be executed and delivered by the Company under certain
circumstances pursuant to subsection 5.8 of the Bank Credit Agreement,
substantially in the form of Exhibits XX and XXI thereto, respectively, as such
Pledge Agreements may thereafter be amended, supplemented or otherwise modified
from time to time.
"Redeemable Stock" means any equity security that by its terms or
otherwise is required to be redeemed prior to the stated maturity of the Notes,
or is redeemable at the option of the holder thereof at any time prior to the
stated maturity of the Notes.
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"Subsidiary" means any corporation, association or other business entity
of which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more of the other
Subsidiaries of that Person or a combination thereof; provided that an
Unrestricted Subsidiary shall not be deemed to be a Subsidiary of the Company
for purposes of the Indenture.
"Unrestricted Subsidiary" means (1) any Subsidiary of the Company which at
the time of determination shall be an Unrestricted Subsidiary (as designated by
the Board of Directors of the Company, as provided below) and (2) any Subsidiary
of an Unrestricted Subsidiary. The Board of Directors may designate any
Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary owns any
Capital Stock of, or owns, or holds any Liens on, any property of, the Company
or any other Subsidiary of the Company which is not a Subsidiary of the
Subsidiary to be so designated; provided that either (x) the fair market value
of the net assets of the Subsidiary to be so designated is $1,000 or less or (y)
if the fair market value of the net assets of such Subsidiary is greater than
$1,000, the amount of the Company's Investments in Unrestricted Subsidiaries at
the time of designation is less than $150,000,000. The Board of Directors may
designate any Unrestricted Subsidiary to be a Subsidiary. Any such designation
by the Board of Directors shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the resolution of the Board of Directors giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions."
6. Board Resolutions. Attached hereto as Annex B are true and correct
copies of the Resolutions; the Resolutions have not been amended, modified or
rescinded and remain in full force and effect; and the Resolutions are the only
resolutions adopted by the Company's Board of Directors or any committee thereof
relating to the Notes and the transactions related thereto.
Each of the undersigned officers further states that he has read the
provisions of such Indenture setting forth the conditions precedent to the
issuance, authentication and delivery of the Notes and the definitions relating
thereto, the Resolutions authorizing the issuance of the Notes and the Form of
Note; that the statements made in this Certificate are based upon the
examination of the provisions of such Indenture, the Resolutions and the Form of
Note; that he has, in his opinion, made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not the
conditions precedent for the issuance, authentication and delivery of the Notes
have been complied with; and that, in his opinion, such conditions have been
complied with.
[Signature page follows]
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IN WITNESS WHEREOF, said officers have signed this certificate.
Dated: May 20, 1998
/s/ Lee A. Wesselmann /s/ David G. Van Hooser
- -------------------------------- ---------------------------------------
By: Lee A. Wesselmann By: David G. Van Hooser
Title: Senior Vice President and Title: Senior Vice President, Director
Chief Financial Officer of Corporate Strategy
ANNEX A
[FORM OF NOTE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO HEREIN.
OWENS-ILLINOIS, INC.
7.15% SENIOR NOTES DUE 2005
Number: 1 CUSIP No. 690768 BE 5 $200,000,000
OWENS-ILLINOIS, INC., a Delaware corporation (the "Company"), for
value received, hereby promises to pay to Cede & Co., as nominee of The
Depository Trust Company, or registered assigns, the principal sum of TWO
HUNDRED MILLION DOLLARS on May 15, 2005.
Interest Payment Dates: May 15 and November 15.
Record Dates: May 1 and November 1.
Additional provisions of this Security are set forth below following
the signatures of the authorized officers of the Company.
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IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
OWENS-ILLINOIS, INC.
By:
----------------------------
Name: David G. Van Hooser
Title: Senior Vice President, Director
of Corporate Strategy
By:
----------------------------
Name: James W. Baehren
Title: Associate General Counsel and
Assistant Secretary
Dated: May 20, 1998
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK, as Trustee
By:
--------------------------------
Authorized Signatory
OWENS-ILLINOIS, INC.
7.15% SENIOR NOTES DUE 2005
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. Interest
OWENS-ILLINOIS, INC., a Delaware corporation (such entity, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above. Interest on the Securities shall
accrue from May 20, 1998 or from the most recent interest payment date to which
interest has been paid or provided for, as the case may be; interest on the
Securities shall be payable semi-annually on May 15 and November 15 of each year
until maturity, or, if such day is a Legal Holiday, on the next succeeding day
that is not a Legal Holiday (each, an "Interest Payment Date"), commencing on
November 15, 1998; and interest on the Securities shall be payable to holders of
record on the May 1 or November 1 immediately preceding the applicable Interest
Payment Date. Interest will be computed on the basis of a 360-day year of twelve
30-day months. The Company shall pay defaulted interest on overdue interest,
plus (to the extent lawful) any interest payable on the defaulted interest, as
provided in Section 2.11 of the Indenture.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are holders ("Holders") of record in the security
register of the Company (the "Security Register") of Securities at the close of
business on the May 1 or November 1 (each, a "Record Date") next preceding the
Interest Payment Date, in each case even if the Securities are cancelled solely
by virtue of registration of transfer or registration of exchange after such
Record Date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. Principal of, premium, if any, and interest on the Securities
will be payable, and the Securities may be exchanged or transferred, at the
office or agency of the Company in the Borough of Manhattan, the City of New
York (which initially will be the Corporate Trust Office of the Trustee);
provided that, at the option of the Company, payment of interest may be made by
check mailed to the address of each Holder as such address appears in the
Security Register.
3. Paying Agent and Registrar
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-Registrar without notice to any Holder.
The Company or
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any of its Affiliates may act as Paying Agent, Registrar or co-Registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of May
20, 1998 by and between the Company and the Trustee, the terms of which have
been established in an Officers' Certificate, dated May 20, 1998, pursuant to
Section 2.01 of the Indenture (collectively, the "Indenture"). The Securities
are a series designated as the "7.15% Senior Notes due 2005" of the Company,
limited in aggregate principal amount to $350,000,000. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on May 20, 1998 (the "TIA"). The Securities are
subject to all such terms, and Securityholders are referred to the Indenture and
the TIA for a statement of those terms. Any conflict between the terms of this
Security and the Indenture will be governed by the Indenture.
The Securities are senior unsecured obligations of the Company and
rank pari passu in right of payment with all existing and future senior
unsecured indebtedness of the Company, and senior in right of payment to all
subordinated indebtedness of the Company.
The Indenture imposes certain limitations on the Company's and its
Subsidiaries' ability to enter transactions with Affiliates, to create or incur
certain Liens on any of its assets or properties or any shares of Capital Stock
or Indebtedness of any Subsidiary, to make Investments in Unrestricted
Subsidiaries, to consolidate or merge, or transfer all or substantially all of
its property or assets, and to pay any fees to Holders for or as an inducement
to any consent, waiver or amendment of the Indenture.
5. Optional Redemption
The Securities may not be redeemed at the option of the Company
prior to maturity.
6. Sinking Fund
The Securities will not be subject to the operation of any sinking
fund.
7. Denominations; Transfer; Exchange
The Securities are in registered form, without coupons, in
denominations of $1,000 of principal amount and any integral multiple thereof. A
Holder may transfer or exchange Securities in accordance with the Indenture. No
service charge will be made for any registration of transfer or exchange of
Securities, but the Company may require the
3
payment of a sum sufficient to cover any transfer tax or other similar
governmental charge payable in connection therewith, subject to and as permitted
by the Indenture.
8. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
9. Repayment to Company
The Trustee and the Paying Agent shall pay to the Company upon the
Company's request any money held by them for the payment of principal or
interest that remains unclaimed for two years after the date upon which such
payment shall have become due. After payment to the Company, Securityholders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another Person.
10. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money and/or U.S. Government Obligations for
the payment of principal and interest on the Securities to maturity.
11. Defaults and Remedies
Under the Indenture, Events of Default include (a) failure to pay
the principal of, or premium, if any, on such Securities when due and payable;
(b) failure to pay any interest on such Securities when due, continued for 30
days; (c) failure to perform or observe any other agreements of the Company in
such Indenture, including failure to comply with the provisions of the Indenture
applicable to consolidation, merger and sale of assets of the Company, continued
for 60 days after written notice; (d) acceleration of $125,000,000 or more,
individually or in the aggregate, in principal amount of Indebtedness of the
Company under the terms of the instrument under which such indebtedness is
issued or secured, except as a result of compliance with applicable laws, orders
or decrees, if such Indebtedness shall not have been discharged or such
acceleration is not annulled within ten days after written notice; and (e)
certain events of bankruptcy, insolvency or reorganization.
If an Event of Default (other than an Event or Default relating to
certain events of bankruptcy, insolvency or reorganization) shall occur and be
continuing, either the Trustee or the holders of at least 50% in principal
amount of the outstanding Securities by notice, as provided in the Indenture,
may declare the unpaid principal amount of, and any accrued and
4
unpaid interest on, the Securities to be due and payable immediately. However,
at any time after a declaration of acceleration with respect to the Securities
has been made, the holders of a majority in principal amount of the outstanding
Securities of such series may, under certain circumstances, rescind and annul
such acceleration if the rescission would not conflict with any judgment or
decree and if all existing Events of Default with respect to such Securities
have been cured or waived except nonpayment of principal (or such lesser amount)
or interest that has become due solely because of the acceleration.
Subject to the duty of the Trustee during an Event of Default to act
with the required standard of care, the Trustee is under no obligation to
exercise any of its rights or powers under the Indenture at the request or
direction of any of the holders, unless such holders shall have offered to the
Trustee reasonable security or indemnity. Subject to certain provisions,
including those requiring security or indemnification of the Trustee, the
holders of a majority in principal amount of the outstanding Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, with respect to the Securities.
12. Supplements, Amendments and Waivers
Subject to certain exceptions, the Company and the Trustee may amend
the Indenture or the Securities with the written consent of the holders of a
majority in principal amount of the then outstanding Securities. The holders of
a majority in principal amount of the then outstanding Securities may also waive
compliance in a particular instance by the Company with any provision of the
Indenture with respect to the Securities; provided, however, that certain
amendments or waivers may not be made without the consent of each holder of
Securities affected as provided in the Indenture.
The Company and the Trustee may amend the Indenture or the
Securities without notice to or the consent of any holder of Securities in
certain circumstances described in the Indenture.
The holders of a majority in principal amount of the outstanding
Securities, by notice to the Trustee, may waive an existing Default or Event of
Default and its consequences except a Default or Event of Default in the payment
of the principal of, or any interest on, the Securities (provided, however, that
the holders of a majority in principal amount of the outstanding Securities may
rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration).
13. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or
5
its Affiliates and may otherwise deal with the Company or its Affiliates with
the same rights it would have if it were not Trustee.
14. No Recourse Against Others
A past, present or future director, officer, employee, stockholder
or incorporator, as such, of the Company or any successor corporation shall not
have any liability for any obligations of the Company under this Security or the
Indenture or for any claim based on, in respect of, or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration of issuance of the Securities.
15. Governing Law
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE
INDENTURE AND THE SECURITIES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
16. Successors and Assigns.
All covenants and agreements of the Company in the Indenture and the
Securities shall bind its successors and assigns. All agreements of the Trustee
in the Indenture shall bind its successor.
17. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication hereon.
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on
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the Securities, and the Trustee may use CUSIP numbers in notices as a
convenience to Securityholders. No representation is made as to the accuracy of
such numbers either as printed on the Securities or as contained in any notice
and reliance may be placed only on the other identification numbers placed
thereon.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture. Such requests
may be addressed to:
Owens-Illinois, Inc.
One SeaGate
Toledo, Ohio 43666
Attention: Corporate Secretary
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
[Print or type assignee's name, address and zip code]
[Insert assignee's soc. sec. or tax I.D. No.]
and irrevocably appoint [print or type agent's name] agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
_______________________________________________________________________________
Date: _____________________ Your Signature: ______________________________
Signature Guarantee: __________________________________________________________
(Signature must be guaranteed)
_______________________________________________________________________________
(Sign exactly as your name appears on the face of this Security)