S-4

     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 5, 2002
                                                           REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                           --------------------------
                                    FORM S-4

                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                               ------------------

                           OWENS-ILLINOIS GROUP, INC.
                      OWENS-BROCKWAY GLASS CONTAINER INC.

    SUBSIDIARY GUARANTORS LISTED ON "TABLE OF GUARANTORS" ON FOLLOWING PAGE.
                           --------------------------

           (Exact Name of Registrants as Specified in Their Charters)

                                  ONE SEAGATE
                               TOLEDO, OHIO 43666
                                 (419) 247-5000

    (Address, Including Zip Code, and Telephone Number, Including Area Code,
                  of Registrants' Principal Executive Offices)

                             THOMAS L. YOUNG, ESQ.
                  EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
                      OWENS-BROCKWAY GLASS CONTAINER INC.
                                  ONE SEAGATE
                               TOLEDO, OHIO 43666
                                 (419) 247-5000

           (Name, Address, Including Zip Code, and Telephone Number,
                   Including Area Code, of Agent for Service)
                           --------------------------

                                   Copies to:

                            TRACY K. EDMONSON, ESQ.
                                LATHAM & WATKINS
                       505 MONTGOMERY STREET, SUITE 1900
                        SAN FRANCISCO, CALIFORNIA 94111
                                 (415) 391-0600

    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this registration statement.

    If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /

    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration number for the same offering. / /

    If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier, effective registration statement
for the same offering. / /

                        CALCULATION OF REGISTRATION FEE



                                                                   PROPOSED             PROPOSED
TITLE OF EACH CLASS OF                      AMOUNT TO BE        OFFERING PRICE     AGGREGATE OFFERING      AMOUNT OF
SECURITIES TO BE REGISTERED                  REGISTERED           PER NOTE(1)           PRICE(1)        REGISTRATION FEE
                                                                                            
8 7/8% Senior Secured Notes due 2009...    $1,000,000,000            100%            $1,000,000,000         $92,000
Guarantees of the 8 7/8% Senior Secured
  Notes due 2009(2)....................        -- (2)               -- (2)               -- (2)              -- (2)


(1) Estimated solely for purposes of calculating the registration fee pursuant
    to Rule 457(f).

(2) No separate consideration will be received with respect to these guarantees
    and, therefore, no registration fee is attributable to them.

    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE SEC, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                              TABLE OF GUARANTORS



                                                           STATE OF       I.R.S. EMPLOYER
                                                        JURISDICTION OF   IDENTIFICATION
NAME                                                     ORGANIZATION         NUMBER        PSICC NUMBER
- ----                                                    ---------------   ---------------   ------------
                                                                                   
ACI America Holdings Inc..............................  Delaware            95-3827440          6719
Anamed International, Inc.............................  Nevada              88-0281258          6719
BriGam Medical, Inc...................................  North Carolina      58-1757035          3999
BriGam, Inc...........................................  North Carolina      56-1489895          3999
BriGam Ventures, Inc..................................  North Carolina      56-1842662          3999
Brockway Realty Corporation...........................  Pennsylvania        25-1422361          6531
Brockway Research, Inc................................  Delaware            22-2057496          3999
Continental PET Technologies, Inc.....................  Delaware            06-1088896          3089
MARC Industries, Inc..................................  Delaware            74-2807343          5199
Martell Medical Products, Incorporated................  California          33-0073253          3999
NHW Auburn, LLC.......................................  New York            16-1503116          4225
OB Cal South Inc......................................  Delaware            31-1500116          6719
OI AID STS Inc........................................  Delaware            22-2784146          6719
OI Auburn Inc.........................................  Delaware            34-1836936          4923
OI Australia Inc......................................  Delaware            34-1864776          6719
OI Brazil Closure Inc.................................  Delaware            34-1864772          6719
OI California Containers Inc..........................  Delaware            31-1500115          6719
OI Castalia STS Inc...................................  Delaware            22-2784161          7999
OI Consol STS Inc.....................................  Delaware            22-2784152          6719
OI Ecuador STS Inc....................................  Delaware            22-2784138          6719
OI Europe & Asia Inc..................................  Delaware            34-1818324          6719
OI General Finance Inc................................  Delaware            34-1736802          6719
OI General FTS Inc....................................  Delaware            22-2784178          6719
O-I Health Care Holding Corp..........................  Delaware            22-2784204          6719
O-I Holding Company, Inc..............................  Ohio                34-1473902          6719
OI Hungary Inc........................................  Delaware            34-1816803          6719
OI International Holdings Inc.........................  Delaware            34-1882569          6719
OI Levis Park STS Inc.................................  Delaware            22-2784158          6519
OI Medical Holdings Inc...............................  Delaware            31-1546256          6719
OI Medical Inc........................................  Delaware            51-0350206          6719
OI Peru STS Inc.......................................  Delaware            34-1730214          6719
OI Plastic Products FTS Inc...........................  Delaware            34-1559354          6719
OI Poland Inc.........................................  Delaware            34-1748755          6719
OI Puerto Rico STS Inc................................  Delaware            22-2784132          6719
OI Regioplast STS Inc.................................  Delaware            34-1743397          6719
OI Venezuela Plastic Products Inc.....................  Delaware            34-1880159          6719
OIB Produvisa Inc.....................................  Delaware            34-1576858          6719
Overseas Finance Company..............................  Delaware            34-1649746          6719
Owens-BriGam Medical Company..........................  Delaware            56-1845802          3999
Owens-Brockway Glass Container Trading Company........  Delaware            34-1766218          6719
Owens-Brockway Packaging, Inc.........................  Delaware            34-1559346          6719
Owens-Brockway Plastic Products Inc...................  Delaware            95-2097550          3089
Owens-Illinois Closure Inc............................  Delaware            22-2784127          3299
Owens-Illinois General Inc............................  Delaware            22-2784167          6719
Owens-Illinois Prescription Products Inc..............  Delaware            22-2784124          3999
Owens-Illinois Specialty Products Puerto Rico, Inc....  New Jersey          66-0414062          3089
Product Design & Engineering, Inc.....................  Minnesota           41-0751022          6719
SeaGate, Inc..........................................  Ohio                31-1300476          7389
SeaGate II, Inc.......................................  Ohio                31-1686352          7389
SeaGate III, Inc......................................  Ohio                31-1686355          7389
Specialty Packaging Licensing Company.................  Delaware            62-1256003          6719
Universal Materials, Inc..............................  Ohio                34-1349747          6719


                   SUBJECT TO COMPLETION, DATED APRIL 5, 2002
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

PROSPECTUS

                      OWENS-BROCKWAY GLASS CONTAINER INC.
                               OFFER TO EXCHANGE
                $1,000,000,000 AGGREGATE PRINCIPAL AMOUNT OF ITS
                      8 7/8% SENIOR SECURED NOTES DUE 2009
              WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT,
    FOR ANY AND ALL OF ITS OUTSTANDING 8 7/8% SENIOR SECURED NOTES DUE 2009
                               ------------------

    - The exchange offer expires at 5:00 p.m., New York City time, on       ,
      2002, unless extended.

    - We will exchange all outstanding notes that are validly tendered and not
      validly withdrawn for an equal principal amount of a new series of notes
      which are registered under the Securities Act.

    - The exchange offer is not subject to any conditions other than that it not
      violate applicable law or any applicable interpretation of the staff of
      the SEC.

    - You may withdraw tenders of outstanding notes at any time before the
      exchange offer expires.

    - The exchange of notes will not be a taxable event for U.S. federal income
      tax purposes.

    - We will not receive any proceeds from the exchange offer.

    - The terms of the new series of notes are substantially identical to the
      outstanding notes, except for transfer restrictions and registration
      rights relating to the outstanding notes.

    - You may tender outstanding notes only in denominations of $1,000 and
      multiples of $1,000.

    - Our affiliates may not participate in the exchange offer.

   PLEASE REFER TO "RISK FACTORS" BEGINNING ON PAGE 16 OF THIS PROSPECTUS FOR
A DESCRIPTION OF THE RISKS YOU SHOULD CONSIDER WHEN EVALUATING THIS INVESTMENT.

                       WE ARE NOT ASKING YOU FOR A PROXY
                 AND YOU ARE REQUESTED NOT TO SEND US A PROXY.

    We are not making this exchange offer in any state where it is not
permitted.

    NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OF THE NOTES OR DETERMINED THAT THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

                  The date of this prospectus is       , 2002.

                               TABLE OF CONTENTS



                                                                PAGE
                                                              --------
                                                           
Forward-Looking Statements..................................     ii
Prospectus Summary..........................................      1
Risk Factors................................................     16
The Exchange Offer..........................................     30
Use of Proceeds.............................................     39
Capitalization of Owens-Illinois Group, Inc.................     40
Selected Consolidated Financial Data of Owens-Illinois
  Group, Inc................................................     41
Management's Discussion and Analysis of Financial Condition
  and Results of Operations of Owens-Illinois Group, Inc....     44
Business....................................................     54
Description of Certain Indebtedness.........................     64
Description of Notes........................................     68
Certain U.S. Federal Tax Considerations.....................    118
Plan of Distribution........................................    118
Legal Matters...............................................    120
Experts.....................................................    120
Where You Can Find More Information.........................    120
Index to Financial Statements...............................    F-1


                            ------------------------

    We have not authorized any dealer, salesperson or other person to give any
information or to make any representations to you other than the information
contained in this prospectus. You must not rely on any information or
representations not contained in this prospectus as if we had authorized it.
This prospectus does not offer to sell or solicit an offer to buy any securities
other than the registered notes to which it relates, nor does it offer to buy
any of these notes in any jurisdiction to any person to whom it is unlawful to
make such offer or solicitation in such jurisdiction.

    The information contained in this prospectus is current only as of the date
on the cover page of this prospectus, and may change after that date. We do not
imply that there has been no change in the information contained in this
prospectus or in our affairs since that date by delivering this prospectus.

                         MARKET, RANKING AND OTHER DATA

    The data included in this prospectus regarding markets and ranking,
including the size of certain markets and our position, the position of
Owens-Illinois Group, Inc. and the position of our competitors and competitors
of Owens-Illinois Group, Inc. within these markets, are based on independent
industry publications, reports of government agencies or other published
industry sources and our estimates and those of Owens-Illinois Group, Inc. based
on each of our management's knowledge and experience in the markets in which we
and Owens-Illinois Group, Inc. operate. Our estimates and those of
Owens-Illinois Group, Inc. have been based on information obtained from
customers, suppliers, trade and business organizations and other contacts in the
markets in which we and Owens-Illinois Group, Inc. operate. We and
Owens-Illinois Group, Inc. believe these estimates to be accurate as of the date
of this prospectus. However, this information may prove to be inaccurate because
of the method by which we or Owens-Illinois Group, Inc. obtained some of the
data for these estimates or because this information cannot always be verified
with complete certainty due to the limits on the availability and reliability of
raw data, the voluntary nature of the data gathering process and other
limitations and uncertainties inherent in a survey of market size. As a result,
you should be aware that market, ranking and other similar data included in this
prospectus, and estimates and beliefs based on that data, may not be reliable.

                           FORWARD-LOOKING STATEMENTS

    This prospectus includes forward-looking statements. We have based these
forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are subject to risks,
uncertainties, and assumptions about us and our subsidiaries, and Owens-Illinois
Group, Inc. and its subsidiaries, including, among other things, factors
discussed under the heading "Risk Factors" and the following:

    - foreign currency fluctuations relative to the U.S. dollar;

    - change in capital availability or cost, including interest rate
      fluctuations;

    - general political, economic and competitive conditions in markets and
      countries where we have operations or sell products, including competitive
      pricing pressures, inflation or deflation, and changes in tax rates;

    - consumer preferences for alternative forms of packaging;

    - fluctuations in raw material and labor costs;

    - availability of raw materials;

    - costs and availability of energy;

    - transportation costs;

    - consolidation among competitors and customers;

    - the ability to integrate operations of acquired businesses;

    - unanticipated expenditures with respect to environmental, safety and
      health laws;

    - performance by customers of their obligations under supply agreements; and

    - timing and occurrence of events, including events related to
      asbestos-related claims against Owens-Illinois, Inc. ("OI Inc."), which
      are beyond our control.

    We caution you that although we believe that the assumptions on which the
forward-looking statements contained herein are based are reasonable, any of
those assumptions could prove to be inaccurate and, as a result, the
forward-looking statements also could be materially incorrect. In light of

                                       ii

these and other uncertainties, you should not regard the inclusion of a
forward-looking statement in this prospectus as a representation by us or
Owens-Illinois Group, Inc. that our plans and objectives or those of
Owens-Illinois Group, Inc. will be achieved, and you should not place undue
reliance on these forward-looking statements. We undertake no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed in this
prospectus might not occur.

                                      iii

                               PROSPECTUS SUMMARY

    THIS SUMMARY HIGHLIGHTS THE INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS. BECAUSE THIS IS ONLY A SUMMARY, IT DOES NOT CONTAIN ALL THE
INFORMATION THAT MAY BE IMPORTANT TO YOU. FOR A MORE COMPLETE UNDERSTANDING OF
THIS OFFERING, WE ENCOURAGE YOU TO READ THIS ENTIRE PROSPECTUS AND THE DOCUMENTS
TO WHICH WE REFER YOU. YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE
MORE DETAILED INFORMATION AND CONSOLIDATED FINANCIAL STATEMENTS AND THE NOTES TO
THOSE STATEMENTS INCLUDED ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE
SPECIFIED OR THE CONTEXT REQUIRES OTHERWISE, REFERENCE IN THIS PROSPECTUS TO:

    - "COMPANY" OR "WE," "US" OR "OUR" REFERS TO OWENS-BROCKWAY GLASS
      CONTAINER INC., THE ISSUER OF THE NOTES, AND ITS DIRECT AND INDIRECT
      SUBSIDIARIES ON A CONSOLIDATED BASIS; AND

    - "OI GROUP" REFERS TO OWENS-ILLINOIS GROUP, INC., THE INDIRECT PARENT OF
      OWENS-BROCKWAY GLASS CONTAINER INC., AND ITS DIRECT AND INDIRECT
      SUBSIDIARIES ON A CONSOLIDATED BASIS, INCLUDING OWENS-BROCKWAY GLASS
      CONTAINER INC.

    WE WILL REFER TO THE OFFERING OF THE PRIVATE NOTES AS THE "PRIVATE
OFFERING." UNLESS INDICATED OTHERWISE, THE TERM "NOTES" REFERS TO BOTH THE
PRIVATE NOTES AND THE EXCHANGE NOTES.

    INVESTORS SHOULD CAREFULLY CONSIDER THE INFORMATION SET FORTH UNDER "RISK
FACTORS." IN ADDITION, SOME STATEMENTS INCLUDE FORWARD-LOOKING INFORMATION WHICH
INVOLVES RISKS AND UNCERTAINTIES.

                           OWENS-ILLINOIS GROUP, INC.

    OI Group is one of the world's leading manufacturers of packaging products.
OI Group is the largest manufacturer of glass containers in North America, South
America, Australia and New Zealand, and one of the largest in Europe. In
addition, OI Group is a leading manufacturer in North America of plastic
containers, plastic closures and plastic prescription containers. OI Group also
has plastics packaging operations in South America, Europe, Australia and New
Zealand. Consistent with its strategy to continue to strengthen its existing
packaging businesses, OI Group has acquired 18 glass container businesses in 18
countries since 1991, including businesses in South America, Central and Eastern
Europe and the Asia Pacific region, and six plastics packaging businesses with
operations in 11 countries. OI Group had net sales of approximately
$5.6 billion and $5.4 billion, and Adjusted EBITDA (as defined on page 15) of
approximately $1.4 billion and $1.3 billion, for the years ended December 31,
2000 and 2001, respectively.

    OI Group believes it is a technological leader in the worldwide glass
container and plastics packaging segments of the rigid packaging market. During
the five years ended December 31, 2001, OI Group invested more than
$2.3 billion in capital expenditures (excluding acquisitions) and more than
$342.0 million in research, development and engineering to, among other things,
improve labor and machine productivity, increase capacity in growing markets and
commercialize technology into new products.

                      OWENS-BROCKWAY GLASS CONTAINER INC.

    We are an indirect, wholly-owned subsidiary of OI Group and a leading
manufacturer of glass containers throughout the world. Approximately one of
every two glass containers made worldwide is made by us, our affiliates or our
licensees. Worldwide glass container sales represented 66% of OI Group's
consolidated net sales for the year ended December 31, 2001. For the year ended
December 31, 2001, we manufactured approximately 41% of all glass containers
sold by domestic producers in the U.S., making us the leading manufacturer of
glass containers in the U.S. We are the leading glass container manufacturer in
17 of the 19 countries where we compete in the glass container segment of the
rigid packaging market and the sole manufacturer of glass containers in eight of
these countries. We had net sales of approximately $3.9 billion and
$3.7 billion, and Adjusted EBITDA of

                                       1

approximately $1.0 billion and $0.9 billion, for the years ended December 31,
2000 and 2001, respectively, and our consolidated total assets were
approximately $5.8 billion at December 31, 2001.

    We and OI Group are headquartered at One SeaGate, Toledo, Ohio 43666, and
our phone number is (419) 247-5000. We are a Delaware corporation incorporated
on March 9, 1987.

                             COMPETITIVE STRENGTHS

    LEADER IN GLASS AND PLASTICS PACKAGING

    OI Group is one of the world's leading manufacturers of glass and plastics
packaging. We are the leading glass container manufacturer in 17 of the 19
countries where we compete in the glass container segment of the rigid packaging
market and the sole manufacturer of glass containers in eight of these
countries. We, our affiliates or our licensees produce approximately one of
every two glass containers made worldwide. For the year ended December 31, 2001,
we manufactured approximately 41% of all glass containers sold by domestic
producers in the U.S. In plastics, OI Group is a leader in custom blow-molded
and injection-molded packaging products. OI Group manufactures these containers
for the food and beverage, household, personal care, health care and chemical
and automotive fluid end-use categories. OI Group believes its leadership in the
glass and plastics segments of the rigid packaging market provides it the
opportunity to attract and retain large, "blue chip" customers, many of which
have a worldwide presence.

    TECHNOLOGY LEADER AND INNOVATOR

    OI Group's research, development and engineering activities and its
total-system approach to production technology and process control have yielded
significant labor and machine productivity gains over time. OI Group believes
its research, development and engineering expenditures relative to its
competitors are among the highest in the worldwide rigid packaging market. OI
Group applies "best practices" in manufacturing productivity as well as product
innovation across the entire company to maintain and strengthen its leadership
position in glass and plastics packaging. We believe we are often the glass
container supplier of choice for multi-national consumer companies due to our
leadership in glass technology and our status as the low-cost producer in many
of the countries in which we compete.

    OI Group is a leader in product development and innovation. For example, in
plastics, OI Group is the only custom blow-molder that offers products to serve
the following major plastics end-use categories: food and beverage, household,
personal care, health care and chemical and automotive fluid. OI Group is also a
leader in developing new plastic packages and closures and believes it is one of
the few suppliers with the capability to provide the customer with a "complete
package" consisting of the container and the closure. OI Group believes its new
product development cycle is one of the shortest in the plastics packaging
industry, enabling it to respond quickly to customer needs in the rapidly
changing custom plastic container segment. OI Group's product innovations
include the "child resistant" closure for prescription containers, the plastic
Heinz ketchup bottle with oxygen barriers to maintain freshness and multi-layer
plastic containers for liquid laundry products and
Gatorade-Registered Trademark- sports drink. More recent developments include a
multi-layer plastic beer bottle being used by Anheuser-Busch, Coors and Miller
Brewing, and dual-chamber plastic packages for Mentadent-Registered Trademark-
dental products and Liquid-Plumr-Registered Trademark- cleaners, which keep two
substances separated prior to use by the consumer.

    LOW-COST PRODUCER

    We believe we are the low-cost producer in the glass container segment of
the North American rigid packaging market, as well as the low-cost producer in
most of the international glass container segments in which we compete. Much of
this cost advantage is due to the proprietary equipment and process technology
we use. Over the last ten years, we have more than doubled our overall glass
container labor and machine productivity in the U.S., as measured by output
produced per man-hour.

                                       2

Through the increased use of recycled glass, we have also reduced energy costs
and prolonged the operating life of our glass melting furnaces. Our machine
development activities and systematic upgrading of production equipment
throughout the 1980's and 1990's has given us low-cost leadership in the glass
container segment in most of the countries in which we compete, a key strength
to competing successfully in the rigid packaging market.

    LONGSTANDING RELATIONSHIPS WITH "BLUE CHIP" CUSTOMERS

    OI Group's largest customers include many of the leading manufacturers and
marketers of glass and plastic packaged products in the world. We are a leading,
worldwide supplier to many of the largest users of glass containers: brewers,
food producers, distillers, wine vintners and soft drink bottlers. Our largest
U.S. glass container customers (in alphabetical order) include Anheuser-Busch,
Cadbury, Coors, Gerber, H.J. Heinz and Miller Brewing. Our largest international
glass container customers include Diageo, Foster's, Heineken, Labatt, Lion
Nathan and Molson. We are the sole glass container supplier to many of these
"blue chip" customers. For plastic containers and closures, OI Group's largest
customers include Bristol-Myers Squibb, H.J. Heinz, Johnson & Johnson, PepsiCo
(Dole-Registered Trademark-, Gatorade-Registered Trademark-,
Tropicana-Registered Trademark-), Procter & Gamble and Unilever. OI Group has
supplied many of these glass and plastics packaging customers for over 20 years
and sells most of its products to customers under annual or multi-year supply
agreements. OI Group believes its longstanding customer relationships, combined
with its leadership in technology and innovation, make it a preferred new
product supplier. This status puts OI Group in a favorable position to grow with
and through the product development activities of its multi-national, "blue
chip" customers.

    WORLDWIDE LICENSEE NETWORK

    We license our proprietary glass container technology to 24 companies in 24
countries. In plastics packaging, OI Group has technical assistance agreements
with 24 companies in 14 countries. These agreements cover areas ranging from
manufacturing and engineering assistance to support in marketing, sales and
administration. The worldwide licensee network provides a stream of revenue to
support OI Group's development activities and an opportunity to participate in
the rigid packaging market in countries where it does not already have a direct
presence. In addition, OI Group's technical agreements enable it to apply "best
practices" developed by its worldwide licensee network.

    EXPERIENCED MANAGEMENT TEAM

    OI Group's management has demonstrated an ability to deploy assets, improve
productivity and rationalize production capacity, while at the same time
maintaining its leadership position in glass and plastics packaging. OI Group is
a direct, wholly-owned subsidiary of OI Inc. OI Inc.'s 19 executive officers
average approximately 30 years of experience with OI Inc. and its predecessors.

                               BUSINESS STRATEGY

    OI Group's business strategy is to continue to (1) strengthen its existing
packaging businesses and (2) apply its leading edge technology to improve
quality, service, profitability and cash flow.

    CONTINUE TO STRENGTHEN EXISTING PACKAGING BUSINESSES

    OI Group is strengthening its existing packaging businesses and intends to
pursue growth opportunities in these businesses. We are targeting stable and
growing end-uses in the glass container segment of the North American rigid
packaging market, particularly those that would benefit from our high
productivity machines and strategic plant locations. For example, we have
targeted glass packaging for beer in the U.S. where glass containers as a
percentage of rigid packaging for beer increased from approximately 32% in 1991
to approximately 44% in 2000. In the U.S., we manufacture more glass

                                       3

containers for packaging beer than any other company. In addition, we believe
demographic and economic trends in certain developing regions of the world,
particularly portions of South America, Eastern and Central Europe and the Asia
Pacific region, where per capita glass container consumption is relatively low
but growing, will lead to an increase in the demand for glass containers in
these markets over time.

    OI Group plans to pursue growth opportunities in its plastics packaging
segment, both in the U.S. and internationally, by focusing on end-uses where
customers seek distinctive and functional packaging to differentiate or enhance
their products. OI Group remains focused on value-added activities within the
blow-molding and injection-molding plastics packaging segments. OI Group has
achieved substantial growth in this business unit and believes it has additional
growth opportunities in plastics packaging.

    In addition, consistent with past practice, OI Group may consider glass or
plastics packaging acquisitions worldwide to enhance its growth.

    CONTINUE TO APPLY LEADING EDGE TECHNOLOGY TO IMPROVE QUALITY, SERVICE,
     PROFITABILITY AND CASH FLOW

    OI Group's strategy includes continued pursuit of labor and machine
productivity improvements over time in an effort to improve quality, service,
profitability and cash flow. OI Group intends to develop and employ new
technology and improved "best practices" in an effort to continue to lower
production costs, while at the same time preserving superior product quality. OI
Group believes that maintaining its leadership in technology is key to being
successful in rigid packaging markets around the world. Over the last ten years,
we have more than doubled our overall glass container labor and machine
productivity in the U.S., as measured by output produced per man-hour. By
applying our technology and worldwide "best practices," during this period we
decreased the number of production employees required per glass-forming machine
line in the U.S. by over 35%, and we increased the daily output of our
glass-forming machines by approximately 40%.

                                       4

                            ORGANIZATIONAL STRUCTURE

                                     [LOGO]

- ------------------------------

(1) Owens-Illinois, Inc. is a public company listed on the New York Stock
    Exchange. Owens-Illinois, Inc. has $1.7 billion of outstanding public debt
    securities.

(2) These subsidiaries, including six foreign subsidiaries, may borrow under the
    $3.0 billion revolving loan facility portion of the secured credit
    agreement. Borrowings by the six foreign subsidiaries under the secured
    credit agreement are limited to a total of $1.41 billion. Certain foreign
    subsidiaries guarantee the borrowings by the foreign subsidiaries under the
    secured credit agreement. At December 31, 2001, Owens-Brockway Glass
    Container Inc. had $1.045 billion outstanding under the term loan portion of
    the secured credit agreement. In January 2002, the term loan balance was
    reduced by $980.0 million by the application of the net proceeds of the
    senior secured notes. OI General FTS Inc. borrowed $455 million under the
    term loan portion of the secured credit agreement and has repaid this debt.
    OI General FTS Inc. is jointly and severally liable for the Owens-Brockway
    Glass Container Inc. term loan and for the revolving loan facility.

                                       5

                               THE EXCHANGE OFFER

                                         
The Exchange Offer........................  We are offering to exchange the exchange notes for the
                                            outstanding private notes that are properly tendered and
                                            accepted. You may tender outstanding private notes only
                                            in denominations of $1,000 and multiples of $1,000. We
                                            will issue the exchange notes on or promptly after the
                                            exchange offer expires. As of the date of this
                                            prospectus, $1,000,000,000 principal amount of private
                                            notes is outstanding.

Expiration Date...........................  The exchange offer will expire at 5:00 p.m., New York
                                            City time, on       , 2002, unless extended, in which
                                            case the expiration date will mean the latest date and
                                            time to which we extend the exchange offer.

Conditions to the Exchange Offer..........  The exchange offer is not subject to any condition other
                                            than that it not violate applicable law or any
                                            applicable interpretation of the staff of the SEC. The
                                            exchange offer is not conditioned upon any minimum
                                            principal amount of private notes being tendered for
                                            exchange.

Procedures for Tendering Private Notes....  If you wish to tender your private notes for exchange
                                            notes pursuant to the exchange offer you must transmit
                                            to U.S. Bank National Association as exchange agent, on
                                            or before the expiration date, either:



                                             
                                            -      a computer generated message transmitted through The
                                                   Depository Trust Company's Automated Tender Offer
                                                   Program system and received by the exchange agent and
                                                   forming a part of a confirmation of book-entry
                                                   transfer in which you acknowledge and agree to be
                                                   bound by the terms of the letter of transmittal; or

                                            -      a properly completed and duly executed letter of
                                                   transmittal, which accompanies this prospectus, or a
                                                   facsimile of the letter of transmittal, together with
                                                   your private notes and any other required
                                                   documentation, to the exchange agent at its address
                                                   listed in this prospectus and on the front cover of
                                                   the letter of transmittal.



                                         
                                            If you cannot satisfy either of these procedures on a
                                            timely basis, then you should comply with the guaranteed
                                            delivery procedures described below. By executing the
                                            letter of transmittal, you will make the representations
                                            to us described under "The Exchange Offer--Procedures
                                            for Tendering."

Special Procedures for Beneficial
  Owners..................................  If you are a beneficial owner whose private notes are
                                            registered in the name of a broker, dealer, commercial
                                            bank, trust company or other nominee and you wish to
                                            tender your private notes in the exchange offer, you
                                            should contact the registered holder promptly and
                                            instruct the registered holder to tender on your behalf.
                                            If you wish to tender on your own



                                       6


                                         
                                            behalf, you must either (1) make appropriate
                                            arrangements to register ownership of the private notes
                                            in your name or (2) obtain a properly completed bond
                                            power from the registered holder, before completing and
                                            executing the letter of transmittal and delivering your
                                            private notes.

Guaranteed Delivery Procedures............  If you wish to tender your private notes and time will
                                            not permit the documents required by the letter of
                                            transmittal to reach the exchange agent before the
                                            expiration date, or the procedure for book-entry
                                            transfer cannot be completed on a timely basis, you must
                                            tender your private notes according to the guaranteed
                                            delivery procedures described in this prospectus under
                                            the heading "The Exchange Offer--Guaranteed Delivery
                                            Procedures."

Acceptance of the Private Notes and
  Delivery of the Exchange Notes..........  Subject to the satisfaction or waiver of the conditions
                                            to the exchange offer, we will accept for exchange any
                                            and all private notes which are validly tendered in the
                                            exchange offer and not withdrawn before 5:00 p.m., New
                                            York City time, on the expiration date.

Withdrawal Rights.........................  You may withdraw the tender of your private notes at any
                                            time before 5:00 p.m., New York City time, on the
                                            expiration date, by complying with the procedures for
                                            withdrawal described in this prospectus under the
                                            heading "The Exchange Offer--Withdrawal of Tenders."

Certain U.S. Federal Tax Considerations...  The exchange of notes will not be a taxable event for
                                            United States federal income tax purposes. For a
                                            discussion of certain federal tax consideration relating
                                            to the exchange of notes, see "Certain U.S. Federal
                                            Income Tax Considerations."

Exchange Agent............................  U.S. Bank National Association, the trustee under the
                                            indenture governing the notes, is serving as the
                                            exchange agent.

Consequences of Failure to Exchange.......  If you do not exchange your private notes for exchange
                                            notes, you will continue to be subject to the
                                            restrictions on transfer provided in the private notes
                                            and in the indenture governing the private notes. In
                                            general, the private notes may not be offered or sold,
                                            unless registered under the Securities Act, except
                                            pursuant to an exemption from, or in a transaction not
                                            subject to, the Securities Act and applicable state
                                            securities laws. We do not currently plan to register
                                            the private notes under the Securities Act.

Registration Rights Agreement.............  You are entitled to exchange your private notes for
                                            exchange notes with substantially identical terms. This
                                            exchange offer satisfies this right. After the exchange
                                            offer is completed, you will no longer be entitled to
                                            any exchange or registration rights with respect to your
                                            private notes.



    We explain the exchange offer in greater detail beginning on page 30.

                                       7

                               THE EXCHANGE NOTES

    THE SUMMARY BELOW DESCRIBES THE PRINCIPAL TERMS OF THE EXCHANGE NOTES.
CERTAIN OF THE TERMS AND CONDITIONS DESCRIBED BELOW ARE SUBJECT TO IMPORTANT
LIMITATIONS AND EXCEPTIONS. THE "DESCRIPTION OF NOTES" SECTION OF THIS
PROSPECTUS CONTAINS A MORE DETAILED DESCRIPTION OF THE TERMS AND CONDITIONS OF
THE EXCHANGE NOTES.

    THE FORM AND TERMS OF THE EXCHANGE NOTES ARE THE SAME AS THE FORM AND TERMS
OF THE PRIVATE NOTES, EXCEPT THAT THE EXCHANGE NOTES WILL BE REGISTERED UNDER
THE SECURITIES ACT AND, THEREFORE, THE EXCHANGE NOTES WILL NOT BE SUBJECT TO THE
TRANSFER RESTRICTIONS, REGISTRATION RIGHTS AND PROVISIONS PROVIDING FOR AN
INCREASE IN THE INTEREST RATE APPLICABLE TO THE PRIVATE NOTES. THE EXCHANGE
NOTES WILL EVIDENCE THE SAME DEBT AS THE PRIVATE NOTES, AND BOTH THE PRIVATE
NOTES AND THE EXCHANGE NOTES ARE GOVERNED BY THE SAME INDENTURE.

                                         
Issuer....................................  Owens-Brockway Glass Container Inc., a Delaware
                                            corporation.

Securities................................  $1.0 billion principal amount of 8 7/8% Senior Secured
                                            Notes.

Maturity..................................  February 15, 2009.

Interest..................................  Annual rate: 8 7/8%.

                                            Payment frequency: every six months on February 15 and
                                            August 15. First payment: August 15, 2002.

Guarantees................................  The notes are fully and unconditionally guaranteed,
                                            jointly and severally, on a senior basis by our indirect
                                            parent, OI Group, and by certain domestic subsidiaries
                                            of OI Group so long as they continue to guarantee the
                                            secured credit agreement. If we cannot make payments on
                                            the notes when they are due, the guarantors must make
                                            them instead. As of December 31, 2001, on a pro forma
                                            basis after giving effect to the offering of the notes
                                            and the application of the estimated net proceeds
                                            therefrom, OI Group would have had approximately $5.4
                                            billion of total consolidated indebtedness, which
                                            includes approximately $2.5 billion of secured
                                            indebtedness under the secured credit agreement. As of
                                            and for the year ended December 31, 2001, the
                                            non-guarantor subsidiaries represented in the aggregate
                                            approximately 43% of OI Group's consolidated net sales,
                                            45% of OI Group's consolidated Adjusted EBITDA and 42%
                                            of OI Group's consolidated total assets. As of December
                                            31, 2001, the liabilities of the non-guarantor
                                            subsidiaries on a consolidated basis were approximately
                                            $2.0 billion.

Ranking...................................  The notes are senior obligations of Owens-Brockway Glass
                                            Container and rank PARI PASSU in right of payment to all
                                            the current and future senior debt of Owens-Brockway
                                            Glass Container, including its obligations under the
                                            secured credit agreement, and rank senior in right of
                                            payment to the subordinated obligations of
                                            Owens-Brockway Glass Container. The guarantees of the
                                            notes rank equal in right of payment to the guarantees
                                            of OI Group and the subsidiary guarantors of their
                                            existing and future senior obligations, including their



                                       8


                                         
                                            obligations under the secured credit agreement, and
                                            senior in right of payment to all subordinated
                                            obligations of those guarantors, which include the
                                            guarantees by OI Group and Owens-Brockway Packaging,
                                            Inc. ("OI Packaging") of the obligations of OI Group's
                                            parent, OI Inc., related to $1.7 billion of outstanding
                                            public debt securities. The notes are effectively
                                            subordinated to obligations under the secured credit
                                            agreement, certain obligations owing to lenders or their
                                            affiliates as permitted under the secured credit
                                            agreement and obligations related to OI Inc.'s $1.7
                                            billion of outstanding public debt securities to the
                                            extent these obligations are secured by collateral that
                                            does not secure the notes. The notes may also be
                                            effectively subordinated to certain indebtedness
                                            incurred to refinance borrowings under the secured
                                            credit agreement to the extent that such indebtedness is
                                            secured by collateral that does not secure the notes.
                                            See "Risk Factors--Risks Relating to the Notes--Notes
                                            Effectively Subordinated to Certain Secured Credit
                                            Agreement Obligations and Obligations of OI Inc.--The
                                            notes are effectively subordinated to the obligations
                                            under the secured credit agreement, certain obligations
                                            owing to lenders or their affiliates as permitted under
                                            the secured credit agreement and obligations related to
                                            OI Inc.'s $1.7 billion of outstanding public debt
                                            securities to the extent these obligations are secured
                                            by collateral that does not secure the notes." In
                                            addition, the notes and the guarantees of the notes will
                                            be effectively junior to any liabilities, including
                                            trade payables, of any non-guarantor subsidiaries.

Collateral................................  The notes and guarantees of the notes are secured,
                                            subject to the terms of the collateral documents under
                                            the secured credit agreement, on a PARI PASSU basis with
                                            obligations under the secured credit agreement by:

                                            (1) a security interest in substantially all the assets
                                            (other than intercompany debt and securities) of OI
                                                Group and of substantially all the domestic
                                                subsidiaries of OI Group; and

                                            (2) a pledge by OI Group of the stock of, and
                                            intercompany debt owing to OI Group by, all its direct
                                                subsidiaries (other than the stock of, and
                                                intercompany debt owing to OI Group by, OI General
                                                FTS Inc.) and a pledge by OI Packaging of the stock
                                                of, and intercompany debt owing to OI Packaging by,
                                                Owens-Brockway Glass Container.

                                            Certain additional collateral, including the stock of OI
                                            General FTS Inc. owned by OI Group and intercompany debt
                                            owing to OI Group by OI General FTS Inc., secures the
                                            obligations under the secured credit agreement. OI
                                            General FTS Inc. and its subsidiaries do not conduct any
                                            manufacturing operations and are primarily involved in



                                       9


                                         
                                            providing administrative and general corporate services
                                            to OI Group and its subsidiaries.

                                            Except as permitted and contemplated by, and subject to
                                            the terms of, the secured credit agreement and the
                                            pledge agreement (as amended, modified, replaced or
                                            refunded), OI Group will not further pledge the stock
                                            of, or intercompany debt owing to OI Group by, OI
                                            General FTS Inc. as security or otherwise unless the
                                            notes and guarantees are secured on a PARI PASSU basis
                                            with the applicable indebtedness by this collateral.

Release of Guarantees and Collateral......  Under certain circumstances, the collateral securing the
                                            notes may be released without action by, or consent of,
                                            the holders of the notes or the trustee under the
                                            indenture. In general, the lenders under the secured
                                            credit agreement have the power to terminate and release
                                            the pledges and the security interests under the secured
                                            credit agreement and the notes when the obligations
                                            under the secured credit agreement have been paid in
                                            full, when OI Inc. and OI Group achieve investment grade
                                            debt ratings or upon the approval of the requisite
                                            percentage of lenders under the secured credit
                                            agreement. In addition, any guaranty of the notes may be
                                            released without action by, or consent of, the holders
                                            of the notes or the trustee under the indenture if the
                                            guarantor is no longer a guarantor of obligations:

                                                - under the secured credit agreement;

                                                - owing to lenders or their affiliates as lending
                                                facilities as permitted by the terms of the secured
                                                  credit agreement; and

                                                - under interest rate and currency agreements with
                                                  lenders or their affiliates as permitted by the
                                                  terms of the secured credit agreement.

                                            Upon release of a guarantor of the notes under its
                                            guarantee, the collateral documents provide that the
                                            security interest in the assets of that guarantor
                                            securing the notes and the guarantees will be released
                                            simultaneously. If collateral that secures the notes is
                                            later repledged or guarantees which guaranty the notes
                                            are reinstated under the secured credit agreement
                                            (including any amended and restated secured credit
                                            agreement or new credit agreement), such collateral will
                                            be pledged, subject to the terms of the collateral
                                            documents under the secured credit agreement (including
                                            any amended and restated secured credit agreement or new
                                            credit agreement), on a PARI PASSU basis with
                                            obligations under the secured credit agreement to secure
                                            the notes, and such guarantees will be executed in favor
                                            of the notes.



                                       10


                                         
Optional Redemption.......................  On or after February 15, 2006, we may redeem some or all
                                            of the notes at any time at the redemption prices
                                            described in the section entitled "Description of
                                            Notes--Optional Redemption." Prior to February 15, 2005,
                                            we may use the net proceeds of certain equity offerings
                                            by OI Inc. to redeem up to 35% of the notes at the price
                                            listed in the section entitled "Description of
                                            Notes--Optional Redemption."

Change of Control.........................  If we, OI Inc. or OI Group experience specific kinds of
                                            changes of control, we must offer to repurchase the
                                            notes at 101% of the aggregate principal amount of notes
                                            repurchased plus accrued and unpaid interest and
                                            liquidated damages, if any, unless we have exercised our
                                            right to redeem the notes as described in the section
                                            entitled "Description of Notes--Optional Redemption,"
                                            including our right, prior to February 15, 2006, to
                                            redeem all of the notes in the event of a change of
                                            control.

Basic Covenants of the Indenture..........  The indenture governing the notes contains covenants
                                            which, among other things, restrict the ability of OI
                                            Group and its restricted subsidiaries to:

                                                - borrow money;

                                                - pay dividends on, or redeem or repurchase, stock;

                                                - make investments;

                                                - create liens;

                                                - enter into certain transactions with affiliates;
                                                  and

                                                - sell certain assets or merge with or into other
                                                  companies.

                                            On and after the one-year anniversary of the
                                            effectiveness of the registration statement required to
                                            be filed by the registration rights agreement, we will
                                            be permitted to assign our obligations under the notes
                                            and the indenture to OI Inc., and we and each guarantor
                                            will thereafter be released from our obligations under
                                            the notes, the guarantees and the indenture, provided
                                            that (1) OI Inc. assumes all of the obligations under
                                            the notes and the indenture and (2) the obligations of
                                            each domestic borrower under the secured credit
                                            agreement have been or will be concurrently assumed by
                                            OI Inc. in accordance with the terms of the secured
                                            credit agreement. Under the secured credit agreement,
                                            the domestic borrowers may assign or transfer their
                                            rights and obligations to OI Inc. and all of OI Inc.'s
                                            subsidiaries will be concurrently released from their
                                            guarantees upon the consent of the requisite lenders if
                                            the term loans have been repaid, if OI Inc. has achieved
                                            and maintains immediately following the



                                       11


                                         
                                            assumption (including the assumption of the notes) the
                                            investment grade ratings specified under the secured
                                            credit agreement and if all obligations of subsidiaries
                                            of OI Inc. in respect of the $1.7 billion of outstanding
                                            public debt securities of OI Inc., the notes and certain
                                            other debt have been released and assumed by OI Inc.

                                            For more information, see the section entitled
                                            "Description of Notes--Certain Covenants."

Use of Proceeds...........................  We will not receive any cash proceeds from the exchange
                                            offer.



    YOU SHOULD REFER TO THE SECTION ENTITLED "RISK FACTORS" FOR AN EXPLANATION
OF THE MATERIAL RISKS OF INVESTING IN THE NOTES.

                                       12

                  SUMMARY SELECTED CONSOLIDATED FINANCIAL DATA
                           OWENS-ILLINOIS GROUP, INC.

    The selected consolidated financial data presented below relates to each of
the five years in the period ended December 31, 2001. Such data was derived from
the Consolidated Financial Statements, of which the most recent three years,
including balance sheets at December 31, 2001 and 2000, are included elsewhere
in this document and were audited by Ernst & Young LLP, independent auditors,
whose report with respect to the financial statements appears elsewhere in this
document. For more information, see the "Consolidated Financial Statements"
included elsewhere in this prospectus.



                                                                           YEARS ENDED DECEMBER 31,
                                                             ----------------------------------------------------
                                                               2001       2000       1999     1998(A)    1997(B)
                                                             --------   --------   --------   --------   --------
                                                                            (DOLLARS IN MILLIONS)
                                                                                          
CONSOLIDATED OPERATING RESULTS:
  Net sales................................................  $5,402.5   $5,552.1   $5,522.9   $5,306.3   $4,658.5
  Other revenue(c).........................................     610.8      262.7      263.8      193.0      169.9
                                                             --------   --------   --------   --------   --------
                                                              6,013.3    5,814.8    5,786.7    5,499.3    4,828.4
  Costs and expenses:
    Manufacturing, shipping and delivery...................   4,218.4    4,359.1    4,296.4    4,075.6    3,666.4
    Research, engineering, selling, administrative and
      other(d).............................................     693.7      810.6      566.6      584.7      407.0
                                                             --------   --------   --------   --------   --------
    Earnings before interest expense and items below.......   1,101.2      645.1      923.7      839.0      755.0
    Interest expense(e)....................................     434.0      486.7      425.9      380.0      302.7
                                                             --------   --------   --------   --------   --------
    Earnings before items below............................     667.2      158.4      497.8      459.0      452.3
    Provision for income taxes(f)..........................     286.4       64.1      185.5      162.3      148.5
    Minority share owners' interests in earnings of
      subsidiaries.........................................      20.1       22.0       13.2       20.2       31.4
                                                             --------   --------   --------   --------   --------
    Earnings before extraordinary items....................  $  360.7   $   72.3   $  299.1   $  276.5   $  272.4
                                                             ========   ========   ========   ========   ========
OTHER DATA:
  Cash provided by operating activities....................  $  620.3   $  541.7   $  677.3   $  716.9   $  517.2
  EBIT(g)..................................................   1,074.3      612.6      895.2      809.8      731.4
  EBITDA(h)................................................   1,598.1    1,152.0    1,431.6    1,266.3    1,070.8
  Adjusted EBIT(i).........................................     764.3      860.9      875.2      870.5      729.2
  Adjusted EBITDA(j).......................................   1,288.1    1,400.3    1,411.6    1,327.0    1,068.6
  Depreciation.............................................     403.2      412.6      403.7      358.5      283.5
  Amortization of excess cost and intangibles..............     120.6      126.8      132.7       98.0       55.9
  Amortization of deferred finance fees (included in
    interest expense)......................................      19.9       10.1        8.9        7.4        4.1
  Additions to property, plant and equipment...............     531.9      481.4      650.4      573.5      471.3
  Ratio of total debt to Adjusted EBITDA...................       4.2x       4.2x       4.2x       4.5x       3.1x
  Ratio of Adjusted EBITDA to interest expense.............       3.0x       2.9x       3.3x       3.5x       3.5x
  Ratio of earnings to fixed charges(k)....................       2.5x       1.3x       2.1x       2.1x       2.4x
BALANCE SHEET DATA (AT END OF PERIOD):
  Working capital..........................................  $    899   $    881   $    892   $    905   $    660
  Total assets.............................................     9,993     10,080     10,521     10,818      6,576
  Total debt...............................................     5,401      5,850      5,939      5,917      3,324
  Share owner's equity.....................................     2,322      2,107      2,327      2,522      1,273


- ------------------------------

(a) Results of operations and other data since April 1998 include the
    acquisition of the worldwide glass and plastics packaging businesses of BTR
    plc and the related financings.

(b) Results of operations and other data since January 1997 include the
    acquisition of AVIR S.p.A.

(c) Other revenue in 2001 includes: (1) a gain of $457.3 million
    ($284.4 million after tax) related to the sale of the Harbor Capital
    Advisors business; and (2) gains totaling $13.1 million ($12.0 million after
    tax) related to the sale of the label business and the sale of a minerals
    business in Australia.

    Other revenue in 1999 includes gains totaling $40.8 million ($23.6 million
    after tax and minority share owners' interests) related to the sales of a
    U.S. glass container plant and a mold manufacturing business in Colombia.

    Other revenue in 1998 includes: (1) a gain of $18.5 million ($11.4 million
    after tax) related to the termination of a license agreement, net of charges
    for related equipment write-offs and capacity adjustments, under which OI
    Group had produced plastic multipack carriers for beverage cans; and (2) a
    loss of $5.7 million ($3.5 million after tax) on the sale of a discontinued
    operation by an equity investee.

                                       13

    Other revenue in 1997 includes a gain of $16.3 million (pretax and after
    tax) from the sale of the remaining 49% interest in Kimble Glass.

(d) Amount for 2001 includes: (1) charges of $82.1 million ($65.3 million after
    tax and minority share owners' interests) related to restructuring and
    impairment charges at certain international glass operations, principally
    Venezuela and Puerto Rico, as well as certain other domestic and
    international operations; (2) a charge of $31.0 million (pretax and after
    tax) related to the loss on the sale of facilities in India; (3) charges of
    $30.9 million ($19.4 million after tax) related to special employee benefit
    programs; (4) a charge of $8.5 million ($5.3 million after tax) for certain
    contingencies; and (5) a charge of $7.9 million ($4.9 million after tax)
    related to restructuring manufacturing capacity in the medical devices
    business.

    In 2000, OI Group recorded pretax charges totaling $248.3 million
    ($171.0 million after tax and minority share owners' interests) for the
    following: (1) $122.4 million ($77.3 million after tax and minority share
    owners' interests) related to the consolidation of manufacturing capacity;
    (2) a net charge of $52.4 million ($32.6 million after tax) related to early
    retirement incentives and special termination benefits for 350 U.S. salaried
    employees; (3) $40.0 million (pretax and after tax) related to the
    impairment of property, plant and equipment at facilities in India; and
    (4) $33.5 million ($21.1 million after tax and minority share owners'
    interests) related principally to the write-off of software and related
    development costs.

    Amount for 1999 includes charges totaling $20.8 million ($14.0 million after
    tax and minority share owners' interests) related principally to
    restructuring costs and write-offs of certain assets in Europe and South
    America.

    In 1998, OI Group recorded: (1) charges of $72.6 million ($47.4 million
    after tax and minority share owners' interests) related principally to a
    plant closing in the U.K. and restructuring costs at certain international
    affiliates; and (2) a net charge of $0.9 million ($0.6 million after tax)
    for the settlement of certain environmental litigation and the reduction of
    previously established reserves for guarantees of certain lease obligations
    of a previously divested business.

    In 1997, OI Group recorded charges of $14.1 million ($8.7 million after tax)
    principally for guarantees of certain lease obligations of a previously
    divested business.

(e) Amount for 2001 includes a net interest charge of $4.0 million
    ($2.8 million after tax) related to interest on the resolution of the
    transfer of pension assets and liabilities for a previous acquisition and
    divestiture.

(f) Amount for 2001 includes a $6.0 million charge to adjust tax liabilities in
    Italy as a result of recent legislation.

    Amount for 2000 includes a fourth quarter benefit of $9.3 million to adjust
    net income tax liabilities in Italy as a result of recent legislation.

    In 1998, OI Group recorded a credit of $15.1 million to adjust net deferred
    income tax liabilities as a result of a reduction in Italy's statutory
    income tax rate.

(g) EBIT consists of consolidated earnings before interest income, interest
    expense, provision for income taxes, minority share owners' interests in
    earnings of subsidiaries and extraordinary charges.

(h) EBITDA consists of EBIT before depreciation and amortization of excess cost
    and intangibles. EBITDA is presented because OI Group believes it is
    frequently used by securities analysts, investors and other interested
    parties in the evaluation of companies in OI Group's industry. However,
    other companies in OI Group's industry may calculate EBITDA differently than
    OI Group does. EBITDA is not a measurement of financial performance under
    generally accepted accounting principles and should not be considered as an
    alternative to cash flow from operating activities or as a measure of
    liquidity or an alternative to net income as indicators of OI Group's
    operating performance or any other measures of performance derived in
    accordance with generally accepted accounting principles. See "Consolidated
    Financial Statements--Consolidated Cash Flows."

                                       14

(i)  OI Group evaluates performance and allocates resources based on EBIT
    excluding unusual items ("Adjusted EBIT"). Unusual items consist of the
    gains, losses and charges discussed in Notes (c) and (d) above. The
    reconciliation from EBIT to Adjusted EBIT is as follows:



                                                                                YEARS ENDED DECEMBER 31,
                                                                  ----------------------------------------------------
                                                                    2001       2000       1999       1998       1997
                                                                  --------   --------   --------   --------   --------
                                                                                     (IN MILLIONS)
                                                                                               
    EBIT........................................................  $1,074.3    $612.6     $895.2     $809.8     $731.4
    Add (deduct):
      Gain on sale of Harbor Capital Advisors business..........    (457.3)
      Gains on sales of label business and minerals business....     (13.1)
      Gains on sale of glass plant and mold business............                          (40.8)
      Net gain on termination of license agreement..............                                     (18.5)
      Sale of discontinued operations by equity investee........                                       5.7
      Gain on sale of 49% interest in Kimble Glass..............                                                (16.3)
      Restructuring and impairment, principally international
        glass...................................................      82.1
      Loss on the sale of facilities in India...................      31.0
      Special employee benefit programs.........................      30.9
      Settle contingent liabilities.............................       8.5
      Restructuring manufacturing capacity in the medical
        devices business........................................       7.9
      Consolidation of manufacturing capacity...................               122.4
      Early retirement incentives/special termination
        benefits................................................                52.4
      Impairment of property, plant and equipment in India......                40.0
      Write-off of software and related development costs.......                33.5
      Restructuring and asset write-offs in Europe/South
        America.................................................                           20.8
      U.K. plant closing and international restructuring........                                      72.6
      Settle environmental litigation/reduce reserve for
        guarantees..............................................                                       0.9
      Charge for guarantees of lease obligations................                                                 14.1
                                                                  --------    ------     ------     ------     ------
    Adjusted EBIT...............................................  $  764.3    $860.9     $875.2     $870.5     $729.2
                                                                  ========    ======     ======     ======     ======


(j)  Adjusted EBITDA represents EBITDA excluding the unusual gains, losses and
    charges discussed in Notes (c) and (d) and summarized in Note (i) above.
    Adjusted EBITDA is presented because OI Group believes it is frequently used
    by securities analysts, investors and other interested parties in the
    evaluation of companies in OI Group's industry. However, other companies in
    OI Group's industry may present Adjusted EBITDA differently than OI Group
    does. Adjusted EBITDA is not a measurement of financial performance under
    generally accepted accounting principles and should not be considered as an
    alternative to cash flow from operating activities or as a measure of
    liquidity or an alternative to net income as indicators of OI Group's
    operating performance or any other measures of performance derived in
    accordance with generally accepted accounting principles. See "Consolidated
    Financial Statements--Consolidated Cash Flows."

(k) For purposes of these computations, earnings consist of earnings before
    income taxes, minority share owners' interests in earnings of subsidiaries
    and extraordinary items plus fixed charges. Fixed charges consist primarily
    of interest on indebtedness, including amortization of deferred finance
    fees, plus that portion of lease rental expense representative of the
    interest factor. Pretax earnings and fixed charges also include the
    proportional share of 50%-owned investees.

                                       15

                                  RISK FACTORS

    YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS IN ADDITION TO THE OTHER
INFORMATION SET FORTH IN THIS PROSPECTUS BEFORE MAKING A DECISION TO EXCHANGE
YOUR PRIVATE NOTES FOR EXCHANGE NOTES IN THE EXCHANGE OFFER. THE RISK FACTORS
SET FORTH BELOW, OTHER THAN THE FIRST RISK FACTOR, ARE GENERALLY APPLICABLE TO
THE PRIVATE NOTES AS WELL AS THE EXCHANGE NOTES.

RISKS RELATING TO THE NOTES

FAILURE TO EXCHANGE--IF YOU DO NOT EXCHANGE YOUR PRIVATE NOTES PURSUANT TO THIS
EXCHANGE OFFER, YOUR ABILITY TO SELL YOUR PRIVATE NOTES MAY BE LIMITED.

    It may be difficult for you to sell private notes that are not exchanged in
the exchange offer. Those notes may not be offered or sold unless they are
registered or there are exemptions from the registration requirements under the
Securities Act and applicable state securities laws.

    If you do not tender your private notes or if we do not accept some of your
private notes, those notes will continue to be subject to the transfer and
exchange restrictions in:

    - the indenture;

    - the legend on the private notes; and

    - the offering memorandum relating to the private notes.

    The restrictions on transfer of your private notes arise because we issued
the private notes pursuant to an exemption from the registration requirements of
the Securities Act and applicable state securities laws. In general, you may
only offer or sell the private notes if they are registered under the Securities
Act and applicable state securities laws, or offered and sold pursuant to an
exemption from such requirements. We do not intend to register the private notes
under the Securities Act. To the extent private notes are tendered and accepted
in the exchange offer, the trading market, if any, for the private notes would
be adversely affected.

SUBSTANTIAL LEVERAGE--OUR SUBSTANTIAL INDEBTEDNESS AND THE SUBSTANTIAL
INDEBTEDNESS OF OI GROUP COULD ADVERSELY AFFECT OUR FINANCIAL HEALTH AND PREVENT
US FROM FULFILLING OUR OBLIGATIONS UNDER THE NOTES.

    We and OI Group have now and, after the exchange offer, will continue to
have a significant amount of debt. As of December 31, 2001, on a pro forma basis
after giving effect to the offering of the private notes and the use of net
proceeds to repay a portion of the outstanding term loan under the secured
credit agreement, we and our consolidated subsidiaries had approximately
$2.8 billion of total consolidated debt outstanding and OI Group would have had
approximately $5.4 billion of total consolidated debt outstanding, which
includes approximately $2.5 billion of secured indebtedness under the secured
credit agreement. OI Group's ratio of earnings to fixed charges was 1.3x and
2.5x for the years ended December 31, 2000 and 2001, respectively.

    This substantial indebtedness could have important consequences to you. For
example, it could:

    - make it difficult for us to satisfy our obligations with respect to the
      notes;

    - increase our vulnerability to general adverse economic and industry
      conditions;

    - increase our vulnerability to interest rate increases for the portion of
      the unhedged debt under the secured credit agreement;

    - require us to dedicate a substantial portion of our cash flow from
      operations to payments on our indebtedness, thereby reducing the
      availability of our cash flow to fund working capital, capital
      expenditures, acquisitions, development efforts and other general
      corporate purposes;

                                       16

    - limit our flexibility in planning for, or reacting to, changes in our
      business and the rigid packaging market;

    - place us at a competitive disadvantage relative to our competitors that
      have less debt; and

    - limit, along with the financial and other restrictive covenants in the
      documents governing our indebtedness, among other things, our ability to
      borrow additional funds.

    The secured credit agreement requires OI Group and the borrowers under the
secured credit agreement to maintain specified ratios and meet specified
financial condition tests. These ratios and financial condition tests are
calculated and based upon the financial statements of OI Inc. and its
subsidiaries on a consolidated basis and become more restrictive once each year.
The next tightening of the financial covenants will occur on June 30, 2002. For
example, as of December 31, 2001, the maximum allowable leverage ratio under the
secured credit agreement was 4.50x. As of June 30, 2002, the maximum allowable
leverage ratio under the secured credit agreement will be 4.35x. If OI Inc. and
its subsidiaries, on a consolidated basis, incur excessive borrowings or do not
achieve sufficient earnings, then the limits for the maximum allowable leverage
ratio and other ratios, including the fixed charge coverage ratio, under the
secured credit agreement may be exceeded. If OI Inc. and its subsidiaries, on a
consolidated basis, record any significant charges in the future, including for
asbestos-related costs, restructuring or asset impairment, or their general
operating performance declines, earnings could be insufficient to meet these
ratios. See "--Cash Used to Satisfy Other Obligations--A portion of our cash
flow will be used to make payments to OI Inc. to satisfy certain debt, preferred
stock and litigation-related obligations, including settlement of
asbestos-related claims." In such event, if the borrowers do not obtain a waiver
from, or enter into an amendment with, the requisite percentage of lenders under
the secured credit agreement for such noncompliance or noncompliance with any
other ratios and financial condition tests under the secured credit agreement,
an event of default could occur. We cannot assure you that the requisite
percentage of lenders under the secured credit agreement would grant such a
waiver or enter into such an amendment.

    Absent a waiver or an amendment, an event of default under the secured
credit agreement may have a material adverse effect on OI Group and us. Also, if
there is a default under the secured credit agreement, the commitments by the
lenders to loan funds to the borrowers may terminate and the lenders could
accelerate the debt that the borrowers owe. If the borrowers are unable to pay
those amounts, the lenders under the secured credit agreement could proceed
against the collateral granted to them to secure the debt outstanding, which
includes collateral securing the notes and guarantees. We cannot assure you that
we would have, or be able to obtain, sufficient funds to make such accelerated
payments, including payments on the notes.

ABILITY TO SERVICE DEBT--TO SERVICE OUR INDEBTEDNESS, WE WILL REQUIRE A
SIGNIFICANT AMOUNT OF CASH. OUR ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS
BEYOND OUR CONTROL.

    Our ability to make payments on and to refinance our indebtedness, including
the notes, and to fund working capital, capital expenditures, acquisitions,
development efforts and other general corporate purposes depends on our ability
to generate cash in the future. Similarly, the ability of the guarantors of the
notes to make payments on and refinance their indebtedness will depend on their
ability to generate cash in the future. To some extent, this is subject to
general and regional economic, financial, competitive, legislative, regulatory
and other factors that are beyond our or the guarantors' control. Neither we nor
the guarantors can assure you that any of us will generate sufficient cash flow
from operations, or that future borrowings will be available under the secured
credit agreement, in an amount sufficient to enable any of us to pay our
indebtedness, including the notes, or to fund other liquidity needs. We and the
guarantors may need to refinance all or a portion of our indebtedness, including
the notes, on or before maturity. If either we or the guarantors are unable to
generate

                                       17

sufficient cash flow and are unable to refinance or extend outstanding
borrowings on commercially reasonable terms or at all, we and the guarantors may
have to:

    - reduce or delay capital expenditures planned for replacements,
      improvements and expansions;

    - sell assets;

    - restructure debt; and/or

    - obtain additional debt or equity financing.

    We cannot assure you that we or the guarantors could effect or implement any
of these alternatives on satisfactory terms, if at all.

CASH USED TO SATISFY OTHER OBLIGATIONS--A PORTION OF OUR CASH FLOW WILL BE USED
TO MAKE PAYMENTS TO OI INC. TO SATISFY CERTAIN DEBT, PREFERRED STOCK AND
LITIGATION-RELATED OBLIGATIONS, INCLUDING SETTLEMENT OF ASBESTOS-RELATED CLAIMS.

    Although our indirect parent, OI Inc., does not conduct any operations, it
has substantial obligations to make payments on its $1.7 billion of outstanding
public debt securities, to pay dividends on its outstanding preferred stock, to
satisfy claims of persons for exposure to asbestos-containing products and
related expenses and to pay other ordinary course obligations. OI Inc. relies
primarily on distributions from its subsidiaries, including us, to meet these
obligations. OI Inc. makes semi-annual interest payments of $64.8 million on its
$1.7 billion of outstanding public debt securities. In addition, OI Inc. pays
quarterly dividends of $5.4 million on 9,050,000 shares of its $2.375
convertible preferred stock. OI Inc.'s asbestos-related payments were
$181.5 million and $245.9 million for the years ended December 31, 2000 and
2001, respectively.

    OI Inc. also makes, and expects to make in the future, substantial indemnity
payments and payments for legal fees and expenses in connection with
asbestos-related lawsuits and claims. OI Inc. is one of a number of defendants
(typically from 20 to 100 or more) in a substantial number of lawsuits filed in
numerous state and federal courts by persons alleging bodily injury (including
death) as a result of exposure to dust from asbestos fibers. From 1948 to 1958,
one of OI Inc.'s former business units commercially produced and sold
approximately $40 million of a high-temperature, calcium-silicate based pipe and
block insulation material containing asbestos. OI Inc. exited the pipe and block
insulation business in April 1958. As of December 31, 2001, OI Inc. estimates
that it is a named defendant in asbestos lawsuits and claims involving
approximately 27,000 plaintiffs and claimants. OI Inc. has claims-handling
agreements in place with many plaintiffs' counsel throughout the country. These
agreements require evaluation and negotiation regarding whether particular
claimants qualify under the criteria established by these agreements. The
criteria for these claims include verification of a compensable illness and a
reasonable probability of exposure to a product manufactured by OI Inc.'s former
business unit during its manufacturing period ending in 1958. OI Inc. believes
that the bankruptcies of additional co-defendants since the beginning of 2000
(such as A.P. Green Industries, Inc., Armstrong World Industries, Babcock &
Wilcox, Federal-Mogul Corporation, Fibreboard Corporation, G-I Holdings (GAF),
Harbison-Walker Refractories Group, Kaiser Aluminum Corporation, North American
Refractories Co., Owens Corning, Pittsburgh-Corning, Plibrico Company, Porter
Hayden Company, USG Corporation, W.R. Grace & Co. and several other smaller
companies) have resulted in an acceleration of the presentation and disposition
of a number of claims under these agreements, which claims would otherwise have
been presented and disposed of over the next several years. This acceleration is
reflected in an increased number of pending asbestos claims and, to the extent
disposed, contributes to an increase in asbestos-related payments, which is
expected to continue in the near term.

    OI Inc. believes that its ultimate asbestos-related contingent liability
(I.E., its indemnity or other claim disposition costs plus related legal fees)
cannot be estimated with certainty. In the third quarter of 2000, OI Inc.
established an additional liability of $550 million (in addition to a previously

                                       18

established liability of $1.225 billion) to cover its estimated indemnity
payments and legal fees arising from outstanding asbestos personal injury
lawsuits and claims and asbestos personal injury lawsuits and claims filed in
the ensuing several years. OI Inc. expects that the gross amount of total
asbestos-related payments will be moderately lower in 2002 compared to 2001 and
will continue to decline thereafter as the number of potential claimants
continues to decrease. However, the trend toward lower aggregate annual payments
has not occurred as soon as had been anticipated when the additional liability
was established in 2000. In addition, the number of claims and lawsuits filed
against OI Inc. has exceeded the number anticipated at that time. As a result,
OI Inc. is continuing to evaluate trends to determine whether further adjustment
of the asbestos-related liabilities is appropriate. While the results of this
review cannot be estimated at this time, OI Inc. expects that an increase of the
liability will be required in order to cover estimated indemnity payments and
legal fees arising from asbestos personal injury lawsuits and claims filed in
the next several years.

    As a result of the magnitude of OI Inc.'s obligations for asbestos-related
lawsuits and its dependence on the cash flows of its subsidiaries, we expect
that a substantial portion of our cash flow will be used to make payments to
OI Inc. to allow it to satisfy these obligations. These payments will reduce the
cash flow we could use to make payments on the notes.

DEBT RESTRICTIONS--OI GROUP AND ITS SUBSIDIARIES, INCLUDING US, MAY NOT BE ABLE
TO FINANCE FUTURE NEEDS OR ADAPT THEIR BUSINESS PLANS TO CHANGES BECAUSE OF
RESTRICTIONS PLACED ON THEM BY THE SECURED CREDIT AGREEMENT, THE INDENTURE AND
THE INSTRUMENTS GOVERNING OTHER INDEBTEDNESS.

    The secured credit agreement and certain of the agreements governing other
indebtedness, including the indenture governing the notes, contain affirmative
and negative covenants that limit the ability of OI Group and its subsidiaries,
including us, to take certain actions. For example, the indenture restricts,
among other things, the ability of OI Group and its restricted subsidiaries to
borrow money, pay dividends on, or redeem or repurchase, stock, make
investments, create liens, enter into certain transactions with affiliates and
sell certain assets or merge with or into other companies. These restrictions
could adversely affect OI Group's and our ability to operate our businesses and
may limit OI Group's and our ability to take advantage of potential business
opportunities as they arise.

    Failure to comply with these or other covenants and restrictions contained
in the secured credit agreement, agreements governing other indebtedness or the
indenture could result in a default under those agreements, and the debt under
those agreements, together with accrued interest, could then be declared
immediately due and payable. If a default occurs under the secured credit
agreement, the lenders could cause all of the outstanding debt obligations under
the secured credit agreement to become due and payable, which would result in a
default under the notes and could lead to an acceleration of obligations related
to the notes. A default under the secured credit agreement or agreements
governing other indebtedness or the notes could also lead to an acceleration of
debt under other debt instruments that contain cross acceleration or
cross-default provisions. Upon a default or cross-default, the collateral agent,
at the direction of the lenders under the secured credit agreement could proceed
against the collateral. There may be insufficient collateral to repay the
indebtedness under the secured credit agreement, other senior indebtedness from
time to time secured by the collateral and the notes in full at the time of any
default.

    The ability of OI Group and its subsidiaries to comply with the provisions
of the secured credit agreement and other agreements governing other
indebtedness, and our ability to comply with the provisions of the indenture may
be affected by changes in economic or business conditions or other events beyond
our control.

ADDITIONAL BORROWINGS AVAILABLE--DESPITE CURRENT INDEBTEDNESS LEVELS, OI GROUP
AND ITS SUBSIDIARIES MAY STILL BE ABLE TO INCUR SUBSTANTIALLY MORE DEBT. THIS
COULD FURTHER EXACERBATE CERTAIN RISKS DESCRIBED ABOVE.

    OI Group and its subsidiaries may be able to incur substantial additional
debt in the future, including debt secured by the collateral that secures the
notes and additional debt under the secured

                                       19

credit agreement. In addition, if OI Group designates some of its restricted
subsidiaries under the indenture as unrestricted subsidiaries, those
unrestricted subsidiaries would be permitted to borrow beyond the limitations
specified in the indenture and engage in other activities in which restricted
subsidiaries may not engage. Based on amounts outstanding at December 31, 2001,
the revolving loan facility under the secured credit agreement had unused
borrowing capacity of $491.4 million. If new debt is added to current debt
levels, the related risks that we and OI Group now face could intensify.

NOTES EFFECTIVELY SUBORDINATED TO DEBT OF NON-GUARANTOR SUBSIDIARIES--THE NOTES
ARE EFFECTIVELY SUBORDINATED TO ALL INDEBTEDNESS OF OUR SUBSIDIARIES THAT ARE
NOT GUARANTORS OF THE NOTES.

    You will not have any claim as a creditor against the subsidiaries that are
not guarantors of the notes, and the indebtedness and other liabilities,
including trade payables, whether secured or unsecured, of those subsidiaries
will be effectively senior to your claims. As of and for the year ended
December 31, 2001, the non-guarantor subsidiaries represented in the aggregate
approximately 43% of OI Group's consolidated net sales, 45% of OI Group's
consolidated Adjusted EBITDA and 42% of OI Group's consolidated total assets. As
of December 31, 2001, the liabilities of the non-guarantor subsidiaries on a
consolidated basis were approximately $2.0 billion. The non-guarantor
subsidiaries include the foreign borrowers and foreign guarantors under the
offshore subfacilities under the secured credit agreement. The notes are
effectively subordinated to claims against these foreign subsidiaries under the
secured credit agreement. In the event of a bankruptcy, liquidation,
reorganization or other winding up of any of the non-guarantor subsidiaries,
holders of their indebtedness and their trade creditors will generally be
entitled to payment of their claims from the assets of those subsidiaries before
any assets are made available for distribution to us.

    In addition, under the indenture, non-guarantor subsidiaries are permitted
to incur substantial amounts of additional debt and OI Group and its restricted
subsidiaries are permitted to make an unlimited amount of investments in
non-guarantor subsidiaries. Therefore, the notes would be effectively
subordinated to this additional indebtedness that may be incurred by the
non-guarantor subsidiaries. In addition, if OI Group or its restricted
subsidiaries invest additional amounts in non-guarantor subsidiaries, in the
event of a bankruptcy, liquidation, reorganization or other winding up of any of
the non-guarantor subsidiaries, assets that otherwise could be used to satisfy
our obligations under the notes will first be used to satisfy the obligations of
the non-guarantor subsidiaries.

NOTES EFFECTIVELY SUBORDINATED TO CERTAIN SECURED CREDIT AGREEMENT OBLIGATIONS
AND OBLIGATIONS OF OI INC.--THE NOTES ARE EFFECTIVELY SUBORDINATED TO THE
OBLIGATIONS UNDER THE SECURED CREDIT AGREEMENT, CERTAIN OBLIGATIONS OWING TO
LENDERS OR THEIR AFFILIATES AS PERMITTED UNDER THE SECURED CREDIT AGREEMENT AND
OBLIGATIONS RELATED TO OI INC.'S $1.7 BILLION OF OUTSTANDING PUBLIC DEBT
SECURITIES TO THE EXTENT THESE OBLIGATIONS ARE SECURED BY COLLATERAL THAT DOES
NOT SECURE THE NOTES.

    In addition to the collateral securing the notes and guarantees, the
obligations of the domestic borrowers and the domestic guarantors under the
secured credit agreement are further secured by:

    - a pledge by OI Group of the stock of OI General FTS Inc. and intercompany
      debt owing to OI Group by OI General FTS Inc.;

    - a pledge of the stock of substantially all of the domestic subsidiaries of
      OI General FTS Inc., OI Plastic Products FTS Inc. and Owens-Brockway Glass
      Container Inc.;

    - a pledge of the intercompany debt owed to OI General FTS Inc., OI Plastic
      Products FTS Inc. and Owens-Brockway Glass Container Inc. and
      substantially all of their domestic subsidiaries; and

    - a pledge of 65% of the stock of the first-tier foreign subsidiaries.

                                       20

    In addition to the above, the offshore subfacilities and related guarantees
under the secured credit agreement are also secured by the assets (including
stock and intercompany debt) of certain wholly-owned U.K. and Australian
subsidiaries and by the remaining 35% of the stock of the first-tier foreign
subsidiaries.

    As a result, to the extent collateral does not secure the notes, the notes
are effectively subordinated to the obligations under the secured credit
agreement, obligations owing to lenders or their affiliates as lending
facilities as permitted by the terms of the secured credit agreement and
obligations under interest rate and currency agreements with lenders or their
affiliates as permitted by the terms of the secured credit agreement. In the
event of a bankruptcy, liquidation, reorganization or other winding up of us or
OI Group, those assets that do not secure the notes will not be available to pay
our obligations on the notes unless and until payment in full of the obligations
under the secured credit agreement. Likewise, if the lenders under the secured
credit agreement accelerate the obligations under the secured credit agreement,
then those lenders would be entitled to exercise the remedies available to a
secured lender under applicable law, and those lenders would have a claim on
those assets that do not secure the notes before any holder of the notes. You
would participate with respect to those assets ratably with all holders of other
unsecured indebtedness that is deemed to be of the same class as the notes, and
potentially with other general creditors.

    Similarly, the guarantees of the notes are effectively subordinated to the
extent of the collateral that does not secure those guarantees.

    In addition, OI Inc.'s $1.7 billion of outstanding public debt securities
are secured by a second priority lien on the capital stock owned by, and
intercompany debt owed to, OI Group and OI Packaging. The collateral securing
OI Inc.'s $1.7 billion of outstanding public debt securities includes the
capital stock of, and intercompany debt owing to OI Group by, OI General
FTS Inc., which have not been pledged to secure the notes. OI General FTS and
its subsidiaries do not conduct any manufacturing operations. These companies
are primarily involved in providing administrative and general corporate
services to OI Group and its subsidiaries.

    In the event of a foreclosure on the collateral that secures the obligations
under the secured credit agreement, obligations owing to lenders or their
affiliates as lending facilities as permitted by the terms of the secured credit
agreement, obligations under interest rate and currency agreements with lenders
or their affiliates as permitted by the terms of the secured credit agreement,
OI Inc.'s obligations under the $1.7 billion of outstanding public debt
securities and the notes, there could be proceeds from the disposition of that
collateral that would not have to be shared with holders of the notes. As a
result, lenders under the secured credit agreement and holders of OI Inc.'s
$1.7 billion of outstanding public debt securities may recover a greater
percentage of the amounts owed to them than holders of the notes.

    Subject to a number of important restrictions, the indenture permits OI
Group and its restricted subsidiaries, including us, to issue notes, debentures
or other financing instruments or any combination thereof to refinance amounts
outstanding under the secured credit agreement. Any such indebtedness may be
secured by collateral that does not secure the notes. This other indebtedness
may, nonetheless, continue to be secured, notwithstanding the fact that the
collateral securing the notes may have otherwise been released.

DILUTION OF COLLATERAL--THE COLLATERAL SECURING THE NOTES MAY BE DILUTED UNDER
CERTAIN CIRCUMSTANCES.

    The collateral securing the notes secures an aggregate of approximately
$65.0 million of outstanding term loans under the secured credit agreement,
calculated as of December 31, 2001, after giving effect to the use of proceeds
from the issuance of the notes. The secured credit agreement also provides for a
$3.0 billion revolving loan facility that is secured by the collateral securing
the notes. The commitment amounts under the secured credit agreement could be
increased in the future. In addition,

                                       21

the collateral securing the notes secures obligations owing to lenders or their
affiliates as lending facilities as permitted by the terms of the secured credit
agreement and obligations under interest rate and currency agreements with
lenders or their affiliates as permitted by the terms of the secured credit
agreement. This collateral may secure additional senior indebtedness that OI
Group or certain of its subsidiaries incurs in the future, subject to
restrictions on their ability to incur debt and liens under the secured credit
agreement and the indenture. Your rights to the collateral would be diluted by
any increase in the indebtedness secured by this collateral.

                                       22

DISPOSITION AND RELEASE OF COLLATERAL AND RELEASE OF GUARANTEES--THE LENDERS
UNDER THE SECURED CREDIT AGREEMENT WILL HAVE THE RIGHT TO CONTROL THE
DISPOSITION AND RELEASE OF COLLATERAL AND RELEASE THE GUARANTEES IN THEIR SOLE
DISCRETION.

    Upon the earlier of:

    - payment in full of all obligations under the secured credit agreement and
      the cancellation or termination of the secured credit agreement and
      related letters of credit and the written election of the applicable
      pledgor(s) or grantor(s);

    - the first date on which the pledged collateral no longer secures any
      obligations under the secured credit agreement and upon the written
      election of the applicable pledgor(s) or grantor(s); and

    - the achievement of "investment grade" debt ratings for OI Inc.'s and OI
      Group's long term unsecured debt (in the case of Moody's Investors
      Service, Inc., a rating of Baa3 or higher, and, in the case of Standard &
      Poor's Ratings Services, a rating of BBB or higher),

the security interests securing the notes will terminate and the collateral will
be released. In addition, lenders under the secured credit agreement have the
ability to direct the collateral agent to release all or any portion of the
collateral upon the approval of the requisite percentage of lenders under the
secured credit agreement. In addition, in the event of an asset sale not
prohibited by the secured credit agreement or the collateral documents, the
assets subject to such sale will be released as collateral under the secured
credit agreement. None of these actions by the lenders, or the applicable
pledgor(s) or grantor(s) under the secured credit agreement or related
collateral documents, require action by, or the consent of, any holder of the
notes or the trustee under the indenture or constitute a default under the
indenture. The release of collateral would eliminate the security for the notes
and the collateral securing the guarantees of the notes, the secured credit
agreement and any other indebtedness secured thereby.

    Because the lenders under the secured credit agreement control the
disposition of the collateral securing the secured credit agreement and the
notes, if there were an event of default under the notes, the lenders could
decide not to proceed against the collateral, regardless of whether or not there
is a default under the secured credit agreement. In such event, the only remedy
available to the holders of the notes would be to sue for payment on the notes
and the guarantees. By virtue of the direction of the administration of the
pledges and security interests and the release of collateral, actions may be
taken under the collateral documents that may be adverse to you.

    In addition, any guaranty of the notes may be released without action by, or
consent of, any holder of the notes or the trustee under the indenture, at the
discretion of the then obligor on the notes, if the guarantor is no longer a
guarantor of obligations under the secured credit agreement, of obligations
owing to lenders or their affiliates as lending facilities as permitted by the
terms of the secured credit agreement and of obligations under interest rate and
currency agreements with lenders or their affiliates as permitted by the terms
of the secured credit agreement. The lenders under the secured credit agreement
have the discretion to release the guarantees under the secured credit agreement
in a variety of circumstances. In the case of the release of collateral
consisting of the stock of a guarantor of the notes, that release would cause
the guarantor's guaranty to be released if the release occurs in the context of
an asset sale of such guarantor that is not prohibited by the secured credit
agreement or the collateral documents. Upon release of a guarantor of the notes
under its guarantee, the collateral documents will provide that the security
interests in the assets of that guarantor securing the notes and guarantees will
be released simultaneously. You will not have a claim as a creditor against any
subsidiary that is no longer a guarantor of the notes, and the indebtedness and
other liabilities, including trade payables, whether secured or unsecured, of
those subsidiaries will effectively be senior to your claims.

                                       23

    If collateral that secures the notes is later repledged or guarantees that
guaranty the notes are reinstated under the secured credit agreement (including
any amended and restated secured credit agreement or new credit agreement), such
collateral will be pledged, subject to the terms of the collateral documents
under the secured credit agreement (including any amended and restated secured
credit agreement or new credit agreement), on a PARI PASSUbasis with obligations
under the secured credit agreement to secure the notes, and such guarantees will
be executed in favor of the notes.

FURTHER COLLATERAL PLEDGES SUBJECT TO AVOIDANCE--ANY FUTURE PLEDGE OF COLLATERAL
MIGHT BE AVOIDABLE BY A TRUSTEE IN BANKRUPTCY.

    Any future pledge of collateral in favor of the collateral agent for the
benefit of the indenture trustee might be avoidable by the pledgor (as debtor in
possession) or by its trustee in bankruptcy if certain events or circumstances
exist or occur, including, among others, if the pledgor is insolvent at the time
of the pledge, the pledge permits the holders of the notes to receive a greater
recovery than if the pledge had not been given and a bankruptcy proceeding in
respect of the pledgor is commenced within 90 days following the pledge, or, in
certain circumstances, a longer period.

COVENANT RELIEF FOR INVESTMENT GRADE RATING--IF THE NOTES RECEIVE AN INVESTMENT
GRADE RATING, WE WILL NO LONGER BE SUBJECT TO MOST OF THE COVENANTS IN THE
INDENTURE.

    If at any time the notes receive an "investment grade" rating from
Standard & Poor's Ratings Services and Moody's Investors Service, Inc., subject
to certain additional conditions, OI Group and its restricted subsidiaries will
no longer be subject to most of the covenants set forth in the indenture. In the
event of such release, the covenants will not be restored, even if the notes
were later rated below investment grade by either or both of these rating
agencies. See "Description of Notes--Certain Covenants--Fall-Away Event."

    On and after the one-year anniversary of the effectiveness of the
registration statement required to be filed by the registration rights
agreement, we will be permitted to assign our obligations under the notes and
the indenture to OI Inc., and we and each guarantor will thereafter be released
from our obligations under the notes, the guarantees and the indenture, provided
that (1) OI Inc. assumes all of the obligations under the notes and the
indenture and (2) the obligations of each domestic borrower under the secured
credit agreement have been or will be concurrently assumed by OI Inc. in
accordance with the terms of the secured credit agreement. As a result, holders
of the notes could look only to OI Inc. to satisfy the obligations on the notes.
See "Description of Notes--Certain Covenants--Merger, Consolidation or Sale of
Assets."

FRAUDULENT TRANSFER--FEDERAL AND STATE LAWS PERMIT A COURT TO VOID THE NOTES OR
THE GUARANTEES UNDER CERTAIN CIRCUMSTANCES.

    The issuance of the notes and the guarantees may be subject to review under
federal or state fraudulent transfer laws. While the relevant laws may vary from
state to state, under such laws, the payment of consideration or the issuance of
a guarantee will be a fraudulent conveyance if (1) we paid the consideration, or
any guarantor issued guarantees, with the intent of hindering, delaying or
defrauding creditors, or (2) we or any of the guarantors received less than
reasonably equivalent value or fair consideration in return for paying the
consideration or issuing their respective guarantees, and, in the case of
(2) above only, one of the following is also true:

    - we or any of the guarantors were insolvent, or became insolvent, when we
      or they paid the consideration;

    - paying the consideration or issuing the guarantees left us or the
      applicable guarantor with an unreasonably small amount of capital; or

                                       24

    - we or the applicable guarantor, as the case may be, intended to, or
      believed that we or it would, be unable to pay debts as they matured.

    If the payment of the consideration or the issuance of any guarantee were a
fraudulent conveyance, a court could, among other things, void our obligations
regarding the payment of the consideration or void any of the guarantors'
obligations under their respective guarantees, as the case may be, and require
the repayment of any amounts paid thereunder.

    Generally, an entity will be considered insolvent if:

    - the sum of its debts is greater than the fair value of its property;

    - the present fair value of its assets is less than the amount that it will
      be required to pay on its existing debts as they become due; or

    - it cannot pay its debts as they become due.

    We believe that immediately after the issuance of the notes and the
guarantees, we and each of the guarantors will be solvent, will have sufficient
capital to carry on our respective businesses and will be able to pay our
respective debts as they mature. However, we cannot be sure as to what standard
a court would apply in making these determinations or that a court would reach
the same conclusions with regard to these issues.

CHANGE OF CONTROL--THE SECURED CREDIT AGREEMENT PROVIDES THAT CERTAIN CHANGE OF
CONTROL EVENTS CONSTITUTE AN EVENT OF DEFAULT. IN THE EVENT OF A CHANGE OF
CONTROL, WE MAY NOT BE ABLE TO SATISFY ALL OF OUR OBLIGATIONS UNDER THE SECURED
CREDIT AGREEMENT, THE NOTES OR OTHER INDEBTEDNESS.

    If we, OI Inc. or OI Group experiences specific kinds of changes of control,
we will be required to offer to repurchase all outstanding notes. However, the
secured credit agreement provides that certain change of control events
constitute an event of default under the secured credit agreement. An event of
default would entitle the lenders thereunder to, among other things, cause all
outstanding debt obligations under the secured credit agreement to become due
and payable and to proceed against their collateral, which includes collateral
securing the notes and the guarantees. We cannot assure you that we would have
sufficient assets or be able to obtain sufficient third party financing on
favorable terms to satisfy all of our obligations under the secured credit
agreement, the notes or other indebtedness.

    Any future credit agreements or other agreements relating to indebtedness to
which we become a party may contain restrictions on our ability to offer to
repurchase the notes in connection with a change of control. In the event a
change of control occurs at a time when we are prohibited from offering to
purchase the notes, we could seek consent to offer to purchase the notes or
attempt to refinance the borrowings that contain such a prohibition. If we do
not obtain the consent or refinance the borrowings, we would remain prohibited
from offering to purchase the notes. In such case, our failure to offer to
purchase the notes would constitute a default under the indenture, which, in
turn, could result in amounts outstanding under any future credit agreement or
other agreements relating to indebtedness being declared due and payable. Any
such declaration could have adverse consequences to us and the holders of the
notes.

    The provisions relating to a change of control included in the indenture may
increase the difficulty for a potential acquiror to obtain control of us. In
addition, some important corporate events, such as leveraged recapitalizations,
that would increase the level of our indebtedness, would not constitute a
"change of control" under the indenture.

                                       25

NO PRIOR MARKET FOR THE EXCHANGE NOTES--YOU CANNOT BE SURE THAT AN ACTIVE
TRADING MARKET WILL DEVELOP FOR THE EXCHANGE NOTES.

    The exchange notes are a new issue of securities for which there is
currently no trading market. We have been informed by the initial purchasers of
the private notes that they intend to make a market in the exchange notes.
However, the initial purchasers may cease their market-making at any time. In
addition, the liquidity of the trading market in the exchange notes, and the
market price quoted for these notes, may be adversely affected by changes in the
overall market for high yield securities and by changes in our financial
performance or in the prospects for companies in our industry generally. As a
result, you cannot be sure that an active trading market will develop for the
exchange notes.

RISKS RELATING TO THE BUSINESS OF OI GROUP

INTERNATIONAL OPERATIONS--OI GROUP IS SUBJECT TO RISKS ASSOCIATED WITH OPERATING
  IN FOREIGN COUNTRIES.

    OI Group operates manufacturing and other facilities throughout the world.
Net sales from international operations in 2001 totaled approximately
$2.3 billion, representing approximately 43% of OI Group's net sales. As a
result of its international operations, OI Group is subject to risks associated
with operating in foreign countries, including:

    - political, social and economic instability;

    - war, civil disturbance or acts of terrorism;

    - taking of property by nationalization or expropriation without fair
      compensation;

    - changes in government policies and regulations;

    - devaluations and fluctuations in currency exchange rates;

    - imposition of limitations on conversions of foreign currencies into
      dollars or remittance of dividends and other payments by foreign
      subsidiaries;

    - imposition or increase of withholding and other taxes on remittances and
      other payments by foreign subsidiaries;

    - hyperinflation in certain foreign countries; and

    - impositions or increase of investment and other restrictions or
      requirements by foreign governments.

    The unusually severe economic, market and/or currency exchange conditions in
South America, Europe and the Asia Pacific region adversely affected operating
results in 1999 and 2000. In addition, OI Group has continued to be negatively
affected in 2001 by changing foreign currency exchange rates, which reduced U.S.
dollar sales of foreign affiliates by approximately $160.0 million during that
period. The risks associated with operating in foreign countries may have a
material adverse effect on operations.

COMPETITION--WE FACE INTENSE COMPETITION FROM OTHER GLASS CONTAINER PRODUCERS,
AS WELL AS FROM MAKERS OF ALTERNATIVE FORMS OF PACKAGING. COMPETITIVE PRESSURES
COULD ADVERSELY AFFECT OUR FINANCIAL HEALTH.

    We are subject to significant competition from other glass container
producers, as well as from makers of alternative forms of packaging, such as
aluminum cans and plastic containers. Our principal competitors among glass
container producers in the U.S. are Saint-Gobain Containers Co., a wholly-owned
subsidiary of Compagnie de Saint-Gobain, and Anchor Glass Container Corporation.

    In supplying glass containers outside of the U.S., we compete directly with
Compagnie de Saint-Gobain in Italy and Brazil, Rexam plc and Ardagh plc in the
U.K., Vetropak in the Czech Republic

                                       26

and Amcor Limited in Australia. In other locations in Europe, we compete
indirectly with a variety of glass container firms including Compagnie de
Saint-Gobain, BSN Glasspack, Vetropak and Rexam plc.

    In addition to competing with other large, well-established manufacturers in
the glass container segment, we compete with manufacturers of other forms of
rigid packaging, principally aluminum cans and plastic containers, on the basis
of quality, price and service. The principal competitors producing metal
containers are Crown Cork & Seal Company, Inc., Rexam plc, Ball Corporation and
Silgan Holdings Inc. The principal competitors producing plastic containers are
Consolidated Container Holdings, LLC, Graham Packaging Company, Plastipak
Packaging, Inc. and Silgan Holdings Inc. We also compete with manufacturers of
non-rigid packaging alternatives, including flexible pouches and aseptic
cartons, in serving the packaging needs of juice customers.

    Pressures from competitors and producers of alternative forms of packaging
have resulted in excess capacity in certain countries in the past and have led
to significant pricing pressures in the rigid packaging market.

HIGH ENERGY COSTS--HIGHER ENERGY COSTS WORLDWIDE AND INTERRUPTED POWER SUPPLIES
MAY HAVE A MATERIAL ADVERSE EFFECT ON OPERATIONS.

    Electrical power and natural gas are vital to OI Group's operations and it
relies on a continuous power supply to conduct its business. In 2001, higher
energy costs worldwide impacted OI Group's operations and earnings at a level
that it did not anticipate. If energy costs substantially increase in the
future, OI Group could experience a significant increase in operating costs,
which may have a material adverse effect on future operating income.

    In addition, certain locations in which OI Group has operations have
experienced power shortages that resulted in periodic "rolling" blackouts to
maintain the stability of the power grid. Certain of OI Group's facilities are
susceptible to power interruptions as long as any such energy crisis exists.
Frequent power interruptions may have a material adverse effect on operations.

INTEGRATION RISKS--OI GROUP MAY NOT BE ABLE TO EFFECTIVELY INTEGRATE BUSINESSES
IT ACQUIRES.

    OI Group's strategy includes the acquisition of complementary businesses.
Any recent or future acquisitions are subject to various risks and
uncertainties, including:

    - the inability to assimilate effectively the operations, products,
      technologies and personnel of the acquired companies (some of which are
      located in diverse geographic regions);

    - the potential disruption of existing business and diversion of
      management's attention from day-to-day operations;

    - the inability to maintain uniform standards, controls, procedures and
      policies;

    - the need or obligation to divest portions of the acquired companies; and

    - the potential impairment of relationships with customers.

    In addition, we cannot assure you that the integration and consolidation of
newly acquired businesses will achieve anticipated cost savings and operating
synergies.

CUSTOMER CONSOLIDATION--THE CONTINUING CONSOLIDATION OF OI GROUP'S CUSTOMER BASE
MAY INTENSIFY PRICING PRESSURES AND HAVE A MATERIAL ADVERSE EFFECT ON
OPERATIONS.

    Over the last ten years, many of OI Group's largest customers have acquired
companies with similar or complementary product lines. This consolidation has
increased the concentration of OI Group's business with its largest customers.
In many cases, such consolidation has been accompanied by pressure from
customers for lower prices, reflecting the increase in the total volume of
product

                                       27

purchased or the elimination of a price differential between the acquiring
customer and the company acquired. Increased pricing pressures from OI Group's
customers may have a material adverse effect on operations.

SEASONALITY AND RAW MATERIALS--PROFITABILITY COULD BE AFFECTED BY VARIED
SEASONAL DEMANDS AND THE AVAILABILITY OF RAW MATERIALS.

    Due principally to the seasonal nature of the brewing, iced tea and other
beverage industries, in which demand is stronger during the summer months, sales
of OI Group's products have varied and are expected to vary by quarter.
Shipments in the U.S. and Europe are typically greater in the second and third
quarters of the year, while shipments in South America and Asia Pacific are
typically greater in the first and fourth quarters of the year. Unseasonably
cool weather during peak demand periods can reduce demand for certain beverages
packaged in OI Group's containers.

    The raw materials that OI Group uses have historically been available in
adequate supply from multiple sources. For certain raw materials, however, there
may be temporary shortages due to weather or other factors, including
disruptions in supply caused by raw material transportation or production
delays. These shortages, as well as material increases in the cost of any of the
principal raw materials that OI Group uses, may have a material adverse effect
on operations.

ENVIRONMENTAL RISKS--OI GROUP IS SUBJECT TO VARIOUS ENVIRONMENTAL LEGAL
REQUIREMENTS AND MAY BE SUBJECT TO NEW LEGAL REQUIREMENTS IN THE FUTURE. THESE
REQUIREMENTS MAY HAVE A MATERIAL ADVERSE EFFECT ON OPERATIONS.

    OI Group's operations and properties, both in the U.S. and abroad, are
subject to extensive laws, ordinances, regulations and other legal requirements
relating to environmental protection, including legal requirements governing
investigation and clean-up of contaminated properties as well as water
discharges, air emissions, waste management and workplace health and safety.
Such legal requirements frequently change and are different in every
jurisdiction. OI Group's operations and properties, both in the U.S. and abroad,
must comply with these legal requirements. In addition, OI Group is required to
obtain and maintain permits in connection with its operations.

    OI Group has incurred, and expects to incur, costs for its operations to
comply with environmental legal requirements, and these costs could increase in
the future. Many environmental legal requirements provide for substantial fines,
orders (including orders to cease operations), and criminal sanctions for
violations. Certain environmental legal requirements provide for strict, joint
and several liability for investigation and remediation of releases of hazardous
substances into the environment and for natural resource damages, and may also
impose liability for personal injury or property damage due to the presence of
or exposure to hazardous substances. These legal requirements may apply to
conditions at properties that OI Group presently or formerly owned or operated,
as well as at other properties for which OI Group may be responsible, including
those at which wastes attributable to OI Group were disposed. A significant
order or judgment against OI Group, the loss of a significant permit or license
or the imposition of a significant fine may have a material adverse effect on
operations.

    A number of governmental authorities both in the U.S. and abroad have
enacted, or are considering, legal requirements that would mandate certain rates
of recycling, the use of recycled materials, and/or limitations on certain kinds
of packaging materials such as plastics. In addition, some companies with
packaging needs have responded to such developments, and /or to perceived
environmental concerns of consumers, by using containers made in whole or in
part of recycled materials. Such developments may reduce the demand for some of
OI Group's products, and/or increase OI Group's costs, which may have a material
adverse effect on operations.

                                       28

LABOR RELATIONS--OI GROUP IS PARTY TO COLLECTIVE BARGAINING AGREEMENTS WITH
LABOR UNIONS. ORGANIZED STRIKES OR WORK STOPPAGES BY UNIONIZED EMPLOYEES MAY
HAVE A MATERIAL ADVERSE EFFECT ON OPERATIONS.

    OI Group is party to a number of collective bargaining agreements with labor
unions, the principal one of which will expire in April 2005, and at
December 31, 2001, covered approximately 90% of OI Group's union affiliated
employees in the U.S. Upon the expiration of any collective bargaining
agreement, OI Group's inability to negotiate acceptable contracts with labor
unions could result in strikes by the affected workers and increased operating
costs as a result of higher wages or benefits paid to union members. If the
unionized workers were to engage in a strike or other work stoppage, OI Group
could experience a significant disruption of operations and/or higher ongoing
labor costs, which may have a material adverse effect on operations.

                                       29

                               THE EXCHANGE OFFER

PURPOSE OF THE EXCHANGE OFFER

    We issued the private notes on January 24, 2002 to Banc of America
Securities LLC, Goldman, Sachs & Co., Deutsche Banc Alex. Brown Inc., Morgan
Stanley & Co. Incorporated and Scotia Capital (USA) Inc., the initial
purchasers, pursuant to a purchase agreement. The initial purchasers
subsequently sold the private notes to "qualified institutional buyers," as
defined in Rule 144A under the Securities Act, in reliance on Rule 144A, and
outside the United States under Regulation S of the Securities Act. As a
condition to the sale of the private notes, we entered into a registration
rights agreement with the initial purchasers on January 24, 2002. Pursuant to
the registration rights agreement, we agreed that we would:

    (1) file an exchange offer registration statement with the SEC on or prior
       to May 24, 2002;

    (2) use our commercially reasonable efforts to have the exchange offer
       registration statement declared effective by the SEC on or prior to
       August 12, 2002;

    (3) keep the exchange offer open for a period of not less than the minimum
       period required under applicable law, but in no event for less than 20
       business days;

    (4) use our commercially reasonable efforts to consummate the exchange offer
       on or prior to September 21, 2002.

    Upon the effectiveness of the exchange offer registration statement, we will
offer the exchange notes in exchange for the private notes. We filed a copy of
the registration rights agreement as an exhibit to the registration statement.

RESALE OF THE EXCHANGE NOTES

    Based upon an interpretation by the staff of the SEC contained in no-action
letters issued to third parties, we believe that you may exchange private notes
for exchange notes in the ordinary course of business. For further information
on the SEC's position, see EXXON CAPITAL HOLDINGS CORPORATION, available
May 13, 1988, MORGAN STANLEY & CO. INCORPORATED, available June 5, 1991 and
SHEARMAN & STERLING, available July 2, 1993, and other interpretive letters to
similar effect. You will be allowed to resell exchange notes to the public
without further registration under the Securities Act and without delivering to
purchasers of the exchange notes a prospectus that satisfies the requirements of
Section 10 of the Securities Act so long as you do not participate, do not
intend to participate, and have no arrangement with any person to participate,
in a distribution of the exchange notes. However, the foregoing does not apply
to you if you are:

       - a broker-dealer who purchased the exchange notes directly from us to
         resell pursuant to Rule 144A or any other available exemption under the
         Securities Act; or

       - you are an "affiliate" of ours within the meaning of Rule 405 under the
         Securities Act.

    In addition, if:

       - you are a broker-dealer; or

       - you acquire exchange notes in the exchange offer for the purpose of
         distributing or participating in the distribution of the exchange
         notes,

you cannot rely on the position of the staff of the SEC contained in the
no-action letters mentioned above and must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction, unless an exemption from registration is otherwise
available.

                                       30

    Each broker-dealer that receives exchange notes for its own account in
exchange for private notes, which the broker-dealer acquired as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of the exchange notes.
The letter of transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. A broker-dealer may use
this prospectus, as it may be amended or supplemented from time to time, in
connection with resales of exchange notes received in exchange for private notes
which the broker-dealer acquired as a result of market-making or other trading
activities.

TERMS OF THE EXCHANGE OFFER

    Upon the terms and subject to the conditions described in this prospectus
and in the letter of transmittal, we will accept any and all private notes
validly tendered and not withdrawn before the expiration date. We will issue
$1,000 principal amount of exchange notes in exchange for each $1,000 principal
amount of outstanding private notes surrendered pursuant to the exchange offer.
You may tender private notes only in integral multiples of $1,000.

    The form and terms of the exchange notes are the same as the form and terms
of the private notes except that:

    - we will register the exchange notes under the Securities Act and,
      therefore, the exchange notes will not bear legends restricting their
      transfer; and

    - holders of the exchange notes will not be entitled to any of the rights of
      holders of private notes under the registration rights agreement, which
      rights will terminate upon the completion of the exchange offer.

The exchange notes will evidence the same debt as the private notes and will be
issued under the same indenture, so the exchange notes and the private notes
will be treated as a single class of debt securities under the indenture.

    As of the date of this prospectus, $1,000,000,000 in aggregate principal
amount of the private notes are outstanding and registered in the name of
Cede & Co., as nominee for The Depository Trust Company. Only registered holders
of the private notes, or their legal representative or attorney-in-fact, as
reflected on the records of the trustee under the indenture, may participate in
the exchange offer. We will not set a fixed record date for determining
registered holders of the private notes entitled to participate in the exchange
offer.

    You do not have any appraisal or dissenters' rights under the indenture in
connection with the exchange offer. We intend to conduct the exchange offer in
accordance with the provisions of the registration rights agreement and the
applicable requirements of the Securities Act, the Exchange Act and the rules
and regulations of the SEC.

    We will be deemed to have accepted validly tendered private notes when, as
and if we had given oral or written notice of acceptance to the exchange agent.
The exchange agent will act as your agent for the purposes of receiving the
exchange notes from us.

    If you tender private notes in the exchange offer you will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
letter of transmittal, transfer taxes with respect to the exchange of private
notes pursuant to the exchange offer. We will pay all charges and expenses,
other than the applicable taxes described below, in connection with the exchange
offer.

                                       31

EXPIRATION DATE; EXTENSIONS; AMENDMENTS

    The term expiration date will mean 5:00 p.m., New York City time on
            , 2002, unless we, in our sole discretion, extend the exchange
offer, in which case the term expiration date will mean the latest date and time
to which we extend the exchange offer.

    To extend the exchange offer, we will:

    - notify the exchange agent of any extension orally or in writing; and

    - mail to each registered holder an announcement that will include
      disclosure of the approximate number of private notes deposited to date,

each before 9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date.

    We reserve the right, in our reasonable discretion:

    - to delay accepting any private notes:

    - to extend the exchange offer; or

    - if any conditions listed below under "--Conditions" are not satisfied, to
      terminate the exchange offer by giving oral or written notice of the
      delay, extension or termination to the exchange agent.

    We will follow any delay in acceptance, extension or termination as promptly
as practicable by oral or written notice to the registered holders. If we amend
the exchange offer in a manner we determine constitutes a material change, we
will promptly disclose the amendment in a prospectus supplement that we will
distribute to the registered holders. We will also extend the exchange offer for
a period of five to ten business days, depending upon the significance of the
amendment and the manner of disclosure, if the exchange offer would otherwise
expire during the five to ten business day period.

INTEREST ON THE EXCHANGE NOTES

    The exchange notes will bear interest at the same rate and on the same terms
as the private notes. Consequently, the exchange notes will bear interest at a
rate equal to 8 7/8% per annum (calculated using a 360-day year). Interest will
be payable semi-annually on each February 15 and August 15, commencing
August 15, 2002.

    You will receive interest on August 15, 2002 from the date of initial
issuance of the exchange notes, plus an amount equal to the accrued interest on
the private notes from the date of delivery to the date of exchange. We will
deem the right to receive any interest accrued on the private notes waived by
you if we accept your private notes for exchange.

PROCEDURES FOR TENDERING

    You may tender private notes in the exchange offer only if you are a
registered holder of private notes. To tender in the exchange offer, you must:

    - complete, sign and date the letter of transmittal or a facsimile of the
      letter of transmittal;

    - have the signatures guaranteed if required by the letter of transmittal;
      and

    - mail or otherwise deliver the letter of transmittal or the facsimile to
      the exchange agent at the address listed below under "--Exchange Agent"
      for receipt before the expiration date.

                                       32

    In addition, either:

    - the exchange agent must receive certificates for the private notes along
      with the letter of transmittal into its account at the depositary pursuant
      to the procedure for book-entry transfer described below before the
      expiration date;

    - the exchange agent must receive a timely confirmation of a book-entry
      transfer of the private notes, if the procedure is available, into its
      account at the depositary pursuant to the procedure for book-entry
      transfer described below before the expiration date; or

    - you must comply with the guaranteed delivery procedures described below.

    Your tender, if not withdrawn before the expiration date, will constitute an
agreement between you and us in accordance with the terms and subject to the
conditions described in this prospectus and in the letter of transmittal.

    The method of delivery of private notes and the letter of transmittal and
all other required documents to the exchange agent is at your election and risk.
We recommend that instead of delivery by mail, you use an overnight or hand
delivery service, properly insured. In all cases, you should allow sufficient
time to assure delivery to the exchange agent before the expiration date. You
should not send letters of transmittal or private notes to us. You may request
your respective brokers, dealers, commercial banks, trust companies or nominees
to effect the transactions described above for you.

    If you are a beneficial owner of private notes whose private notes are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee and you wish to tender your notes, you should contact the
registered holder promptly and instruct the registered holder to tender on your
behalf. If you wish to tender on your own behalf, before completing and
executing the letter of transmittal and delivering the private notes you must
either:

    - make appropriate arrangements to register ownership of the private notes
      in your name; or

    - obtain a properly completed bond power from the registered holder.

    The transfer of registered ownership may take considerable time. Unless the
private notes are tendered:

    (1) by a registered holder who has not completed the box entitled "Special
       Issuance Instructions" or the box entitled "Special Delivery
       Instructions" on the letter of transmittal; or

    (2) for the account of:

       - a member firm of a registered national securities exchange or of the
         National Association of Securities Dealers, Inc.;

       - a commercial bank or trust company having an office or correspondent in
         the United States; or

       - an "eligible guarantor institution" within the meaning of Rule 17Ad-15
         under the Exchange Act that is a member of one of the recognized
         signature guarantee programs identified in the letter of transmittal,

an eligible guarantor institution must guarantee the signatures on a letter of
transmittal or a notice of withdrawal described below under "--Withdrawal of
Tenders."

    If the letter of transmittal is signed by a person other than the registered
holder, the private notes must be endorsed or accompanied by a properly
completed bond power, signed by the registered holder as the registered holder's
name appears on the private notes.

                                       33

    If the letter of transmittal or any private notes or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, they
should so indicate when signing, and unless waived by us, they must submit
evidence satisfactory to us of their authority to so act with the letter of
transmittal.

    The exchange agent and the depositary have confirmed that any financial
institution that is a participant in the depositary's system may utilize the
depositary's Automated Tender Offer Program to tender notes.

    We will determine in our sole discretion all questions as to the validity,
form, eligibility, including time of receipt, acceptance and withdrawal of
tendered private notes, which determination will be final and binding. We
reserve the absolute right to reject any and all private notes not properly
tendered or any private notes our acceptance of which would, in the opinion of
our counsel, be unlawful. We also reserve the right to waive any defects,
irregularities or conditions of tender as to particular private notes. Our
interpretation of the terms and conditions of the exchange offer, including the
instructions in the letter of transmittal, will be final and binding on all
parties. Unless waived, you must cure any defects or irregularities in
connection with tenders of private notes within the time we determine. Although
we intend to notify you of defects or irregularities with respect to tenders of
private notes, neither we, the exchange agent nor any other person will incur
any liability for failure to give you that notification. Unless waived, we will
not deem tenders of private notes to have been made until you cure the defects
or irregularities.

    While we have no present plan to acquire any private notes that are not
tendered in the exchange offer or to file a registration statement to permit
resales of any private notes that are not tendered in the exchange offer, we
reserve the right in our sole discretion to purchase or make offers for any
private notes that remain outstanding after the expiration date. We also reserve
the right to terminate the exchange offer, as described below under
"--Conditions," and, to the extent permitted by applicable law, purchase private
notes in the open market, in privately negotiated transactions or otherwise. The
terms of any of those purchases or offers could differ from the terms of the
exchange offer.

    If you wish to tender private notes in exchange for exchange notes in the
exchange offer, we will require you to represent that:

    - you are not an affiliate of ours;

    - you will acquire any exchange notes in the ordinary course of your
      business; and

    - at the time of completion of the exchange offer, you have no arrangement
      with any person to participate in the distribution of the exchange notes.

    In addition, in connection with the resale of exchange notes, any
participating broker-dealer who acquired the private notes for its own account
as a result of market-making or other trading activities must deliver a
prospectus meeting the requirements of the Securities Act. The SEC has taken the
position that participating broker-dealers may fulfill their prospectus delivery
requirements with respect to the exchange notes, other than a resale of an
unsold allotment from the original sale of the notes, with this prospectus.

RETURN OF NOTES

    If we do not accept any tendered private notes for any reason described in
the terms and conditions of the exchange offer or if you withdraw or submit
private notes for a greater principal amount than you desire to exchange, we
will return the unaccepted, withdrawn or non-exchanged notes without expense to
you as promptly as practicable. In the case of private notes tendered by
book-entry transfer into the exchange agent's account at the depositary pursuant
to the book-entry transfer

                                       34

procedures described below, we will credit the private notes to an account
maintained with the depositary as promptly as practicable.

BOOK-ENTRY TRANSFER

    The exchange agent will make a request to establish an account with respect
to the private notes at the depositary for purposes of the exchange offer within
two business days after the date of this prospectus, and any financial
institution that is a participant in the depositary's systems may make
book-entry delivery of private notes by causing the depositary to transfer the
private notes into the exchange agent's account at the depositary in accordance
with the depositary's procedures for transfer. However, although delivery of
private notes may be effected through book-entry transfer at the depositary, you
must transmit and the exchange agent must receive, the letter of transmittal or
a facsimile of the letter of transmittal, with any required signature guarantees
and any other required documents, at the address below under "--Exchange Agent"
on or before the expiration date or pursuant to the guaranteed delivery
procedures described below.

GUARANTEED DELIVERY PROCEDURES

    If you wish to tender your private notes and (1) the notes are not
immediately available or (2) you cannot deliver the private notes, the letter of
transmittal or any other required documents to the exchange agent before the
expiration date, you may effect a tender if:

    (1) the tender is made through an eligible guarantor institution;

    (2) before the expiration date, the exchange agent receives from the
       eligible guarantor institution a properly completed and duly executed
       notice of guaranteed delivery, substantially in the form provided by us,
       that:

       - states your name and address, the certificate number(s) of the private
         notes and the principal amount of private notes tendered,

       - states that the tender is being made by that notice of guaranteed
         delivery, and

       - guarantees that, within three New York Stock Exchange trading days
         after the expiration date, the eligible guarantor institution will
         deposit with the exchange agent the letter of transmittal, together
         with the certificate(s) representing the private notes in proper form
         for transfer or a confirmation of a book-entry transfer, as the case
         may be, and any other documents required by the letter of transmittal;
         and

    (3) within five New York Stock Exchange trading days after the expiration
       date, the exchange agent receives a properly executed letter of
       transmittal, as well as the certificate(s) representing all tendered
       private notes in proper form for transfer and all other documents
       required by the letter of transmittal.

    Upon request, the exchange agent will send to you a notice of guaranteed
delivery if you wish to tender your notes according to the guaranteed delivery
procedures described above.

WITHDRAWAL OF TENDERS

    Except as otherwise provided in this prospectus, you may withdraw tenders of
private notes at any time before 5:00 p.m. on the expiration date.

    To withdraw a tender of private notes in the exchange offer, the exchange
agent must receive a written or facsimile transmission notice of withdrawal at
its address listed in this prospectus before the expiration date. Any notice of
withdrawal must:

    - specify the name of the person who deposited the private notes to be
      withdrawn;

                                       35

    - identify the private notes to be withdrawn, including the certificate
      number(s) and principal amount of the private notes; and

    - be signed in the same manner as the original signature on the letter of
      transmittal by which the private notes were tendered, including any
      required signature guarantees.

    We will determine in our sole discretion all questions as to the validity,
form and eligibility of the notices, and our determination will be final and
binding on all parties. We will not deem any properly withdrawn private notes to
have been validly tendered for purposes of the exchange offer, and we will not
issue exchange notes with respect to those private notes, unless you validly
retender the withdrawn private notes. You may retender properly withdrawn
private notes by following one of the procedures described above under
"--Procedures for Tendering" at any time before the expiration date.

CONDITIONS

    Notwithstanding any other term of the exchange offer, we will not be
required to accept for exchange, or exchange the exchange notes for, any private
notes, and may terminate the exchange offer as provided in this prospectus
before the acceptance of the private notes, if, in our reasonable judgment, the
exchange offer violates applicable law, rules or regulations or an applicable
interpretation of the staff of the SEC.

    If we determine in our reasonable discretion that any of these conditions
are not satisfied, we may:

    - refuse to accept any private notes and return all tendered private notes
      to you;

    - extend the exchange offer and retain all private notes tendered before the
      exchange offer expires, subject, however, to your rights to withdraw the
      private notes; or

    - waive the unsatisfied conditions with respect to the exchange offer and
      accept all properly tendered private notes that have not been withdrawn.

    If the waiver constitutes a material change to the exchange offer, we will
promptly disclose the waiver by means of a prospectus supplement that we will
distribute to the registered holders of the private notes, and we will extend
the exchange offer for a period of five to ten business days, depending upon the
significance of the waiver and the manner of disclosure to the registered
holders, if the exchange offer would otherwise expire during the five to ten
business day period.

TERMINATION OF RIGHTS

    All of your rights under the registration rights agreement will terminate
upon consummation of the exchange offer except with respect to our continuing
obligations:

    - to indemnify you and parties related to you against liabilities, including
      liabilities under the Securities Act; and

    - to provide, upon your request, the information required by
      Rule 144A(d)(4) under the Securities Act to permit resales of the notes
      pursuant to Rule 144A.

SHELF REGISTRATION

    If:

    (1) we and the guarantors are not permitted to consummate the exchange offer
       because the exchange offer is not permitted by applicable law or SEC
       policy; or

                                       36

    (2) any holder of transfer restricted securities notifies us prior to the
       20th day following consummation of the exchange offer that:

       (a) it is prohibited by law or SEC policy from participating in the
           exchange offer; or

       (b) that it may not resell the exchange notes acquired by it in the
           exchange offer to the public without delivering a prospectus and the
           prospectus contained in the exchange offer registration statement is
           not appropriate or available for such resales; or

       (c) that it is a broker-dealer and owns private notes acquired directly
           from us or an affiliate of us,

we and the guarantors will file with the SEC a shelf registration statement to
cover resales of the private notes by the holders thereof who satisfy certain
conditions relating to the provision of information in connection with the shelf
registration statement.

    For purposes of the preceding, "transfer restricted securities" means each
private note until:

    (1) the date on which such note has been exchanged by a person other than a
       broker-dealer for an exchange note in the exchange offer;

    (2) following the exchange by a broker-dealer in the exchange offer of a
       private note for an exchange note, the date on which such exchange note
       is sold to a purchaser who receives from such broker-dealer on or prior
       to the date of such sale a copy of the prospectus contained in the
       exchange offer registration statement;

    (3) the date on which such private note has been effectively registered
       under the Securities Act and disposed of in accordance with the shelf
       registration statement; or

    (4) the date on which such private note is distributed to the public
       pursuant to Rule 144 under the Securities Act.

LIQUIDATED DAMAGES

    If:

    (1) we and the guarantors fail to file any of the registration statements
       required by the registration rights agreement on or before the date
       specified for such filing; or

    (2) any of such registration statements is not declared effective by the SEC
       on or prior to the date specified for such effectiveness; or

    (3) we and the guarantors fail to consummate the exchange offer within
       40 days after the exchange offer registration statement is declared
       effective; or

    (4) the shelf registration statement or the exchange offer registration
       statement is declared effective but thereafter ceases to be effective or
       usable in connection with resales or exchanges of transfer restricted
       securities during the periods specified in the registration rights
       agreement (each such event referred to in clauses (1) through (4) above,
       a "registration default");

then we and the guarantors will pay liquidated damages to each holder of
outstanding notes ("liquidated damages") during the period of one or more
registration defaults, with respect to the first 90-day period immediately
following the occurrence of the first registration default in an amount equal to
0.25% per annum (which amount will be increased by an additional 0.25% per annum
for each subsequent 90-day period that any liquidated damages continue to
accrue; provided that the amounts at which liquidated damages accrue may in no
event exceed 1.0% per annum) in respect of the transfer restricted securities
held by such holder until the applicable registration statement is filed, the
exchange

                                       37

offer registration statement is declared effective and the exchange offer is
consummated or the shelf registration statement is declared effective or again
becomes effective, as the case may be.

EXCHANGE AGENT

    We have appointed U.S. Bank National Association as exchange agent for the
exchange offer. You should direct questions and requests for assistance,
requests for additional copies of this prospectus or the letter of transmittal
and requests for a notice of guaranteed delivery to the exchange agent addressed
as follows:

                                            

      BY REGISTERED OR CERTIFIED MAIL:                       BY HAND DELIVERY:
       U.S. Bank National Association                 U.S. Bank National Association
            180 East Fifth Street                          180 East Fifth Street
          St. Paul, Minnesota 55101                      St. Paul, Minnesota 55101
  Attention: Corporate Trust Administration      Attention: Corporate Trust Administration

           BY OVERNIGHT DELIVERY:                              BY FACSIMILE:
       U.S. Bank National Association                         (651) 244-0711
            180 East Fifth Street                  Attn: Corporate Trust Administration
          St. Paul, Minnesota 55101                        CONFIRM BY TELEPHONE:
  Attention: Corporate Trust Administration                   (651) 244-8677



    Delivery to an address other than the one stated above or transmission via a
facsimile number other than the one stated above will not constitute a valid
delivery.

FEES AND EXPENSES

    We will bear the expenses of soliciting tenders. We are making the principal
solicitation by mail; however, our officers and regular employees may make
additional solicitations by facsimile, telephone or in person.

    We have not retained any dealer manager in connection with the exchange
offer and will not make any payments to brokers, dealers or others soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and will reimburse it for its
reasonable out-of-pocket expenses.

    We will pay the cash expenses incurred in connection with the exchange offer
which we estimate to be approximately $250,000. These expenses include
registration fees, fees and expenses of the exchange agent and the trustee,
accounting and legal fees and printing costs, among others.

    We will pay all transfer taxes, if any, applicable to the exchange of notes
pursuant to the exchange offer. If, however, a transfer tax is imposed for any
reason other than the exchange of the private notes pursuant to the exchange
offer, then you must pay the amount of the transfer taxes. If you do not submit
satisfactory evidence of payment of the taxes or exemption from payment with the
letter of transmittal, we will bill the amount of the transfer taxes directly to
you.

CONSEQUENCE OF FAILURES TO EXCHANGE

    Participation in the exchange offer is voluntary. We urge you to consult
your financial and tax advisors in making your decisions on what action to take.
Private notes that are not exchanged for

                                       38

exchange notes pursuant to the exchange offer will remain restricted securities.
Accordingly, those private notes may be resold only:

    - to a person whom the seller reasonably believes is a qualified
      institutional buyer in a transaction meeting the requirements of
      Rule 144A;

    - in a transaction meeting the requirements of Rule 144 under the Securities
      Act;

    - outside the United States to a foreign person in a transaction meeting the
      requirements of Rule 903 or 904 of Regulation S under the Securities Act;

    - in accordance with another exemption from the registration requirements of
      the Securities Act and based upon an opinion of counsel if we so request;

    - to us; or

    - pursuant to an effective registration statement.

    In each case, the private notes may be resold only in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction.

                                USE OF PROCEEDS

    The exchange offer satisfies an obligation under the registration rights
agreement. We will not receive any cash proceeds from the exchange offer.

                                       39

                  CAPITALIZATION OF OWENS-ILLINOIS GROUP, INC.

    The following table presents, as of December 31, 2001, the (1) actual
consolidated capitalization of OI Group and (2) capitalization of OI Group as
adjusted to reflect the offering of the private notes and the application of the
estimated net proceeds therefrom. You should read this table in conjunction with
the Consolidated Financial Statements and the notes thereto included elsewhere
in this prospectus. For more information, see also the section entitled
"Selected Consolidated Financial Data of Owens-Illinois Group, Inc."



                                                               AT DECEMBER 31, 2001
                                                              ----------------------
                                                               ACTUAL    AS ADJUSTED
                                                              --------   -----------
                                                                  (IN MILLIONS)
                                                                   
Current debt:
  Short-term loans..........................................  $   40.4    $   40.4
  Long-term debt due within one year........................      30.8        30.8
                                                              --------    --------
  Total current debt........................................  $   71.2    $   71.2
                                                              ========    ========
Long-term debt:
  Senior Secured Credit Facility:
    Revolving Credit Agreement (a)..........................  $2,410.4    $2,410.4
    Term Loan...............................................   1,045.0        65.0 (b)
                                                              --------    --------
      Total Senior Secured Credit Facility..................   3,455.4     2,475.4
  8 7/8% Senior Secured Notes...............................               1,000.0
  Payable to OI Inc.........................................   1,700.0     1,700.0
  Other.....................................................     174.3       174.3
                                                              --------    --------
      Total long-term debt..................................   5,329.7     5,349.7
Share owner's equity:
  Common stock, par value $.01 per share, 1,000 shares
    authorized, 100 shares issued and outstanding...........        --          --
  Capital in excess of par value............................   1,735.1     1,735.1
  Retained earnings.........................................   1,163.2     1,156.2 (c)
  Accumulated other comprehensive income (loss).............    (576.3)     (576.3)
                                                              --------    --------
      Total share owner's equity............................   2,322.0     2,315.0
                                                              --------    --------
Total capitalization........................................  $7,651.7    $7,664.7
                                                              ========    ========


- --------------------------

(a) At December 31, 2001, OI Group had unused borrowing capacity of
    $491.4 million available under the secured credit agreement.

(b) Reflects repayment of a portion of the outstanding term loan with the
    proceeds of the offering of private notes, net of estimated fees and
    expenses of $20.0 million.

(c) Reflects the write-off of unamortized finance fees of $11.2 million less tax
    benefits of $4.2 million.

                                       40

                    SELECTED CONSOLIDATED FINANCIAL DATA OF
                           OWENS-ILLINOIS GROUP, INC.

    The selected consolidated financial data presented below relates to each of
the five years in the period ended December 31, 2001. Such data was derived from
the Consolidated Financial Statements, of which the most recent three years,
including balance sheets at December 31, 2001 and 2000, are included elsewhere
in this document and were audited by Ernst & Young LLP, independent auditors,
whose report with respect to the financial statements appears elsewhere in this
document. For more information, see the "Consolidated Financial Statements"
included elsewhere in this prospectus.



                                                                     YEARS ENDED DECEMBER 31,
                                                                  ------------------------------
                                                         2001       2000       1999     1998 (A)   1997 (B)
                                                       --------   --------   --------   --------   --------
                                                                      (DOLLARS IN MILLIONS)
                                                                                    
CONSOLIDATED OPERATING RESULTS:
Net sales............................................  $5,402.5   $5,552.1   $5,522.9   $5,306.3   $4,658.5
Other revenue (c)....................................     610.8      262.7      263.8      193.0      169.9
                                                       --------   --------   --------   --------   --------
                                                        6,013.3    5,814.8    5,786.7    5,499.3    4,828.4
Costs and expenses:
Manufacturing, shipping and delivery.................   4,218.4    4,359.1    4,296.4    4,075.6    3,666.4
Research, engineering, selling, administrative and
  other (d)..........................................     693.7      810.6      566.6      584.7      407.0
                                                       --------   --------   --------   --------   --------
Earnings before interest expense and items below.....   1,101.2      645.1      923.7      839.0      755.0
Interest expense (e).................................     434.0      486.7      425.9      380.0      302.7
                                                       --------   --------   --------   --------   --------
Earnings before items below..........................     667.2      158.4      497.8      459.0      452.3
Provision for income taxes (f).......................     286.4       64.1      185.5      162.3      148.5
Minority share owners' interests in earnings of
  subsidiaries.......................................      20.1       22.0       13.2       20.2       31.4
                                                       --------   --------   --------   --------   --------
Earnings before extraordinary items..................     360.7       72.3      299.1      276.5      272.4
Extraordinary charges from early extinguishment of
  debt, net of applicable income taxes...............      (4.1)                 (0.8)     (14.1)    (104.5)
                                                       --------   --------   --------   --------   --------
Net earnings.........................................  $  356.6   $   72.3   $  298.3   $  262.4   $  167.9
                                                       ========   ========   ========   ========   ========
OTHER DATA:
Cash provided by operating activities................  $  620.3   $  541.7   $  677.3   $  716.9   $  517.2
EBIT (g).............................................  $1,074.3      612.6      895.2      809.8      731.4
EBITDA (h)...........................................   1,598.1    1,152.0    1,431.6    1,266.3    1,070.8
Adjusted EBIT (i)....................................  $  764.3      860.9      875.2      870.5      729.2
Adjusted EBITDA (j)..................................   1,288.1    1,400.3    1,411.6    1,327.0    1,068.6
Depreciation.........................................     403.2      412.6      403.7      358.5      283.5
Amortization of excess cost and intangibles..........     120.6      126.8      132.7       98.0       55.9
Amortization of deferred finance fees (included in
  interest expense)..................................      19.9       10.1        8.9        7.4        4.1
Additions to property, plant and equipment...........     531.9      481.4      650.4      573.5      471.3
Ratio of total debt to Adjusted EBITDA...............       4.2x       4.2x       4.2x       4.5x       3.1x
Ratio of Adjusted EBITDA to interest expense.........       3.0x       2.9x       3.3x       3.5x       3.5x
Ratio of earnings to fixed charges (k)...............       2.5x       1.3x       2.1x       2.1x       2.4x
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital......................................  $    899   $    881   $    892   $    905   $    660
Total assets.........................................     9,993     10,080     10,521     10,818      6,576
Total debt...........................................     5,401      5,850      5,939      5,917      3,324
Share owner's equity.................................     2,322      2,107      2,327      2,522      1,273


- --------------------------

(a) Results of operations and other data since April 1998 include the
    acquisition of the worldwide glass and plastics packaging businesses of BTR
    plc and the related financings.

(b) Results of operations and other data since January 1997 include the
    acquisition of AVIR S.p.A.

(c) Other revenue in 2001 includes: (1) a gain of $457.3 million
    ($284.4 million after tax) related to the sale of the Harbor Capital
    Advisors business; and (2) gains totaling $13.1 million ($12.0 million after
    tax) related to the sale of the label business and the sale of a minerals
    business in Australia.

    Other revenue in 1999 includes gains totaling $40.8 million ($23.6 million
    after tax and minority share owners' interests) related to the sales of a
    U.S. glass container plant and a mold manufacturing business in Colombia.

    Other revenue in 1998 includes: (1) a gain of $18.5 million ($11.4 million
    after tax) related to the termination of a license agreement, net of charges
    for related equipment write-offs and capacity adjustments, under which OI
    Group had produced plastic multipack carriers for beverage cans; and (2) a
    loss of $5.7 million ($3.5 million after tax) on the sale of a discontinued
    operation by an equity investee.

                                       41

    Other revenue in 1997 includes a gain of $16.3 million (pretax and after
    tax) from the sale of the remaining 49% interest in Kimble Glass.

(d) Amount for 2001 includes: (1) charges of $82.1 million ($65.3 million after
    tax and minority share owners' interests) related to restructuring and
    impairment charges at certain international glass operations, principally
    Venezuela and Puerto Rico, as well as certain other domestic and
    international operations; (2) a charge of $31.0 million (pretax and after
    tax) related to the loss on the sale of facilities in India; (3) charges of
    $30.9 million ($19.4 million after tax) related to special employee benefit
    programs; (4) a charge of $8.5 million ($5.3 million after tax) for certain
    contingencies; and (5) a charge of $7.9 million ($4.9 million after tax)
    related to restructuring manufacturing capacity in the medical devices
    business.

    In 2000, OI Group recorded pretax charges totaling $248.3 million
    ($171.0 million after tax and minority share owners' interests) for the
    following: (1) $122.4 million ($77.3 million after tax and minority share
    owners' interests) related to the consolidation of manufacturing capacity;
    (2) a net charge of $52.4 million ($32.6 million after tax) related to early
    retirement incentives and special termination benefits for 350 U.S. salaried
    employees; (3) $40.0 million (pretax and after tax) related to the
    impairment of property, plant and equipment at facilities in India; and
    (4) $33.5 million ($21.1 million after tax and minority share owners'
    interests) related principally to the write-off of software and related
    development costs.

    Amount for 1999 includes charges totaling $20.8 million ($14.0 million after
    tax and minority share owners' interests) related principally to
    restructuring costs and write-offs of certain assets in Europe and South
    America.

    In 1998, OI Group recorded: (1) charges of $72.6 million ($47.4 million
    after tax and minority share owners' interests) related principally to a
    plant closing in the U.K. and restructuring costs at certain international
    affiliates; and (2) a net charge of $0.9 million ($0.6 million after tax)
    for the settlement of certain environmental litigation and the reduction of
    previously established reserves for guarantees of certain lease obligations
    of a previously divested business.

    In 1997, OI Group recorded charges of $14.1 million ($8.7 million after tax)
    principally for guarantees of certain lease obligations of a previously
    divested business.

(e) Amount for 2001 includes a net interest charge of $4.0 million
    ($2.8 million after tax) related to interest on the resolution of the
    transfer of pension assets and liabilities for a previous acquisition and
    divestiture.

(f) Amount for 2001 includes a $6.0 million charge to adjust tax liabilities in
    Italy as a result of recent legislation.

    Amount for 2000 includes a fourth quarter benefit of $9.3 million to adjust
    net income tax liabilities in Italy as a result of recent legislation.

    In 1998, OI Group recorded a credit of $15.1 million to adjust net deferred
    income tax liabilities as a result of a reduction in Italy's statutory
    income tax rate.

(g) EBIT consists of consolidated earnings before interest income, interest
    expense, provision for income taxes, minority share owners' interests in
    earnings of subsidiaries and extraordinary charges.

(h) EBITDA consists of EBIT before depreciation and amortization of excess cost
    and intangibles. EBITDA is presented because OI Group believes it is
    frequently used by securities analysts, investors and other interested
    parties in the evaluation of companies in OI Group's industry. However,
    other companies in OI Group's industry may calculate EBITDA differently than
    OI Group does. EBITDA is not a measurement of financial performance under
    generally accepted accounting principles and should not be considered as an
    alternative to cash flow from operating activities or as a measure of
    liquidity or an alternative to net income as indicators of OI Group's
    operating performance or any other measures of performance derived in
    accordance with generally accepted accounting principles. See "Consolidated
    Financial Statements--Consolidated Cash Flows."

                                       42

(i) OI Group evaluates performance and allocates resources based on EBIT
    excluding unusual items ("Adjusted EBIT"). Unusual items consist of the
    gains, losses and charges discussed in Notes (c) and (d) above. The
    reconciliation from EBIT to Adjusted EBIT is as follows:



                                                                    YEARS ENDED DECEMBER 31,
                                                                 ------------------------------
                                                        2001       2000       1999       1998       1997
                                                      --------   --------   --------   --------   --------
                                                                               (IN MILLIONS)
                                                                                   
EBIT................................................  $1,074.3    $612.6     $895.2     $809.8     $731.4
Add (deduct):
  Gain on sale of Harbor Capital Advisors
    business........................................    (457.3)
  Gains on sales of label business and minerals
    business........................................     (13.1)
  Gains on sale of glass plant and mold business....                          (40.8)
  Net gain on termination of license agreement......                                     (18.5)
  Sale of discontinued operations by equity
    investee........................................                                       5.7
  Gain on sale of 49% interest in Kimble Glass......                                                (16.3)
  Restructuring and impairment, principally
    international glass.............................      82.1
  Loss on the sale of facilities in India...........      31.0
  Special employee benefit programs.................      30.9
  Charges related to certain contingencies..........       8.5
  Restructuring manufacturing capacity in the
    medical devices business........................       7.9
  Consolidation of manufacturing capacity...........               122.4
  Early retirement incentives/special termination
    benefits........................................                52.4
  Impairment of property, plant and equipment in
    India...........................................                40.0
  Write-off of software and related development
    costs...........................................                33.5
  Restructuring and asset write-offs in Europe/South
    America.........................................                           20.8
  U.K. plant closing and international
    restructuring...................................                                      72.6
  Settle environmental litigation/reduce reserve for
    guarantees......................................                                       0.9
  Charge for guarantees of lease obligations........                                                 14.1
                                                      --------    ------     ------     ------     ------
Adjusted EBIT.......................................  $  764.3    $860.9     $875.2     $870.5     $729.2
                                                      ========    ======     ======     ======     ======


- --------------------------

(j) Adjusted EBITDA represents EBITDA excluding the unusual gains, losses and
    charges discussed in Notes (c) and (d) and summarized in Note (i) above.
    Adjusted EBITDA is presented because OI Group believes it is frequently used
    by securities analysts, investors and other interested parties in the
    evaluation of companies in OI Group's industry. However, other companies in
    OI Group's industry may present Adjusted EBITDA differently than OI Group
    does. Adjusted EBITDA is not a measurement of financial performance under
    generally accepted accounting principles and should not be considered as an
    alternative to cash flow from operating activities or as a measure of
    liquidity or an alternative to net income as indicators of OI Group's
    operating performance or any other measures of performance derived in
    accordance with generally accepted accounting principles. See "Consolidated
    Financial Statements--Consolidated Cash Flows."

(k) For purposes of these computations, earnings consist of earnings before
    income taxes, minority share owners' interests in earnings of subsidiaries
    and extraordinary items plus fixed charges. Fixed charges consist primarily
    of interest on indebtedness, including amortization of deferred finance
    fees, plus that portion of lease rental expense representative of the
    interest factor. Pretax earnings and fixed charges also include the
    proportional share of 50%-owned investees.

                                       43

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
                           OWENS-ILLINOIS GROUP, INC.

RESULTS OF OPERATIONS

    COMPARISON OF 2001 WITH 2000

    For the year ended December 31, 2001, OI Group recorded earnings of
$360.7 million before an extraordinary item compared to net earnings of
$72.3 million for 2000. Net earnings of $356.6 million for 2001 reflect
$4.1 million of an extraordinary charge from the early extinguishment of debt.
Excluding the effects of unusual items for both 2001 and 2000 discussed in the
table below, OI Group's 2001 earnings of $199.0 million before an extraordinary
item decreased $35.0 million, or 15.0%, from 2000 earnings of $234.0 million.

    The following table lists unusual items (in millions of dollars) recorded in
2001 and 2000, and their related effects on both EBIT and earnings before
extraordinary items. EBIT is defined as earnings before interest income,
interest expense, provision for income taxes, minority share owners' interest in
earnings of subsidiaries, and extraordinary charges.



                                                                 2001                    2000
                                                       ------------------------   -------------------
                                                                    EARNINGS
                                                                     BEFORE
                                                                  EXTRAORDINARY
                                                         EBIT         ITEM          EBIT     EARNINGS
                                                       --------   -------------   --------   --------
                                                                                 
As reported..........................................  $1,074.3      $ 360.7       $612.6     $ 72.3
Unusual items--charges (credits):
  Gain on the sale of the Harbor Capital Advisors
    business.........................................    (457.3)      (284.4)
  Gain on the sale of the label business and the sale
    of a minerals business in Australia..............     (13.1)       (12.0)
  Restructuring and impairment charges at certain
    international and domestic operations............      82.1         65.3
  Loss on the sale of facilities in India............      31.0         31.0
  Special employee benefit programs..................      30.9         19.4
  Charges related to certain contingencies...........       8.5          5.3
  Restructuring manufacturing capacity in the medical
    devices business.................................       7.9          4.9
  Charges to adjust net income tax liabilities in
    Italy............................................                    6.0
  Net interest on the resolution of the transfer of
    pension assets and liabilities for a previous
    acquisition......................................                    2.8
  Charges related to consolidation of manufacturing
    capacity.........................................                               122.4       77.3
  Charges related to early retirement incentives and
    special termination benefits.....................                                52.4       32.6
  Charges related to impairment of property, plant,
    and equipment in India...........................                                40.0       40.0
  Other charges, principally related to the write-off
    of software......................................                                33.5       21.1
  Benefit related to an adjustment of tax liabilities
    in Italy as a result of recent legislation.......                                           (9.3)
                                                       --------      -------       ------     ------
  Before unusual items...............................  $  764.3      $ 199.0       $860.9     $234.0
                                                       ========      =======       ======     ======


    Consolidated EBIT, excluding unusual items, for 2001 was $764.3 million, a
decrease of $96.6 million, or 11.2%, compared to 2000 EBIT, excluding unusual
items, of $860.9 million. The decrease is attributable to lower EBIT for both
the Glass Containers segment and the Plastics Packaging segment. Results of both
segments are discussed further below. Interest expense, net of

                                       44

interest income and unusual items, decreased $51.1 million from 2000 due
principally to lower interest rates and decreased levels of debt. Exclusive of
the adjustment for net income tax liabilities in Italy and other unusual items
previously discussed, the effective tax rate for 2001 was 38.1%. This compares
with a rate of 36.9% for 2000, excluding the adjustment for net income tax
liabilities in Italy and other unusual items. The increase in the 2001 rate
compared to 2000 is primarily the result of the non-recurrence of certain
international and domestic tax benefits and credits.

    Capsule segment results (in millions of dollars) for 2001 and 2000 were as
follows (a):



NET SALES TO UNAFFILIATED CUSTOMERS                             2001       2000
- -----------------------------------                           --------   --------
                                                                   
Glass Containers............................................  $3,571.2   $3,695.6
Plastics Packaging..........................................   1,817.5    1,787.6
Other.......................................................      13.8       68.9
                                                              --------   --------
Segment and consolidated net sales..........................  $5,402.5   $5,552.1
                                                              --------   --------




EBIT(B)                                                       2001(C)    2000(D)
- -------                                                       --------   --------
                                                                   
Glass Containers............................................  $  489.9   $  401.2
Plastics Packaging..........................................     218.1      238.0
Other.......................................................     (13.3)       1.1
                                                              --------   --------
Segment EBIT................................................     694.7      640.3
  Eliminations and other retained items.....................     379.6      (27.7)
                                                              --------   --------
Consolidated EBIT...........................................  $1,074.3   $  612.6
                                                              --------   --------


- ------------------------

(a) See "Consolidated Financial Statements--Segment Information."

(b) EBIT consists of consolidated earnings before interest income, interest
    expense, provision for income taxes, minority share owners' interests in
    earnings of subsidiaries and extraordinary charges.

(c) Amount for 2001 includes: (1) a gain of $457.3 million related to the sale
    of the Harbor Capital Advisors business; (2) a $10.3 million gain from the
    sale of a minerals business in Australia; (3) a $2.8 million gain from the
    sale of the label business; (4) charges of $82.1 million related to
    restructuring and impairment charges at certain international glass
    operations, principally Venezuela and Puerto Rico, as well as certain other
    domestic and international operations; (5) a charge of $31.0 million related
    to the loss on the sale of facilities in India; (6) charges of
    $30.9 million related to special employee benefit programs; (7) a charge of
    $8.5 million for certain contingencies; and (8) a charge of $7.9 million
    related to restructuring manufacturing capacity in the medical devices
    business.

    Such charges (gains) are included as follows in consolidated EBIT for 2001
    (in millions of dollars):

                                                           
Glass Containers............................................  $   92.6
Plastics Packaging..........................................      29.8
Other.......................................................       5.1
                                                              --------
  Total Product Segments....................................     127.5
Eliminations and other retained items.......................    (437.5)
                                                              --------
  Consolidated Totals.......................................  $ (310.0)
                                                              ========



(d) Amount for 2000 includes charges totaling $248.3 million for the following:
    (1) $122.4 million related to the consolidation of manufacturing capacity;
    (2) a net charge of $52.4 million related to early retirement incentives and
    special termination benefits for 350 U.S. salaried employees;
    (3) $40.0 million related to the impairment of property, plant and equipment
    at facilities in India;

                                       45

    and (4) $33.5 million related principally to the write-off of software and
    related development costs. These items were recorded in the third quarter of
    2000. Such items are included as follows in consolidated EBIT for 2000 (in
    millions of dollars):

                                                           
Glass Containers............................................  $186.0
Plastics Packaging..........................................    11.2
                                                              ------
  Total Product Segments....................................   197.2
Eliminations and other retained items.......................    51.1
                                                              ------
  Consolidated Totals.......................................  $248.3
                                                              ======



    Consolidated net sales for 2001 decreased $149.6 million, or 2.7%, over the
prior year. Net sales of the Glass Containers segment decreased $124.4 million
from 2000. In North America, the additional sales from the acquisition of the
Canadian operations were more than offset by decreased shipments of containers
for beer producers and conversions of certain juice and iced tea from glass to
plastic containers. The combined U.S. dollar sales of the segment's foreign
affiliates decreased from the prior year. Increased shipments from operations
throughout most of Europe and South America were more than offset by the effects
of a strong U.S. dollar and lower shipments from operations in the United
Kingdom and most of the Asia Pacific region. The effect of changing foreign
currency exchange rates reduced U.S. dollar sales of the segment's foreign
affiliates by approximately $140 million. Net sales of the Plastics Packaging
segment increased $29.9 million, or 1.7%, over 2000, reflecting increased
shipments of plastic containers and closures for food and health care, as well
as prescription products, and the effects of higher resin costs on pass-through
arrangements with customers, partially offset by lower shipments of plastic
containers for juice and other beverages and the effect of changing foreign
currency exchange rates, principally in Australia. The effects of higher resin
costs increased sales by approximately $32 million compared to 2000.

    Segment EBIT for 2001, excluding the 2001 and 2000 unusual items, decreased
$15.3 million to $822.2 million, or 15.2% of net sales, from 2000 segment EBIT
of $837.5 million, or 15.1% of net sales. Consolidated operating expense
(consisting of selling and administrative, engineering, and research and
development expenses) as a percentage of net sales was 7.7% in 2001 compared to
6.5% in 2000. The increase in operating expenses is attributed to lower pension
income and higher costs of certain employee benefit programs. EBIT of the Glass
Containers segment decreased $4.7 million, or 0.8%, to $582.5 million, compared
to $587.2 million in 2000. The combined U.S. dollar EBIT of the segment's
foreign affiliates increased from prior year. Increased shipments from
operations throughout most of Europe and South America were partially offset by
the effects of a strong U.S. dollar, higher energy costs worldwide, and lower
shipments from operations in the United Kingdom and most of the Asia Pacific
region. In the United States, Glass Container EBIT decreased from 2000
principally due to higher energy costs, which have not been fully recovered
through price adjustments. EBIT of the Plastics Packaging segment decreased
$1.3 million, or 0.5%, to $247.9 million, compared to $249.2 million in 2000.
Increased shipments of plastic containers and closures for food and health care,
as well as prescription products, were more than offset by lower shipments of
plastic containers for juice and other beverages and one-time costs associated
with the relocation of a U.S. manufacturing operation to a new and larger
facility to accommodate a growing business base.

    Eliminations and other retained items, excluding the 2001 and 2000 unusual
items, declined $81.3 million from 2000 reflecting lower net financial services
income due to the sale of the Harbor Capital Advisors business, higher spending
on information systems, and certain employee benefit costs increases.

    The 2001 results include a net pretax gain of $310.0 million
($170.5 million after tax and minority share owners' interest) for the
following: (1) a gain of $457.3 million ($284.4 million after tax) related to
the sale of the Harbor Capital Advisors business; (2) gains totaling
$13.1 million ($12.0 million after

                                       46

tax) related to the sale of the label business and the sale of a minerals
business in Australia; (3) charges of $82.1 million ($65.3 million after tax and
minority share owners' interests) related to restructuring and impairment
charges at certain international glass operations, principally Venezuela and
Puerto Rico, as well as certain other domestic and international operations;
(4) a charge of $31.0 million (pretax and after tax) related to the loss on the
sale of facilities in India; (5) charges of $30.9 million ($19.4 million after
tax) related to special employee benefit programs; (6) a charge of $8.5 million
($5.3 million after tax) for certain contingencies; and (7) a charge of
$7.9 million ($4.9 million after tax) related to restructuring manufacturing
capacity in the medical devices business.

    The 2000 results include pretax charges totaling $248.3 million
($171.0 million after tax and minority share owners' interests) for the
following: (1) $122.4 million ($77.3 million after tax and minority share
owners' interests) related to the consolidation of manufacturing capacity;
(2) a net charge of $52.4 million ($32.6 million after tax) related to early
retirement incentives and special termination benefits for 350 United States
salaried employees; (3) $40.0 million (pretax and after tax) related to the
impairment of property, plant and equipment at facilities in India; and
(4) $33.5 million ($21.1 million after tax and minority share owners' interests)
related principally to the write-off of software and related development costs.

    COMPARISON OF 2000 WITH 1999

    For the year ended December 31, 2000, OI Group recorded net earnings of
$72.3 million compared to earnings before extraordinary items of $299.1 million
for 1999. Net earnings of $298.3 million for 1999 reflect $0.8 million of
extraordinary charges from the early extinguishment of debt. Excluding the
effects of unusual items for both 2000 and 1999 discussed in the table below, OI
Group's 2000 earnings of $234.0 million decreased $55.5 million, or 19.2%, from
1999 earnings before extraordinary items of $289.5 million.

    The 2000 results include the unusual items discussed above. The 1999 results
included the following unusual items: (1) gains totaling $40.8 million
($23.6 million after tax and minority share owners' interests) related to the
sales of a U.S. glass container plant and a mold manufacturing business in
Colombia and (2) charge totaling $20.8 million ($14.0 million after tax and
minority share owners' interests) related principally to restructuring costs and
write-offs of certain assets in Europe and South America.

    Consolidated EBIT, excluding unusual items, for 2000 was $860.9 million, a
decrease of $14.3 million, or 1.6%, compared to consolidated EBIT for 1999,
excluding unusual items, of $875.2 million. The decrease is attributable to
lower EBIT for the Plastics Packaging segment, partially offset by slightly
higher EBIT for the Glass Containers segment. Results of both segments are
discussed further below. Interest expense, net of interest income, increased
$56.8 million from the 1999 period due principally to higher interest rates. The
$8.8 million increase in minority share owners' interests in earnings of
subsidiaries resulted from higher net earnings of certain foreign affiliates,
principally the affiliates in Colombia, Venezuela and Brazil. Exclusive of the
adjustment for net income tax liabilities in Italy and other unusual items
previously discussed, the effective tax rate for 2000 was 36.9%. This compares
with a rate of 36.9% for 1999, excluding unusual items.

                                       47

    Capsule segment results (in millions of dollars) for 2000 and 1999 were as
follows (a):



NET SALES TO UNAFFILIATED CUSTOMERS                             2000       1999
- -----------------------------------                           --------   --------
                                                                   
Glass Containers............................................  $3,695.6   $3,762.6
Plastics Packaging..........................................   1,787.6    1,686.7
Other.......................................................      68.9       73.6
                                                              --------   --------
Segment and consolidated net sales..........................  $5,552.1   $5,522.9
                                                              --------   --------




EBIT                                                          2000(B)      1999
- ----                                                          --------   --------
                                                                   
Glass Containers............................................  $  401.2   $  602.4(c)
Plastics Packaging..........................................     238.0      277.7
Other.......................................................       1.1        9.2
                                                              --------   --------
Segment EBIT................................................     640.3      889.3
  Eliminations and other retained items.....................     (27.7)       5.9
                                                              --------   --------
Consolidated EBIT...........................................  $  612.6   $  895.2
                                                              --------   --------


- ------------------------

(a) See "Consolidated Financial Statements--Segment Information."

(b) EBIT for 2000 includes charges totaling $248.3 million for the following:
    (1) $122.4 million related to the consolidation of manufacturing capacity;
    (2) a net charge of $52.4 million related to early retirement incentives and
    special termination benefits for 350 U.S. salaried employees;
    (3) $40.0 million related to the impairment of property, plant and equipment
    at facilities in India; and (4) $33.5 million related principally to the
    write-off of software and related development costs. These items were
    recorded in the third quarter of 2000. These items decreased segment EBIT as
    follows: Glass Containers--$186.0 million; Plastics
    Packaging--$11.2 million; Eliminations and other retained
    items--$51.1 million.

(c) EBIT for 1999 includes: (1) gains totaling $40.8 million related to the
    sales of a U.S. glass container plant and a mold manufacturing business in
    Colombia; and (2) charges totaling $20.8 million related principally to
    restructuring costs and write-offs of certain assets in Europe and South
    America.

    Consolidated net sales for 2000 increased $29.2 million, or 0.5%, over the
prior year. Net sales of the Glass Containers segment decreased $67.0 million
from 1999. In the U.S., the effect of increased shipments of containers for beer
producers was partially offset by lower shipments of certain food containers.
The combined U.S. dollar sales of the segment's foreign affiliates decreased
from the prior year due to the strength of the U.S. dollar. Increased shipments
from the operations throughout most of Europe, South America and the Asia
Pacific region were more than offset by lower shipments from the operations in
the U.K. and the effects of a strong U.S. dollar. The effect of changing foreign
currency exchange rates reduced U.S. dollar sales of the segment's foreign
affiliates by approximately $230 million. Net sales of the Plastics Packaging
segment increased $100.9 million, or 6.0%, over 1999, reflecting increased
shipments of plastic containers for juices, closures for food and beverages, and
the effects of higher resin costs on pass-through arrangements with customers,
partially offset by lower shipments of household, health care and personal care
containers. The effects of higher resin costs increased sales by approximately
$90 million compared to 1999.

    Segment EBIT for 2000, excluding the 2000 and 1999 unusual items, decreased
$31.8 million to $837.5 million, or 15.1% of net sales, from 1999 segment EBIT
of $869.3 million, or 15.7% of net sales. Consolidated operating expense
(consisting of selling and administrative, engineering, and research and
development expenses) as a percentage of net sales was 6.5% in 2000 compared to
6.8% in 1999. EBIT of the Glass Containers segment increased $4.8 million, or
0.8%, to $587.2 million, compared to $582.4 million in 1999. The combined U.S.
dollar EBIT of the segment's foreign affiliates increased

                                       48

from the prior year. Increased shipments from the operations throughout most of
Europe, South America, and the Asia Pacific region, and a gain from the
restructuring of the ownership in two small joint ventures in South America were
partially offset by the effects of a strong U.S. dollar, higher energy costs
worldwide, and expenses associated with the scheduled rebuild of a glass melting
furnace in Australia. In the U.S., Glass Container EBIT decreased from 1999
principally due to higher energy costs and conversions of juice and iced tea
bottles from glass to plastic containers, partially offset by further
improvements in cost structure. EBIT of the Plastics Packaging segment decreased
$28.5 million, or 10.3%, to $249.2 million, compared to $277.7 million in 1999.
Increased shipments of plastic containers for juices and closures for food and
beverages were more than offset by lower shipments of household, health care,
and personal care containers and costs incurred in connection with the start-up
of new custom polyethylene terephthalate (PET) capacity, including a new plastic
bottle plant.

    Eliminations and other retained items improved $17.5 million from 1999
principally due to higher net financial services income.

    The 2000 results included pretax charges totaling $248.3 million
($171.0 million after tax and minority share owners' interests) for the
following: (1) $122.4 million ($77.3 million after tax and minority share
owners' interests) related to the consolidation of manufacturing capacity;
(2) a net charge of $52.4 million ($32.6 million after tax) related to early
retirement incentives and special termination benefits for 350 U.S. salaried
employees; (3) $40.0 million ($40.0 million after tax) related to the impairment
of property, plant and equipment at facilities in India; and (4) $33.5 million
($21.1 million after tax and minority share owners' interests) related
principally to the write-off of software and related development costs.

    The 1999 results included the following unusual items: (1) gains totaling
$40.8 million ($23.6 million after tax and minority share owners' interests)
related to the sales of a U.S. glass container plant and a mold manufacturing
business in Colombia; and (2) charges totaling $20.8 million ($14.0 million
after tax and minority share owners' interests) related principally to
restructuring costs and write-offs of certain assets in Europe and South
America.

RESTRUCTURING AND IMPAIRMENT CHARGES

    The 2001 operating results include pretax charges of $90.0 million related
to the following: (1) charges of $82.1 million principally related to a
restructuring program and impairment at certain of the international and
domestic operations. The charge includes the impairment of assets at OI Group's
affiliate in Puerto Rico and the consolidation of manufacturing capacity and the
closing of a facility in Venezuela. The program also includes consolidation of
capacity at certain other international and domestic facilities in response to
decisions about pricing and market strategy and (2) a charge of $7.9 million
related to restructuring manufacturing capacity in the medical devices business.
OI Group expects its actions related to these restructuring and impairment
charges to be completed during the next several quarters.

    2000 operating results included a pretax charge of $248.3 million recorded
in the third quarter, principally related to a restructuring and capacity
realignment program. The restructuring and capacity realignment program,
initiated in the third quarter of 2000, included the consolidation of
manufacturing capacity and a reduction of 350 employees in the U.S. salaried
work force, or about 10%, principally as a result of early retirement
incentives. Also included in the charge was a write-down of plant and equipment
for OI Group's glass container affiliate in India and certain other asset
write-offs, including $27.9 million for software which had been abandoned.
Manufacturing capacity consolidations principally involved U.S. glass container
facilities and reflect technology-driven improvements in productivity,
conversions from some juice and similar products to plastic containers,
decisions regarding pricing and volume, and the further concentration of
production in the most strategically-located facilities.

                                       49

CAPITAL RESOURCES AND LIQUIDITY

    Total debt at December 31, 2001 was $5.40 billion, compared to
$5.85 billion at December 31, 2000.

    During April 2001, certain of OI Group's subsidiaries entered into the
secured credit agreement with a group of banks, which expires on March 31, 2004.
The secured credit agreement provides for a $3.0 billion revolving credit
facility and a $1.5 billion term loan. The borrowers under the term loan used
the proceeds therefrom to repay intercompany amounts owed to OI Inc., which in
turn used the proceeds from the repayment of such intercompany amounts to repay
amounts outstanding under, and terminate, its existing credit agreement.

    At December 31, 2001, term loans and the available credit totaled
$4.045 billion under the secured credit agreement, of which $491.4 million had
not been utilized. At December 31, 2000, $597.8 million of available credit had
not been utilized under OI Inc.'s Second Amended and Restated Credit Agreement.
Cash provided by operating activities was $620.3 million in 2001 compared to
$541.7 million in 2000.

    In June 2001, OI Group completed the sale of its Harbor Capital Advisors
business to Robeco Groep N.V. Harbor Capital Advisors is the adviser to the
Harbor Fund family of mutual funds and the pension funds of several companies,
including OI Inc. OI Group used substantially all the net cash proceeds from the
sale to reduce the outstanding term loan under the secured credit agreement by
$455 million.

    On October 1, 2001, one of OI Group's subsidiaries completed the acquisition
of the Canadian glass container assets of Consumers Packaging Inc. for a
purchase price of approximately $150 million and the assumption of certain
liabilities. The Ontario Superior Court of Justice approved the transaction as
part of a restructuring plan by Consumers Packaging. The purchase price was
financed by borrowings under the secured credit agreement.

    OI Inc. has substantial obligations related to semiannual interest payments
on $1.7 billion of outstanding public debt securities. In addition, OI Inc. pays
aggregate annual dividends of $21.5 million on 9,050,000 shares of its $2.375
convertible preferred stock. OI Inc. also makes, and expects in the future to
make, substantial indemnity payments and payments for legal fees and expenses in
connection with asbestos-related lawsuits and claims. OI Inc.'s asbestos-related
payments for the year ended December 31, 2001, was $245.9 million. OI Inc.
expects that the gross amount of total asbestos-related payments will be
moderately lower in 2002 compared to 2001. OI Inc. relies primarily on
distributions from OI Group to meet these obligations. Based on OI Inc.'s
expectations regarding future payments for lawsuits and claims and its
expectation of the collection of its insurance coverage for partial
reimbursement for such lawsuits and claims, and also based on OI Group's
expected operating cash flow, OI Group believes that the payments to OI Inc. for
any deferred amounts of previously settled or otherwise determined lawsuits and
claims, and the resolution of presently pending and anticipated future lawsuits
and claims associated with asbestos, will not have a material adverse effect
upon OI Group's liquidity on a short-term or long-term basis.

    The secured credit agreement contains covenants and provisions that, among
other things, restrict the ability of OI Group and its subsidiaries to dispose
of assets, incur additional indebtedness, prepay other indebtedness or amend
certain debt instruments, pay dividends, create liens on assets, enter into
contingent obligations, enter into sale and leaseback transactions, make
investments, loans or advances, make acquisitions, engage in mergers or
consolidations, change the business conducted by OI Group and its subsidiaries,
engage in certain transactions with affiliates and otherwise restrict certain
corporate activities. In addition, the secured credit agreement contains
financial covenants that require OI Group and its subsidiaries to maintain,
based upon the financial statements of OI Inc. and its subsidiaries on a
consolidated basis, specified financial ratios and tests, including minimum
fixed charge coverage ratios, maximum leverage ratios, minimum net worth and
specified capital expenditure tests.

    OI Group anticipates that cash flow from its operations and from utilization
of credit available through March 2004 under the secured credit agreement will
be sufficient to fund its operating and seasonal working capital needs, debt
service, and other obligations including payments to OI Inc. described above.

                                       50

    The indenture for the notes will restrict, among other things, the ability
of OI Group and its restricted subsidiaries to borrow money, pay dividends on,
or redeem or repurchase, stock, make investments, create liens, enter into
certain transactions with affiliates and sell certain assets or merge with or
into other companies.

    The following information summarizes OI Group's significant contractual cash
obligations at December 31, 2001 (millions of dollars).



                                                                        PAYMENTS DUE BY PERIOD
                                                              -------------------------------------------
                                                                         LESS THAN
                                                               TOTAL     ONE YEAR    1-3 YEARS   4+ YEARS
                                                              --------   ---------   ---------   --------
                                                                                     
Contractual cash obligations:
  Long-term debt............................................  $5,358.3     $30.8     $2,848.6    $2,478.9
  Capital lease obligations.................................       2.2                    2.2
  Operating leases..........................................     243.1      62.0        120.1        61.0
                                                              --------     -----     --------    --------
    Total contractual cash obligations......................  $5,603.6     $92.8     $2,970.9    $2,539.9
                                                              ========     =====     ========    ========




                                                              AMOUNT OF COMMITMENT EXPIRATION PER PERIOD
                                                              -------------------------------------------
                                                                         LESS THAN
                                                               TOTAL     ONE YEAR    1-3 YEARS   4+ YEARS
                                                              --------   ---------   ---------   --------
                                                                                     
Other commercial commitments:
  Lines of credit...........................................  $2,410.4               $2,410.4
  Standby letters of credit.................................      98.2   $    98.2
  Guarantees................................................      35.3                            $35.3
                                                              --------   ---------   --------     -----
    Total commercial commitments............................  $2,543.9   $    98.2   $2,410.4     $35.3
                                                              ========   =========   ========     =====


EXCESS OF PURCHASE COST OVER NET ASSETS ACQUIRED

    The excess of purchase cost over net assets acquired, net of accumulated
amortization ("goodwill") was $3.0 billion and $3.1 billion at December 31, 2001
and 2000, respectively. This represents 30% and 31% of total assets, and 129%
and 147% of share owner's equity at December 31, 2001 and 2000, respectively.
Goodwill represents the excess of purchase price and related costs over the fair
values assigned to the net tangible and identifiable intangible assets of
businesses acquired, and under accounting standards in effect through 2001, was
amortized over 40 years. In assigning a benefit period to goodwill, OI Group
considers regulatory provisions, the technological environment in which the
acquired company operates, including barriers to new competing entities, the
maturity of the products manufactured by the businesses acquired, and the
effects of obsolescence, demand, competition and other economic factors. OI
Group has determined that no events or circumstances occurred in 2001 to warrant
revised estimates of the goodwill benefit period.

    In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141, "Business Combinations," which is
effective for business combinations initiated after June 30, 2001. Also in
July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets"
("FAS No. 142"), which is effective for goodwill acquired after June 30, 2001.
For goodwill acquired prior to June 30, 2001, FAS No. 142 will be effective for
fiscal years beginning after December 15, 2001. Under FAS No. 142, goodwill and
intangible assets with indefinite lives will no longer be amortized but will be
reviewed annually (or more frequently if impairment indicators arise) for
impairment.

    OI Group estimates that adopting FAS No. 142 will increase 2002 earnings
before the effects of the accounting change by approximately $90 million
compared to 2001 results. OI Group has not completed its assessment of the
effects that adopting FAS No. 142 will have on the reported value of goodwill,
however, OI Group expects that it will record an impairment charge in 2002 in
connection with adopting FAS No. 142.

                                       51

PENSION BENEFIT PLANS FUNDED STATUS

    Because of their funded status, OI Group's principal pension benefit plans
contributed pretax credits to earnings of $97.0 million in 2001, $105.4 million
in 2000 and $74.4 million in 1999. OI Group expects that the amount of such
credits for 2002 will be approximately 20% lower than in 2001. The decrease in
pretax pension credits is attributed to lower expected return on assets and the
addition of certain pension plans from the acquisition of the Canadian glass
container assets of Consumers Packaging Inc. A one-half percentage point change
in the actuarial assumption regarding the expected return on assets would result
in a change of approximately $15 million in pretax pension credits. The funded
status of the plans provides assurance of benefits for participating employees,
but future effects on operating results depend on economic conditions and
investment performance.

QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

    Market risks relating to OI Group's operations result primarily from
fluctuations in foreign currency exchange rates, changes in interest rates, and
changes in commodity prices, principally natural gas. OI Group uses certain
derivative instruments to mitigate a portion of the risk associated with
changing foreign currency exchange rates and fluctuating natural gas prices.

    FOREIGN CURRENCY EXCHANGE RATE RISK

    A substantial portion of OI Group's operations consists of manufacturing and
sales activities conducted by affiliates in foreign jurisdictions. The primary
foreign markets served by OI Group's affiliates are in Australia, South America
(principally Colombia, Brazil and Venezuela) and Europe (principally Italy, the
U.K. and Poland). In general, revenues earned and costs incurred by OI Group's
major foreign affiliates are denominated in their respective local currencies.
Consequently, OI Group's reported financial results could be affected by factors
such as changes in foreign currency exchange rates or highly inflationary
economic conditions in the foreign markets in which OI Group's affiliates
operate. When the U.S. dollar strengthens against foreign currencies, the
reported dollar value of local currency EBIT generally decreases; when the U.S.
dollar weakens against foreign currencies, the reported U.S. dollar value of
local currency EBIT generally increases.

    Subject to other business and tax considerations, OI Group's strategy is to
mitigate the economic effects of currency exchange rate fluctuations on that
portion of foreign currency EBIT which is expected to be invested elsewhere or
remitted to the parent company. OI Group's foreign affiliates generally invest
their excess funds in U.S. dollars or dollar-based instruments, where such
instruments are available with acceptable interest rates and terms. In those
countries where the local currency is the designated functional currency,
however, this strategy exposes OI Group to reported losses or gains in the event
the foreign currency strengthens or weakens against the U.S. dollar. OI Group
believes that the benefit of investing excess cash in U.S. dollars or their
equivalent outweighs the risk of reporting losses or gains from currency
exchange rate fluctuations. In those countries with hyper-inflationary
economies, where the U.S. dollar is the designated functional currency, this
investment strategy for excess funds mitigates the risk of reported losses or
gains.

    Because most of OI Group's foreign affiliates operate within their local
economic environment, OI Group believes it is appropriate to finance those
operations with local currency borrowings to the extent practicable.
Considerations which influence the amount of such borrowings include long- and
short-term business plans, tax implications, and the availability of borrowings
with acceptable interest rates and terms. In those countries where the local
currency is the designated functional currency, this strategy mitigates the risk
of reported losses or gains in the event the foreign currency strengthens or
weakens against the U.S. dollar. In those countries where the U.S. dollar is the
designated functional currency, however, local currency borrowings expose OI
Group to reported losses or gains in the event the foreign currency strengthens
or weakens against the U.S. dollar.

                                       52

    OI Group's secured credit agreement provides for U.S. dollar borrowings by
certain foreign affiliates. As of December 31, 2001, amounts outstanding under
the secured credit agreement borrowed by foreign affiliates were:



                                                              MILLIONS OF
AFFILIATE LOCATION                                            U.S. DOLLARS
- ------------------                                            ------------
                                                           
Australia...................................................      $814.0
United Kingdom..............................................       130.0
                                                                  ------
                                                                  $944.0
                                                                  ======


    A significant portion of the above borrowings has been swapped into local
currencies using currency swaps. OI Group accounts for these swaps as fair value
hedges. As such, the changes in the value of the swaps are included in other
expense and are expected to substantially offset any exchange rate gains or
losses on the related U.S. dollar borrowings.

    The remaining portion of OI Group's consolidated debt which was denominated
in foreign currencies was not significant.

    OI Group believes it does not have material foreign currency exchange rate
risk related to local currency denominated financial instruments (I.E., cash,
short-term investments and long-term debt) of its foreign affiliates.

    INTEREST RATE RISK

    OI Group's interest expense is most sensitive to changes in the general
level of U.S. interest rates applicable to its U.S. dollar indebtedness. To
mitigate the impact of fluctuations in variable interest rates, OI Group could,
at its option, convert to fixed interest rates by either refinancing variable
rate debt with fixed rate debt or entering into interest rate swaps.

    The following table provides information about OI Group's significant
interest rate risk at December 31, 2001.



                                                              OUTSTANDING   FAIR VALUE
                                                              -----------   ----------
                                                               (MILLIONS OF DOLLARS)
                                                                      
Variable rate debt:
Secured Credit Agreement, matures March 31, 2004:
  Revolving Loans, interest at a Eurodollar based rate plus
    2.00%...................................................   $2,410.4      $2,410.4
  Term Loan, interest at a Eurodollar based rate plus
    2.50%...................................................   $1,045.0      $1,045.0


    The fair value of the OI Inc. debt being guaranteed by OI Group at
December 31, 2001 was $1,545.1 million.

    COMMODITY RISK

    OI Group is exposed to fluctuation of various commodity prices, most
significantly, the changes in prices related to natural gas. OI Group purchases
a significant amount of natural gas at nationally quoted market prices. OI Group
uses commodity futures contracts related to a portion of its forecasted future
natural gas requirements. The objective of these futures contracts is to limit
the fluctuations in prices paid and the potential volatility in earnings or cash
flows from future price movements. During 2001, OI Group entered into commodity
futures contracts for approximately 75% of its domestic natural gas usage
(approximately 1.2 billion BTUs) through March 2002. OI Group has also entered
into additional contracts during 2002 in order to hedge its natural gas needs
through the end of 2002.

                                       53

                                    BUSINESS

    OI Group is one of the world's leading manufacturers of packaging products.
OI Group is the largest manufacturer of glass containers in North America, South
America, Australia and New Zealand, and one of the largest in Europe. In
addition, OI Group is a leading manufacturer in North America of plastic
containers, plastic closures and plastic prescription containers. OI Group also
has plastics packaging operations in South America, Europe, Australia and New
Zealand. Consistent with its strategy to continue to strengthen its existing
packaging businesses, OI Group has acquired 18 glass container businesses in 18
countries since 1991, including businesses in South America, Central and Eastern
Europe and the Asia Pacific region, and six plastics packaging businesses with
operations in 11 countries.

    OI Group believes it is a technological leader in the worldwide glass
container and plastics packaging segments of the rigid packaging market. During
the five years ended December 31, 2001, OI Group invested more than
$2.3 billion in capital expenditures (excluding acquisitions) and more than
$342.0 million in research, development and engineering to, among other things,
improve labor and machine productivity, increase capacity in growing markets and
commercialize technology into new products.

    OI Group is a holding company with subsidiaries operating in two product
segments:

    - glass containers, manufactured by us; and

    - plastics packaging, manufactured principally by subsidiaries of OI Plastic
      Products FTS Inc.

GLASS CONTAINERS

    We are an indirect, wholly-owned subsidiary of OI Group and a leading
manufacturer of glass containers throughout the world. Approximately one of
every two glass containers made worldwide is made by us, our affiliates or our
licensees. Worldwide glass container sales represented 66% of OI Group's
consolidated net sales for the year ended December 31, 2001 and 67% of those
sales for the year ended December 31, 2000. For the year ended December 31,
2001, we manufactured approximately 41% of all glass containers sold by domestic
producers in the U.S., making us the leading manufacturer of glass containers in
the U.S. We are the leading glass container manufacturer in 17 of the 19
countries where we compete in the glass container segment of the rigid packaging
market and the sole manufacturer of glass containers in eight of these
countries.

    PRODUCTS AND SERVICES

    In the U.S., we produce glass containers for malt beverages including beer
and ready to drink low alcohol refreshers, food, tea, juice, liquor, wine and
pharmaceuticals. We also produce glass containers for soft drinks, principally
outside the U.S. We manufacture these products in a wide range of sizes, shapes
and colors. As a leader in glass container innovation, we are active in new
product development.

    CUSTOMERS

    In most of the countries where we compete, we have the leading position in
the glass container segment of the rigid packaging market (based on units sold).
Our largest customers include many of the leading manufacturers and marketers of
glass packaged products in the world. In the U.S., the majority of our customers
for glass containers are brewers, food producers, distillers and wine vintners.
Outside of the U.S., glass container customers also include soft drink bottlers.
Our largest U.S. glass container customers include (in alphabetical order)
Anheuser-Busch, Cadbury, Coors, Gerber, H.J. Heinz and Miller Brewing. Our
largest international glass container customers include Diageo, Foster's,
Heineken, Labatt, Lion Nathan and Molson. We are the sole glass container
supplier to many of these "blue chip" customers.

                                       54

    We sell most of our glass container products directly to customers under
annual or multi-year supply agreements. We also sell some of our products
through distributors. Glass containers are typically scheduled for production in
response to customers' orders for their quarterly requirements.

    MARKETS AND COMPETITIVE CONDITIONS

    The principal markets for our glass container products are in North America,
South America, Europe and the Asia Pacific region. We believe we are the
low-cost producer in the glass container segment of the North American rigid
packaging market, as well as the low-cost producer in most of the international
glass container segments in which we compete. Much of this cost advantage is due
to the proprietary equipment and process technology we use. Our machine
development activities and systematic upgrading of production equipment in the
1980's and 1990's have given us low-cost leadership in the glass container
segment in many of the countries in which we compete, a key strength to
competing successfully in the rigid packaging market.

    We have the leading share of the glass container segment of the U.S. rigid
packaging market based on units sold by domestic producers in the U.S., with our
sales representing approximately 41% of that segment for the year ended
December 31, 2001. Our principal glass container competitors in the U.S. are
Saint-Gobain Containers Co., a wholly-owned subsidiary of Compagnie de
Saint-Gobain, and Anchor Glass Container Corporation.

    In supplying glass containers outside of the U.S., we compete directly with
Compagnie de Saint-Gobain in Italy and Brazil, Rexam plc and Ardagh plc in the
U.K., Vetropak in the Czech Republic and Amcor Limited in Australia. In other
locations in Europe, we compete indirectly with a variety of glass container
firms including Compagnie de Saint-Gobain, BSN Glasspack, Vetropak and Rexam
plc. Except as mentioned above, we do not compete with any large, multi-national
glass container manufacturers in South America or the Asia Pacific region.

    In addition to competing with other large, well-established manufacturers in
the glass container segment, we compete with manufacturers of other forms of
rigid packaging, principally aluminum cans and plastic containers, on the basis
of quality, price and service. The principal competitors producing metal
containers are Crown Cork & Seal Company, Inc., Rexam plc, Ball Corporation and
Silgan Holdings Inc. The principal competitors producing plastic containers are
Consolidated Container Holdings, LLC, Graham Packaging Company, Plastipak
Packaging, Inc. and Silgan Holdings Inc. We also compete with manufacturers of
non-rigid packaging alternatives, including flexible pouches and aseptic
cartons, in serving the packaging needs of juice customers.

    Our unit shipments of glass containers in countries outside of the U.S. have
grown substantially from levels of the early 1990's. We have added to our
international operations by acquiring glass container companies, many of which
have leading positions in growing or established markets, increasing capacity at
select foreign affiliates, and maintaining the global network of glass container
companies that license our technology. In many developing countries, our
international glass operations have benefited in the last ten years from
increased consumer spending power, a trend toward the privatization of industry,
a favorable climate for foreign investment, lowering of trade barriers and
global expansion programs by multi-national consumer companies. Due to the
weighting of labor as a production cost, glass containers have a significant
cost advantage over plastic and metal containers in developing countries where
labor wage rates are relatively low.

                                       55

    Our majority ownership positions in international glass affiliates are
summarized below:



COMPANY/COUNTRY                                               OWNERSHIP %
- ---------------                                               -----------
                                                           
ACI Operations Pty. Ltd., Australia.........................     100.0
ACI Operations New Zealand Ltd., New Zealand................     100.0
Avirunion, a.s., Czech Republic.............................     100.0
Karhulan Lasi Oy, Finland...................................     100.0
Manufacturera de Vidrios Planos, C.A., Venezuela............     100.0
OI Canada Corp., Canada.....................................     100.0
United Glass Ltd., United Kingdom...........................     100.0
United Hungarian Glass, Hungary.............................     100.0
Vidrieria Rovira S.A., Spain................................     100.0
A/S Jarvakandi Klaas, Estonia...............................      99.9
AVIR S.p.A., Italy..........................................      99.7
Huta Szkla Jaroslaw S.A., Poland............................      99.4
Huta Szkla Antoninek Sp.zo.o, Poland........................      98.7
Vidrios Industriales S.A., Peru.............................      96.0
PT Kangar Consolidated Industries, Indonesia................      93.9
Companhia Industrial Sao Paulo e Rio, Brazil................      79.4
Owens-Illinois de Venezuela, C.A., Venezuela................      74.0
ACI Guangdong Glass Company Ltd., China.....................      70.0
ACI Shanghai Glass Company Ltd., China......................      70.0
Wuhan Owens Glass Container Company Ltd., China.............      70.0
Cristaleria del Ecuador S.A., Ecuador.......................      69.0
Cristaleria Peldar S.A., Colombia...........................      58.4


    NORTH AMERICA.  In addition to our glass container operations in the U.S.,
our affiliate in Canada is the sole manufacturer of glass containers in that
country.

    SOUTH AMERICA.  Our affiliates in Colombia, Ecuador and Peru are the sole
manufacturers of glass containers in those countries. In both Brazil and
Venezuela, we are the leading manufacturer of glass containers. In South
America, there is a large infrastructure for returnable/refillable glass
containers. However, with improving economic conditions in South America after
the recessions of the late 1990's, our unit sales of non-returnable glass
containers have grown in Venezuela, Colombia and Brazil.

    EUROPE.  Our European glass container business has operations in eight
countries and is one of the largest in Europe. In Italy, our wholly-owned
affiliate, AVIR, is the leading manufacturer of glass containers and operates 13
glass container plants. AVIR accounted for approximately 49% of our total
European glass container sales in 2001. United Glass, our affiliate in the U.K.,
is a leading manufacturer of glass containers for the U.K. spirits business. In
Poland, we are the leading glass container manufacturer and currently operate
two plants. Our affiliate in the Czech Republic, Avirunion, is the leading glass
container manufacturer in that country and also ships a portion of its beer
bottle production to Germany. In Hungary, we are the sole glass container
manufacturer and serve the Hungarian food industry. In Finland and the Baltic
country of Estonia, we are the only manufacturer of glass containers. We
coordinate our production activities between Finland and Estonia in order to
efficiently serve the Finnish, Baltic and Russian markets. In recent years,
Western European brewers have been establishing beer production facilities in
Central Europe and the Russian Republic. Because these new beer plants use
high-speed filling lines, they require high quality glass containers in order to
operate properly. We believe we are well-positioned to meet this growing demand.
In Spain, we serve the market for wine bottles in the Barcelona area.

    ASIA PACIFIC.  We have glass operations in four countries in the Asia
Pacific region: Australia, New Zealand, Indonesia and China. Our Asia Pacific
affiliates are the leading manufacturers of glass

                                       56

containers in most of the countries in which they compete. In Australia, we
operate five glass container plants, including a plant focused on serving the
needs of the rapidly growing Australian wine industry. In New Zealand, we are
the sole glass container manufacturer. In Indonesia, our affiliate supplies the
Indonesian market and exports glass containers for food and pharmaceutical
products to Australian customers. In China, the glass container segments of the
packaging market are regional and highly fragmented with a number of local
competitors. We have three modern glass container plants in China manufacturing
high-quality beer bottles to serve Foster's as well as Anheuser-Busch, which is
now producing Budweiser-Registered Trademark- in and for the Chinese market.

    We continue to focus on serving the needs of leading multi-national consumer
companies as they pursue international growth opportunities. We believe that we
and our affiliates are often the glass container partner of choice for such
multi-national consumer companies due to our leadership in glass technology and
our status as a low-cost producer in most of the markets we serve.

    MANUFACTURING

    We believe we are the low-cost producer in the glass container segment of
the North American rigid packaging market, as well as the low-cost producer in
most of the international glass segments in which we compete. Much of this cost
advantage is due to the proprietary equipment and process technology we use. We
believe our glass forming machines, developed and refined by our engineering
group, are significantly more efficient and productive than those used by our
competitors. Our machine development activities and systematic upgrading of
production equipment in the 1980's and 1990's have given us low-cost leadership
in the glass container segment in most of the countries in which we compete, a
key strength to competing successfully in the rigid packaging market.

    Over the last ten years, we have more than doubled our overall glass
container labor and machine productivity in the U.S., as measured by output
produced per man-hour. By applying our technology and worldwide "best
practices," during this period we decreased the number of production employees
required per glass-forming machine line in the U.S. by over 35%, and we
increased the daily output of our glass-forming machines by approximately 40%.

    METHODS OF DISTRIBUTION

    Due to the significance of transportation costs and the importance of timely
delivery, glass container manufacturing facilities are generally located close
to customers. In the U.S., most of our glass container products are shipped by
common carrier to customers within a 250-mile radius of a given production site.
In addition, our glass container operations outside the U.S. export some
products to customers beyond their national boundaries, which may include
transportation by rail and ocean delivery in combination with common carriers.
We also operate several machine and mold shops that manufacture
high-productivity glass-forming machines, molds and related equipment.

    SUPPLIERS AND RAW MATERIALS

    The primary raw materials used in our glass container operations are sand,
soda ash and limestone. Each of these materials, as well as the other raw
materials we use to manufacture glass containers, have historically been
available in adequate supply from multiple sources. For certain raw materials,
however, there may be temporary shortages due to weather or other factors,
including disruptions in supply caused by raw material transportation or
production delays.

    GLASS RECYCLING

    We are an important contributor to the recycling effort in the U.S. and
continue to melt substantial recycled glass tonnage in our glass furnaces. If
sufficient high-quality recycled glass were available on a consistent basis, we
have the technology to operate using 100% recycled glass. Using recycled glass
in our manufacturing process reduces energy costs and prolongs the operating
life of our glass melting furnaces.

                                       57

    FACILITIES

    We have glass container operations located in 19 countries. The following
table lists the locations of our glass container plants and related facilities:



NORTH AMERICA                      EUROPE                 ASIA PACIFIC             SOUTH AMERICA
- -------------             ------------------------  ------------------------  ------------------------
                                                                     
CALIFORNIA                CZECH REPUBLIC            AUSTRALIA                 BRAZIL
  Hayward                 Sokolov                   Adelaide                  Descalvado (#)
  Los Angeles             Teplice                   Brisbane                  Manaus (+)
  Oakland                 ESTONIA                   Melbourne                 Rio de Janeiro
  Tracy                   Jarvakandi                Melbourne (Section)       Sao Paulo
COLORADO                  FINLAND                   Perth                     COLOMBIA
  Wheat Ridge (*)         Karhula                   Sydney                    Buga
GEORGIA                   HUNGARY                   CHINA                     Cali (+)
  Atlanta                 Oroshaza                  Guangzhou                 Envigado
ILLINOIS                  ITALY                     Shanghai                  Soacha
  Godfrey (+)             Asti                      Tianjin (Section)         Zipaquira
  Streator                Bari                      Wuhan                     Zipaquira (#)
INDIANA                   Bologna                   INDONESIA                 ECUADOR
  Lapel                   Milan (2 plants)          Jakarta                   Guayaquil
MICHIGAN                  Napoli                    NEW ZEALAND               PERU
  Charlotte               Napoli (Section)          Auckland                  Callao
NEW YORK                  Pordenone                                           VENEZUELA
  Auburn                  Rome                                                La Victoria
NORTH CAROLINA            Termi                                               Valencia
  Winston-Salem           Trento (2 plants)                                   Valera
OHIO                      Treviso
  Zanesville              POLAND
OKLAHOMA                  Antoninek
  Muskogee                Jaroslaw
OREGON                    SPAIN
  Portland                Barcelona
PENNSYLVANIA              UNITED KINGDOM
  Brockway (+)            Alloa
  Clarion                 Birmingham (+)
  Crenshaw                Devilla (#)
TEXAS                     Harlow
  Waco
VIRGINIA
  Danville
  Toano
PUERTO RICO
  Vega Alta
CANADA
  British Columbia
  New Brunswick
  Ontario (3 plants)
  Quebec


- --------------------------

(*) A 50-50 joint venture with Coors Brewing Company

(+) Machine manufacturing

(#) Silica sand plant

(Section) Mold shop

                                       58

PLASTICS PACKAGING

    OI Group is a leading manufacturer in North America of plastic containers,
plastic closures and plastic prescription containers. OI Group also has plastics
packaging operations in South America, Europe, Australia and New Zealand.
Plastics packaging sales represented 34% of OI Group's consolidated net sales
for the year ended December 31, 2001 and 32% of those sales for the year ended
December 31, 2000.

    MANUFACTURING AND PRODUCTS

    The plastics packaging business utilizes two basic manufacturing processes:

    - Blow-Molded Plastics Packaging

    Blow-molding is a plastics manufacturing process where pre-heated plastic is
captured inside a hollow mold and using pressurized air is blown, much like a
balloon, into a container. After being cooled, the mold is opened and the
plastic product is removed.

    In blow-molded plastics packaging, OI Group is a leading U.S. manufacturer
of high density polyethylene (HDPE) containers. OI Group manufactures these
containers for products for the food and beverage, household, personal care,
health care and chemical and automotive fluid end-use categories.

    OI Group is also a leading worldwide manufacturer of PET blow-molded
containers. Many of these PET containers are manufactured using multiple layers
of plastic, with each layer having a different function. Some of these plastic
layers have "barrier" properties, effectively blocking the escape of carbon
dioxide out of, and the permeation of oxygen into, the packaged product thereby
maintaining product quality and extending shelf life. Examples of products
packaged in multi-layer PET containers include Heinz ketchup and
Gatorade-Registered Trademark- sports drink. Major brewers, such as
Anheuser-Busch, Coors and Miller Brewing, are now marketing beer packaged in OI
Group's multi-layer PET beer bottles.

    - Injection-Molded Plastics Packaging

    Injection molding is a plastics manufacturing process where plastic resin in
the form of pellets or powder is melted and then injected or otherwise forced
under pressure into a mold. The mold is then cooled and the product is removed
from the mold.

    OI Group develops and produces injection-molded plastic closures and closure
systems, which typically incorporate functional features such as tamper evidence
and child resistance or dispensing. Other products include trigger sprayers for
household cleaning products, finger and lotion pumps for fragrances and
cosmetics, as well as injection-molded containers for deodorant and toothpaste.

    The prescription product unit manufactures injection-molded plastic
prescription containers. These products are sold primarily to drug wholesalers,
major drug chains and mail order pharmacies. Containers for prescriptions
include ovals, vials, ointment jars, dropper bottles and automation friendly
prescription containers.

    CUSTOMERS

    OI Group's largest customers (in alphabetical order) for plastic containers
and closures include Bristol-Myers Squibb, H.J. Heinz, Johnson & Johnson,
PepsiCo (Dole-Registered Trademark-, Gatorade-Registered Trademark-,
Tropicana-Registered Trademark-), Procter & Gamble and Unilever. The largest
customers for prescription containers include AmeriSourceBergen, Cardinal
Health, Eckerd Drug, McKesson, Merck-Medco, Rite-Aid and Walgreen.

    OI Group sells most plastic containers, plastic closures and plastic
prescription containers directly to customers under annual or multi-year supply
agreements. These supply agreements typically allow a pass-through of resin
price increases and decreases, except for the prescription business. OI Group
also sells some of its products through distributors.

                                       59

    MARKETS AND COMPETITIVE CONDITIONS

    Major markets for plastics packaging include the food and beverage,
household products, personal care products, health care products and chemical
and automotive fluid industries.

    The plastics segment of the rigid packaging market is competitive and
fragmented due to generally available technology, low costs of entry and
customer emphasis on low package cost. A large number of competitors exist on
both a national and regional basis. OI Group competes with other manufacturers
in the plastic containers segment on the basis of quality, price, service and
product design. The principal competitors producing plastic containers are
Consolidated Container Holdings, LLC, Graham Packaging Company, Plastipak
Packaging, Inc. and Silgan Holdings Inc. OI Group emphasizes total package
supply (I.E., bottle and closure system), diversified market positions,
proprietary technology and products, new package development and packaging
innovation. The plastic closures segment is divided into various categories in
which several suppliers compete for business on the basis of quality, price,
service and product design.

    OI Group's approach has been to identify and serve areas of the plastics
packaging segment where customers seek distinctive and functional packaging to
differentiate their products among an array of choices offered to consumers. OI
Group believes it is a leader in technology and development of custom products
and has a leading market position in the U.S. for such products. OI Group
believes its plastic containers and plastic closures businesses have a
competitive advantage as a result of one of the shortest new product development
cycles in the industry, enabling it to respond quickly to customer needs in the
rapidly changing custom plastic containers and closures segments. OI Group's
product innovations in plastics packaging include in-mold labeling for
custom-molded bottles and multi-layer bottles containing post-consumer recycled
(PCR) plastic.

    MANUFACTURING

    The exact type of blow-molding manufacturing process OI Group uses is
dependent on the plastic product type and package requirements. These
blow-molding processes include: various types of extrusion blow-molding for
medium- and large-sized HDPE, low density polyethelene (LDPE), polypropylene and
polyvinyl chloride (PVC) containers; stretch blow-molding for medium-sized PET
containers; injection blow-molding for small health care and personal care
containers in various materials; two-stage PET blow-molding for high volume,
high performance mono-layer, multi-layer and heat-set PET containers; and
proprietary blow-molding for drain-back systems and other specialized
applications.

    Injection-molding is used in the manufacture of plastic closures, trigger
sprayers, deodorant canisters, ink cartridges and vials. Compression-molding, an
advanced type of injection-molding, is used for high volume carbonated soft
drink and other beverage closures that require tamper evidence.

    METHODS OF DISTRIBUTION

    In the U.S., most of OI Group's plastic containers, plastic closures and
plastic prescription containers are shipped by common carrier. In addition, OI
Group's plastics packaging operations outside the U.S. export some products to
customers beyond their national boundaries, which may include transportation by
rail and ocean delivery in combination with common carriers.

    SUPPLIERS AND RAW MATERIALS

    OI Group manufactures containers and closures using HDPE, LDPE,
polypropylene, PVC, PET and various other plastic resins. OI Group also
purchases large quantities of master batch colorants, corrugated materials and
labels. In general, these raw materials are available in adequate supply from

                                       60

multiple sources. However, for certain raw materials, there may be temporary
shortages due to market conditions and other factors.

    RECYCLING

    Recycling content legislation, which has been enacted in several states,
requires that a certain specified minimum percentage of recycled plastic be
included in certain new plastic containers. OI Group has met such legislated
standards in part due to its material and multi-layer process technology. OI
Group's plastic containers are made with PCR plastic constituting somewhere
between 25% and 100% of the material used to produce the container. In addition,
its plastics plants also recycle virtually all of the internal scrap generated
in the production process.

    FACILITIES

    OI Group has 38 plastics manufacturing plants in the U.S. and Puerto Rico,
as well as plastics packaging operations located in nine countries outside of
the U.S. The following table lists the locations of the plastics packaging
plants:



              NORTH AMERICA                      EUROPE             ASIA PACIFIC         SOUTH AMERICA
- -----------------------------------------  ------------------  ----------------------  ------------------
                                                                           
ARIZONA                NEVADA              FINLAND             AUSTRALIA               BRAZIL
  Tolleson               Henderson           Ryttyla             Adelaide                Sorocaba
CALIFORNIA             NEW HAMPSHIRE       HUNGARY               Berri                   Valencia
  LaMirada               Bedford             Gyor                Brisbane (3 plants)
  Modesto                Nashua              Netherlands         Drouin
CONNECTICUT            NEW JERSEY            Etten-Leur          Melbourne (5 plants)
  Bridgeport             Belvidere         UNITED KINGDOM        Perth (2 plants)
FLORIDA                  Edison              Chalgrove           Sydney (2 plants)
  Kissimmee              Washington                              Wadonga
GEORGIA                NORTH CAROLINA                          NEW ZEALAND
  Cartersville           Hamlet                                  Auckland
  Rossville              Rocky Mount                             Christchurch
ILLINOIS               OHIO
  Chicago                Berlin
  Vandalia               Bowling Green
INDIANA                  Cincinnati
  Franklin               Findlay
  Sullivan               Fremont
KENTUCKY               PENNSYLVANIA
  Florence               Brookville
  (2 plants)             Erie
MARYLAND                 Hazleton
  Baltimore            SOUTH CAROLINA
MICHIGAN                 Greenville
  Constantine          TEXAS
MISSOURI                 El Paso
  Kansas City            Rockwall
  St. Louis            VIRGINIA
                         Harrisonburg
                       PUERTO RICO
                         Las Piedras
                       MEXICO
                         Mexico City
                         Pachuca


                                       61

    In addition, three plastics packaging plants are under construction: (1) a
compression molding facility in Hattiesburg, Mississippi for beverage and juice
closures; (2) a facility for the manufacture and assembly of plastic ink
cartridges in Singapore; and (3) a plastic container facility in Iowa City,
Iowa.

TECHNICAL ASSISTANCE LICENSE AGREEMENTS

    We license our proprietary glass container technology to 24 companies in 24
countries. In plastics packaging, OI Group has technical assistance agreements
with 24 companies in 14 countries. These agreements cover areas ranging from
manufacturing and engineering assistance, to support in functions such as
marketing, sales and administration. The worldwide licensee network provides a
stream of revenue to support OI Group's development activities and gives it the
opportunity to participate in the rigid packaging market in countries where it
does not already have a direct presence. In addition, OI Group's technical
agreements enable it to apply "best practices" developed by its worldwide
licensee network. For the years ended December 31, 2001 and 2000, OI Group
earned $24.6 million and $25.3 million, respectively, in royalties and net
technical assistance revenue.

RESEARCH AND DEVELOPMENT

    Research and development constitutes an important part of OI Group's
activities. Research and development expenditures were $41.2 million,
$46.7 million and $37.5 million for 2001, 2000 and 1999, respectively. In
addition, engineering expenditures were $31.4 million, $31.3 million and
$42.2 million for 2001, 2000 and 1999, respectively. OI Group's research,
development and engineering activities include new products, manufacturing
process control, automatic inspection and further automation.

ENVIRONMENTAL AND OTHER GOVERNMENTAL REGULATION

    OI Group's worldwide operations, in common with those of the industry
generally, are subject to extensive laws, ordinances, regulations and other
legal requirements relating to environmental protection, including legal
requirements governing investigation and clean-up of contaminated properties as
well as water discharges, air emissions, waste management and workplace health
and safety. Capital expenditures for property, plant and equipment for
environmental control activities were not material during 2001.

    A number of governmental authorities, both in the U.S. and abroad, have
enacted, or are considering, legal requirements that would mandate certain rates
of recycling, the use of recycled materials and/or limitations on certain kinds
of packaging materials such as plastics. OI Group believes that governmental
authorities in both the U.S. and abroad will continue to enact and develop such
legal requirements.

    In the U.S., sales of non-refillable glass beverage bottles and other
convenience packages are affected by mandatory deposit laws and other types of
restrictive legislation. As of January 1, 2002, there were nine states with
mandatory deposit laws in effect. A number of states and local governments have
enacted or are considering legislation to promote curbside recycling and
recycled content legislation as alternatives to mandatory deposit laws. Although
such legislation is not uniformly developed, OI Group believes that states and
local governments will continue to enact and develop curbside recycling and
recycling content legislation.

    Plastic containers have also been the subject of legislation in various
states, which requires that a certain specified minimum percentage of recycled
plastic be included in new plastic products. OI Group utilizes recycled plastic
resin in its manufacturing processes.

    Although OI Group is unable to predict what environmental legal requirements
may be adopted in the future, it has not made, and does not anticipate making,
material expenditures with respect to

                                       62

environmental protection. However, the compliance costs associated with
environmental legal requirements may result in future additional costs to
operations.

INTELLECTUAL PROPERTY RIGHTS

    OI Group has a large number of patents which relate to a wide variety of
products and processes, has a substantial number of patent applications pending,
and is licensed under several patents of others. While in the aggregate OI
Group's patents are of material importance to its businesses, OI Group does not
consider that any patent or group of patents relating to a particular product or
process is of material importance when judged from the standpoint of any segment
or its businesses as a whole.

SEASONALITY

    Sales of particular glass container and plastics packaging products such as
beer and food containers are seasonal. Shipments in the U.S. and Europe are
typically greater in the second and third quarters of the year, while shipments
in South America and the Asia Pacific region are typically greater in the first
and fourth quarters of the year.

EMPLOYEES

    OI Group employed approximately 29,700 persons at December 31, 2001. A
majority of OI Group's hourly workers are covered by collective bargaining
agreements. The principal collective bargaining agreement, which at
December 31, 2001, covered approximately 90% of OI Group's union affiliated
employees in the U.S., was extended and ratified in March 2002 and will expire
on April 1, 2005. OI Group considers its employee relations to be good.

LEGAL PROCEEDINGS

    Certain litigation is pending against OI Group, in many cases involving
ordinary and routine claims incidental to the business of OI Group and in others
presenting allegations that are nonroutine and involve compensatory, punitive or
treble damage claims as well as other types of relief. The ultimate legal and
financial liability of OI Group in respect to this pending litigation cannot be
estimated with certainty. However, OI Group believes, based on its examination
and review of such matters and experience to date, that such ultimate liability
will not have a material adverse effect on its results of operations or
financial condition. For a discussion of certain litigation pending against
OI Inc., see "Risk Factors--Risks Relating to the Notes--Cash Used to Satisfy
Other Obligations--A portion of our cash flow will be used to make payments to
OI Inc. to satisfy certain debt, preferred stock and litigation-related
obligations, including settlement of asbestos-related claims."

                                       63

                      DESCRIPTION OF CERTAIN INDEBTEDNESS

THE SECURED CREDIT AGREEMENT

    As of December 31, 2001, the secured credit agreement consisted of an
aggregate of $4.05 billion in financing under (1) a $1.05 billion term loan (the
"Term Facility") extended to Owens-Brockway Glass Container Inc. and (2) a
$3.0 billion revolving loan facility (including the subfacilities described
below, the "Revolving Facility") available to OI Plastic Products FTS Inc. and
Owens-Brockway Glass Container Inc. (collectively, with OI General FTS Inc., the
"Domestic Borrowers"). In January 2002, the term loan balance was reduced by
$980.0 million by the application of the net proceeds of the senior secured
notes. OI General FTS Inc. has repaid in full its term loan under the secured
credit agreement but remains jointly and severally liable for the Owens-Brockway
Glass Container Inc. term loan and all revolving loans. Each Domestic Borrower
is jointly and severally liable for loans made to any borrower under the
Revolving Facility. The Revolving Facility also includes:

    - a $300.0 million subfacility (the "U.K. Subfacility") available to certain
      of OI Group's U.K. subsidiaries (the "U.K. Borrowers");

    - a $1.1 billion subfacility (the "Australian Subfacility") available to
      certain of OI Group's Australian subsidiaries (the "Australian
      Borrowers"); and

    - a $10.0 million subfacility (the "Italian Subfacility") available to
      certain of OI Group's Italian subsidiaries (the "Italian Borrowers").

Each U.K. Borrower is jointly and severally liable for the obligations of each
other U.K. Borrower. Each Australian Borrower is jointly and severally liable
for the obligations of each other Australian Borrower. Each Italian Borrower is
jointly and severally liable for the obligations of each other Italian Borrower.
In addition, the Revolving Facility includes a $500.0 million letter of credit
subfacility available to the Domestic Borrowers, the U.K. Borrowers and the
Australian Borrowers and certain overdraft facilities.

    The Term Facility and the Revolving Facility expire on March 31, 2004. As of
December 31, 2001, loans of $1.05 billion were outstanding under the Term
Facility, loans of $2.41 billion were outstanding under the Revolving Facility
and $98.2 million of issued but undrawn letters of credit was outstanding. In
January 2002, the term loan balance was reduced by $980.0 million by the
application of the net proceeds of the senior secured notes.

    Loans under the Term Facility bear interest, generally at our option, at
(i) the higher of (A) the prime rate or (B) 50 basis points over an averaged
federal funds rate, PLUS in either case 150 basis points per annum or (ii) a
reserve-adjusted Eurodollar rate PLUS 250 basis points per annum.

    Loans under the Revolving Facility bear interest, generally at the
applicable borrower's option, at:

    - the higher of (A) the prime rate or (B) 50 basis points over an averaged
      federal funds rate, PLUS in either case 75 basis points, if the applicable
      leverage ratio then in effect under the secured credit agreement is less
      than 3.5:1, or 100 basis points, if the applicable leverage ratio is
      greater than or equal to 3.5:1; or

    - a reserve adjusted Eurodollar rate PLUS 175 basis points, if the
      applicable leverage ratio then in effect under the secured credit
      agreement is less than 3.5:1, or 200 basis points, if the applicable
      leverage ratio is greater than or equal to 3.5:1.

    In the event the loans under the Term Facility have not been repaid in full
on or prior to March 31, 2003, the interest rate margins on loans under the Term
Facility and the Revolving Facility increase by 50 basis points until repayment
in full of the term loans under the secured credit agreement.

                                       64

    Each Domestic Borrower has guaranteed the obligations of each borrower under
the secured credit agreement (including the offshore subfacilities). In
addition, the secured credit agreement (including the offshore subfacilities) is
guaranteed by OI Group and substantially all other direct and indirect domestic
subsidiaries of OI Group. The U.K. Borrowers have guaranteed the obligations of
the Australian Borrowers and the Italian Borrowers under the secured credit
agreement. In addition, certain wholly-owned U.K. subsidiaries of the U.K.
Borrowers (the "U.K. Guarantors") have guaranteed the obligations of the U.K.
Borrowers under the U.K. Subfacility; and certain wholly-owned Australian
subsidiaries of the Australian Borrowers (the "Australian Guarantors") have
guaranteed the obligations of the Australian Borrowers under the Australian
Subfacility.

    The secured credit agreement and the domestic guaranties of the secured
credit agreement, subject to certain exceptions and limitations, are secured on
a first priority basis by substantially all of the assets of OI Group and
substantially all of the assets of substantially all present and future direct
and indirect domestic subsidiaries of OI Group, including the stock and
intercompany debt of such subsidiaries. In addition, the U.K. Subfacility and
the guaranties of the U.K. Borrowers and U.K. Guarantors are secured by
substantially all of the assets of the U.K. Borrowers and U.K. Guarantors, and
the Australian Subfacility and the guaranties of the Australian Borrowers and
the Australian Guarantors are secured by substantially all of the assets of the
Australian Borrowers and the Australian Guarantors. Real property with an
acquisition cost or insurable value of less than $25.0 million has generally
been excluded. The secured credit agreement also requires under certain
circumstances certain additional existing and future subsidiaries to guaranty
the secured credit agreement and grant security interests in their assets to
secure the secured credit agreement. The secured credit agreement and related
collateral documents provide that, subject to certain conditions, the domestic
guaranties and liens supporting the secured credit agreement may be shared from
time to time with specified types of other obligations owing to lenders or
affiliates of lenders party to the secured credit agreement incurred or
guaranteed by OI Group or its subsidiaries as lending facilities and interest
rate and currency agreements and certain other indebtedness permitted by the
secured credit agreement, including the notes. In the event the rating for
OI Inc.'s and OI Group's long term unsecured debt from Standard & Poor's Ratings
Services and Moody's Investors Service, Inc. is BBB- and Baa3 or higher,
respectively, and acknowledged by the collateral agent, the security interests
in the collateral securing the secured credit agreement will terminate, provided
that no default exists and all of OI Inc.'s outstanding public debt securities,
the notes and other institutional debt shall be and remain unsecured. The
Domestic Borrowers may assign or transfer their rights and obligations under the
secured credit agreement to OI Inc. and all of OI Inc.'s subsidiaries will be
concurrently released from their guarantees upon the consent of the requisite
percentage of lenders under the secured credit agreement if all loans under the
Term Facility have been repaid, OI Inc. has achieved, and immediately following
such assumption maintains, specified investment grade ratings and all
obligations of subsidiaries of OI Inc. in respect of OI Inc.'s outstanding
public debt securities, the notes and certain other debt have been released and
assumed by OI Inc.

    Loans and commitments under the secured credit agreement are subject to
mandatory prepayment and reduction under certain circumstances from proceeds of
permitted asset sales (including sales of receivables), the sale or issuance of
permitted debt securities, the sale or issuance of certain equity securities,
and from insurance and condemnation proceeds, in each case received by OI Group
and/or OI Group's subsidiaries (with certain exceptions for non-U.S.
subsidiaries), and in some cases by OI Inc. Voluntary prepayment of any of the
loans under the secured credit agreement is permitted in whole or in part with
prior notice and without premium or penalty (other than funding losses), subject
to limitations as to minimum amounts.

    The secured credit agreement contains covenants and provisions that, among
other things, restrict the ability of OI Group and its subsidiaries to dispose
of assets, incur additional indebtedness, prepay other indebtedness or amend
certain debt instruments, pay dividends, create liens on assets, enter into

                                       65

contingent obligations, enter into sale and leaseback transactions, make
investments, loans or advances, make acquisitions, engage in mergers or
consolidations, change the business conducted by OI Group and its subsidiaries,
engage in certain transactions with affiliates and otherwise restrict certain
corporate activities.

    In addition, the secured credit agreement contains financial covenants that
require OI Group and its subsidiaries to maintain, based upon the financial
statements of OI Inc. and its subsidiaries on a consolidated basis, specified
financial ratios and tests, including minimum fixed charge coverage ratios,
maximum leverage ratios, minimum net worth and specified capital expenditure
tests.

    Events of default under the secured credit agreement include, among other
matters: (1) any failure to pay principal when due or to reimburse letters of
credit when reimbursement is due, or to pay interest, fees or other amounts
within five days after the date due; (2) any failure by OI Inc. or any of its
subsidiaries to pay when due principal or interest on certain indebtedness that
gives rise to a right of acceleration, and other breaches or defaults by
OI Inc. or its subsidiaries under such indebtedness similarly giving rise to
acceleration rights; (3) the breach by OI Group or certain of its subsidiaries
of certain covenants, representations or warranties in the secured credit
agreement; (4) any other default by OI Group or certain subsidiaries under the
secured credit agreement that has not been remedied or waived within 30 days of
the requisite notice; (5) certain events of bankruptcy, insolvency or
dissolution of OI Inc., OI Group, any borrower or any material subsidiary, and
certain material judgments entered against the same; (6) a change of control of
OI Inc., OI Group or the Company as defined in the secured credit agreement;
(7) certain ERISA and pension-related matters and liabilities; (8) material
impairment of the guarantees or the collateral security; and (9) certain changes
in the activities of OI Inc.

INDEBTEDNESS OF OI INC.

    OI Inc. has issued the following outstanding public debt securities:

       $300 million of 7.85% Senior Notes due 2004
       $350 million of 7.15% Senior Notes due 2005
       $300 million of 8.10% Senior Notes due 2007
       $250 million of 7.35% Senior Notes due 2008
       $250 million of 7.50% Senior Debentures due 2010
       $250 million of 7.80% Senior Debentures due 2018

    OI Inc.'s obligations under these outstanding public debt securities are
guaranteed on a subordinated basis by OI Group and OI Packaging. The guarantees
and the outstanding public debt securities are secured by a second priority lien
on the intercompany debt and capital stock owned by OI Group and OI Packaging.

    The guarantees by OI Group and OI Packaging are subordinated to the prior
payment in full in cash of all obligations of these guarantors under the secured
credit agreement, obligations owing to lenders or their affiliates as lending
facilities as permitted by the terms of the secured credit agreement and
obligations under interest rate and currency agreements with lenders or their
affiliates as permitted by the terms of the secured credit agreement. The
guarantees will also be subordinated to the guarantees by OI Group and OI
Packaging of our obligations under the notes. Each of OI Group and OI Packaging
will be released and relieved of any obligations under its guarantee of
OI Inc.'s outstanding public debt securities (1) in the event of a sale or other
disposition of all or substantially all of the assets of such guarantor, by way
of merger, consolidation or otherwise, or a sale or other disposition of all of
its capital stock, to a person that is not a subsidiary of OI Inc., or (2) at
the discretion of OI Inc., in the event that the guarantor is no longer a
guarantor of: (A) the obligations under the secured credit agreement;
(B) obligations under certain interest rate and currency agreements with lenders
or their affiliates as permitted by the terms of the secured credit agreement;

                                       66

and (C) obligations owing to lenders or their affiliates as lending facilities
as permitted by the terms of the secured credit agreement.

    The security interests are second in priority to the liens granted to the
senior secured parties under the pledge agreement, which currently consist of
the collateral agent for the benefit of the lenders under the secured credit
agreement, lenders or their affiliates party to certain interest rate and
currency agreements as permitted by the terms of the secured credit agreement
and lenders and their affiliates under lending facilities as permitted by the
terms of the secured credit agreement, and which will include the holders of the
notes. The security interests securing OI Inc.'s outstanding public debt
securities will terminate and the collateral will be released upon the earlier
of:

    - payment in full of all obligations under the secured credit agreement and
      the cancellation or termination of the secured credit agreement and
      related letters of credit and the written election of OI Group and OI
      Packaging;

    - the first date on which the pledged collateral no longer secures any
      obligations under the secured credit agreement and upon the written
      election of OI Group and OI Packaging; and

    - the achievement of "investment grade" debt ratings for OI Inc.'s and OI
      Group's long term unsecured debt (in the case of Moody's Investors
      Service, Inc., a rating of Baa3 or higher, and, in the case of Standard &
      Poor's Ratings Services, a rating of BBB- or higher).

    In addition, lenders under the secured credit agreement have the ability to
direct the collateral agent to release the collateral upon the approval of the
requisite percentage of lenders under the secured credit agreement.

                                       67

                              DESCRIPTION OF NOTES

    You can find the definitions of certain terms used in this description under
the subheading "--Certain Definitions." In this description, the word "Company"
refers only to Owens-Brockway Glass Container Inc. and not to any of its
Subsidiaries, the term "OI Packaging" refers to Owens-Brockway Packaging, Inc.,
the Company's direct parent, and not to any of its Subsidiaries and the term "OI
Group" refers to Owens-Illinois Group, Inc., the Company's indirect parent, and
not to any of its Subsidiaries. OI Group and certain of the Subsidiaries of OI
Group guarantee the notes and therefore are subject to many of the provisions
contained in this Description of Notes.

    The Company issued the private notes, and will issue the exchange notes
under an Indenture (the "Indenture") among itself, the Guarantors and U.S. Bank
National Association, as trustee (the "Trustee"). The terms of the notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").

    The following description is a summary of the material provisions of the
Indenture and the Collateral Documents (as defined below). It does not restate
those agreements in their entirety. We urge you to read the Indenture and the
Collateral Documents because they, and not this description, define your rights
as Holders of the notes. Certain defined terms used in this description but not
defined below under "--Certain Definitions" have the meanings assigned to them
in the Indenture.

BRIEF DESCRIPTION OF THE NOTES AND THE GUARANTEES

    THE NOTES

    The notes:

    - are senior obligations of the Company secured on the basis described
      below;

    - are PARI PASSU in right of payment with existing, and any future, senior
      Indebtedness of the Company; and

    - are guaranteed on a senior basis by the Guarantors.

    THE GUARANTEES

    The notes are guaranteed by OI Group and all Domestic Subsidiaries of OI
Group that guarantee the Credit Agreement and will be guaranteed by any future
Domestic Subsidiaries of OI Group that guarantee the Credit Agreement. As of the
date of the Indenture, all of OI Group's Subsidiaries, other than its Foreign
Subsidiaries, were "Domestic Subsidiaries." In the future, OI Group may have
additional Subsidiaries which are not Domestic Subsidiaries and may also have
additional Domestic Subsidiaries which do not guarantee the notes.

    Each Guarantee of the notes:

    - is a senior obligation of the Guarantor secured on the basis described
      below; and

    - is PARI PASSU in right of payment with existing, and any future, senior
      Indebtedness of the Guarantor.

    As of the date of the Indenture, all of OI Group's Subsidiaries were
"Restricted Subsidiaries." However, under the circumstances described below
under the subheading "--Certain Covenants--Designation of Restricted and
Unrestricted Subsidiaries," OI Group will be permitted to designate certain of
its subsidiaries as "Unrestricted Subsidiaries." The Unrestricted Subsidiaries
will not be subject to any of the restrictive covenants in the Indenture and
will not guarantee the notes.

                                       68

PRINCIPAL, MATURITY AND INTEREST

    The Indenture does not limit the maximum aggregate principal amount of notes
that the Company may issue thereunder. The Company will issue an aggregate
principal amount of $1.0 billion of notes in this offering. The Company may
issue additional notes (the "additional notes") from time to time after this
offering. The notes and any additional notes subsequently issued under the
Indenture would be treated as a single series for all purposes under the
Indenture, including, without limitation, waivers, amendments, redemptions and
offers to purchase.

    In addition to the notes and any additional notes, the Company may issue
additional series of debt securities under the Indenture. The terms of any
additional debt securities issued under the Indenture will be established
pursuant to a resolution of the Board of Directors of the Company and set forth
or determined in the manner provided in an officer's certificate or by a
supplemental indenture. Any offering of additional notes or additional debt
securities under the Indenture is subject to the covenant described below under
the caption "--Certain Covenants--Incurrence of Indebtedness and Issuance of
Preferred Stock."

    The Company will issue notes in denominations of $1,000 and integral
multiples of $1,000. The notes will mature on February 15, 2009.

    Interest on the notes will accrue at the rate of 8 7/8% per annum and will
be payable semi-annually in arrears on February 15 and August 15, commencing on
August 15, 2002. The Company will make each interest payment to the Holders of
record on the immediately preceding February 1, and August 1.

    Interest on the exchange notes will accrue from the last interest payment
date on which interest was paid, or, if no interest was paid on the private
notes, from the date of issuance of the private notes, which was January 24,
2002. Holders whose private notes are accepted for exchange will be deemed to
have waived the right to receive any interest accrued on the private notes.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.

METHODS OF RECEIVING PAYMENTS ON THE NOTES

    If a Holder has given wire transfer instructions to the Company, the Company
will pay all principal, interest and premium and liquidated damages, if any, on
that Holder's notes in accordance with those instructions. All other payments on
notes will be made at the office or agency of the paying agent and registrar
within the City and State of New York unless the Company elects to make interest
payments by check mailed to the Holders at their addresses set forth in the
register of Holders.

PAYING AGENT AND REGISTRAR FOR THE NOTES

    The Trustee will initially act as paying agent and registrar. The Company
may change the paying agent or registrar without prior notice to the Holders,
and the Company or any of its Subsidiaries may act as paying agent or registrar.

TRANSFER AND EXCHANGE

    A Holder may transfer or exchange notes in accordance with the Indenture.
The registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company is not required to transfer or exchange any note selected
for redemption. Also, the Company is not required to transfer or exchange any
note for a period of 15 days before a selection of notes to be redeemed.

    The registered Holder of a note will be treated as the owner of it for all
purposes.

                                       69

GUARANTEES

    The Guarantors jointly and severally guarantee the due and punctual payment
of principal and of interest on the notes and all other obligations of the
Company under the Indenture. The Guarantees of the notes (including the payment
of principal of, premium, if any, and interest on the notes) are senior
obligations of such Guarantors and rank PARI PASSU in right of payment with all
existing and future senior obligations of the Guarantors and rank senior to all
subordinated obligations of such Guarantors. The Guarantees are secured to the
extent set forth below under "--Collateral." The obligations of each Guarantor
under its Guarantee are limited as necessary to prevent that Guarantee from
constituting a fraudulent conveyance under applicable law. See "Risk
Factors--Risks Relating to the Notes--Fraudulent Transfer--Federal and state
laws permit a court to void the notes or the guarantees under certain
circumstances."

    Until such time as all Guarantees of the notes by the Guarantors have been
released in accordance with the terms of the Indenture, OI Group will cause each
Domestic Subsidiary that guarantees the Company's obligations under the Credit
Agreement to become a Guarantor under the Indenture and thereby guarantee the
notes on the terms and conditions set forth in the Indenture. Upon the release
of a Guarantee by a Domestic Subsidiary under the Credit Agreement, the
Guarantee of such Domestic Subsidiary under the Indenture will be released and
discharged at such time. In the event any such Domestic Subsidiary thereafter
guarantees obligations under the Credit Agreement (or such released Guarantee
under the Credit Agreement is reinstated or renewed), then such Domestic
Subsidiary will guarantee the notes on the terms and conditions set forth in the
Indenture.

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

    (1) immediately after giving effect to that transaction, no Event of Default
       exists under the Indenture; and

    (2) either:

       (a) the Person acquiring the property in any such sale or disposition or
           the Person formed by or surviving any such consolidation or merger is
           organized or existing under the laws of the United States, any state
           thereof or the District of Columbia and assumes all the obligations
           of that Guarantor under the Indenture, its Guarantee, the Collateral
           Documents and the Registration Rights Agreement pursuant to a
           supplemental indenture satisfactory to the Trustee; or

       (b) such sale or other disposition complies with the "Asset Sale"
           provisions of the Indenture, including the application of the Net
           Proceeds therefrom.

    The Guarantee of a Guarantor will be released:

    (1) in connection with any sale or other disposition of all or substantially
       all of the assets of that Guarantor (including by way of merger or
       consolidation) to a Person that is not (either before or after giving
       effect to such transaction) a Restricted Subsidiary of OI Group, if the
       sale or other disposition of all or substantially all of the assets of
       that Guarantor complies with the "Asset Sale" provisions of the
       Indenture;

    (2) in connection with any sale of all of the Capital Stock of a Guarantor
       to a Person that is not (either before or after giving effect to such
       transaction) a Restricted Subsidiary of OI Group, if the sale of all such
       Capital Stock of that Guarantor complies with the "Asset Sale" provisions
       of the Indenture; or

                                       70

    (3) if OI Group properly designates any Restricted Subsidiary that is a
       Guarantor as an Unrestricted Subsidiary.

    The Guarantees will also be released in the circumstances described below
under the caption "--Certain Covenants--Merger, Consolidation or Sale of
Assets."

    The Collateral Documents provide that, upon the release of a Guarantee under
the Indenture, the security interests in the assets of that Guarantor securing
the notes and Guarantees of the notes will be released simultaneously.

RANKING

    The notes are senior obligations of the Company and rank PARI PASSU in right
of payment with all existing and future senior obligations of the Company
(including Indebtedness of the Company under the Credit Agreement) and rank
senior in right of payment to all subordinated obligations of the Company. The
notes are secured to the extent set forth below under "--Collateral" and
guaranteed by the Guarantors to the extent set forth above under "--Guarantees."
The Guarantees of the notes rank equal in right of payment to the Guarantees of
OI Group and the other Guarantors of their existing and future senior
obligations, including their obligations under the Credit Agreement, and senior
in right of payment to all subordinated obligations of the Guarantors, including
the guarantees of OI Group and OI Packaging of the obligations of OI Group's
parent, OI Inc., related to $1.7 billion of outstanding public debt securities.
The notes are effectively subordinated to obligations under the Credit Agreement
and the OI Inc. Senior Notes to the extent such obligations are secured by
collateral that does not secure the notes. The notes may also be effectively
subordinated to certain Indebtedness incurred to refinance borrowings under the
Credit Agreement to the extent that such Indebtedness is secured by collateral
that does not secure the notes.

    As of and for year ended December 31, 2001, the non-guarantor Subsidiaries
represented approximately:

    - 43% of OI Group's net sales;

    - 45% of OI Group's Consolidated Adjusted EBITDA; and

    - 42% of OI Group's consolidated assets.

    The liabilities of the non-guarantor Subsidiaries on a consolidated basis
were approximately $2.0 billion as of December 31, 2001.

    As of December 31, 2001, on a pro forma basis after giving effect to the
offering of the private notes and the application of the estimated net proceeds
therefrom, OI Group had approximately $5.4 billion of total consolidated
indebtedness, which includes approximately $2.5 billion of secured indebtedness
under the Credit Agreement.

COLLATERAL

    COLLATERAL SECURING THE NOTES.  The notes and the Guarantees of the notes
are secured, subject to the terms of the Collateral Documents, on a PARI PASSU
basis with the Indebtedness of the Company under the Credit Agreement, related
documents and liabilities owing to lenders or affiliates of lenders party to the
Credit Agreement and in connection with interest rate and currency agreements
and certain other Indebtedness permitted by the Credit Agreement.

    The notes and Guarantees of the notes are secured by:

    - a security interest in substantially all the assets (other than
      Intercompany Indebtedness and Capital Stock) of OI Group and of
      substantially all the Domestic Subsidiaries of OI Group; and

                                       71

    - a pledge by OI Group of the Capital Stock of all its direct Subsidiaries
      and Intercompany Indebtedness owing to OI Group by such direct
      Subsidiaries (other than the Capital Stock of OI General FTS Inc. ("OI
      General FTS") owned by OI Group and Intercompany Indebtedness owing to OI
      Group by OI General FTS) and a pledge by OI Packaging of the Capital Stock
      of the Company and Intercompany Indebtedness owing to OI Packaging by the
      Company (the "Additional Collateral").

    NEGATIVE PLEDGE.  Except as permitted and contemplated by, and subject to
the terms of, the Credit Agreement and the Pledge Agreement, OI Group will not
further pledge the Capital Stock of OI General FTS or the Intercompany
Indebtedness of OI General FTS owing to OI Group, as security or otherwise,
unless the notes and the Guarantees of the notes are secured on a PARI PASSU
basis with the applicable Indebtedness by this collateral.

    ADDITIONAL COLLATERAL SECURES THE CREDIT AGREEMENT.  In addition to the
Collateral securing the obligations under the notes and the Guarantees of the
notes, the obligations of the Credit Agreement Domestic Borrowers and the
domestic guarantors under the Credit Agreement are further secured by:

    - a pledge by OI Group of the Capital Stock of OI General FTS and
      Intercompany Indebtedness owing to OI Group by OI General FTS;

    - a pledge of the Capital Stock of substantially all of the Domestic
      Subsidiaries of OI General FTS, OI Plastic Products FTS Inc. and the
      Company;

    - a pledge of the Intercompany Indebtedness owed to OI General FTS, OI
      Plastic Products FTS Inc. and the Company and substantially all of their
      Domestic Subsidiaries; and

    - a pledge of 65% of the stock of the first-tier Foreign Subsidiaries.

In addition to being secured by the above, the offshore subfacilities and
related Guarantees under the Credit Agreement are also secured by the assets
(including stock and intercompany debt) of certain wholly-owned U.K. and
Australian Subsidiaries and by the remaining 35% of the stock of the first-tier
Foreign Subsidiaries. See "Risk Factors--Risks Relating to the Notes--Notes
Effectively Subordinated to Certain Secured Credit Agreement Obligations and
Obligations of OI Inc.--The notes are effectively subordinated to the
obligations under the secured credit agreement, certain obligations owing to
lenders or their affiliates as permitted under the secured credit agreement and
obligations related to OI Inc.'s $1.7 billion outstanding public debt securities
to the extent these obligations are secured by collateral that does not secure
the notes."

    SUFFICIENCY OF COLLATERAL.  The fair market value of the Collateral is
subject to fluctuations based on factors that include, among others, the
condition of the packaging products industry, the ability to sell the Collateral
in an orderly sale, the condition of the international, national and local
economies, the availability of buyers and similar factors. In the event of
foreclosure on the collateral, the proceeds from the sale of the collateral,
including the Collateral securing the notes and the Guarantees of the notes, may
not be sufficient to satisfy in full the Company's obligations under both the
Notes and the Credit Agreement and any senior, secured indebtedness ranking PARI
PASSU with the notes. The amount to be received upon such a sale would be
dependent on numerous factors, including but not limited to the timing and the
manner of the sale. In addition, the book value of the Collateral should not be
relied on as a measure of realizable value for such assets. By its nature,
portions of the Collateral may be illiquid and may have no readily ascertainable
market value. Accordingly, there can be no assurance that the Collateral can be
sold in a short period of time in an orderly manner. A significant portion of
the Collateral includes assets that may only be usable, and thus retain value,
as part of the existing operating businesses of OI Group and its Subsidiaries.
Accordingly, any such sale of the Collateral separate from the sale of certain
of OI Group's and its Subsidiaries' operating businesses may not be feasible or
of significant value. To the extent that third parties enjoy Liens permitted by
the Indenture

                                       72

such third parties may have rights and remedies with respect to the assets or
property subject to such Liens that, if exercised, could adversely affect the
value of the Collateral. In addition, in the event of a bankruptcy, the ability
of the Holders to realize upon any of the Collateral may be subject to certain
bankruptcy law limitations. See "Risk Factors--Risks Relating to the
Notes--Notes Effectively Subordinated to Certain Secured Credit Agreement
Obligations and Obligations of OI Inc.--The notes are effectively subordinated
to the obligations under the secured credit agreement, certain obligations owing
to lenders or their affiliates as permitted under the secured credit agreement
and obligations related to OI Inc.'s $1.7 billion of outstanding public debt
securities to the extent these obligations are secured by collateral that does
not secure the notes."

    The Company has the ability to issue additional notes as part of the same
series of these notes or in one or more different series, all of which may be
secured with the notes by the Collateral. OI Group and its Restricted
Subsidiaries can increase their Indebtedness but there can be no assurance that
there will be a proportionate increase in the value of the Collateral as a
percentage of the aggregate principal amount of outstanding notes.

CERTAIN BANKRUPTCY LIMITATIONS

    The right of the Collateral Agent to repossess and dispose of the Collateral
upon the occurrence of an Event of Default would be significantly impaired by
applicable bankruptcy law in the event that a bankruptcy case were to be
commenced by or against the Company, OI Group, or any of the Guarantors prior to
the Collateral Agent having repossessed and disposed of the Collateral. Upon the
commencement of a case for relief under Title 11 of the United States Code, as
amended (the "Bankruptcy Code"), a secured creditor such as the Collateral Agent
is prohibited from repossessing its security from a debtor in a bankruptcy case,
or from disposing of security repossessed from the debtor, without bankruptcy
court approval. Moreover, the Bankruptcy Code permits the debtor to continue to
retain and use Collateral even though the debtor is in default under the
applicable debt instruments PROVIDED that the secured creditor is given adequate
protection. The meaning of the term "adequate protection" may vary according to
circumstances, but it is intended in general to protect the value of the secured
creditor's interest in the Collateral and may include cash payments or the
granting of additional security, if and at such times as the court in its
discretion determines, for any diminution in the value of the Collateral as a
result of the stay or repossession or disposition or any use of the Collateral
by the debtor during the pendency of the bankruptcy case. A bankruptcy court may
determine that a secured creditor may not require compensation for a diminution
in the value of the Collateral if the value of the Collateral exceeds the debt
it secures.

    In view of the broad equitable powers of a bankruptcy court, it is
impossible to predict how long payments under the notes could be delayed
following commencement of a bankruptcy case, whether or when the Collateral
Agent could repossess or dispose of the Collateral, the value of the Collateral
at the time of the bankruptcy petition or whether or to what extent Holders of
the notes would be compensated for any delay in payment or loss of value of the
Collateral through the requirement of "adequate protection." Any disposition of
the Collateral during a bankruptcy case would also require permission from the
bankruptcy court. Furthermore, in the event a bankruptcy court determines the
value of the Collateral is not sufficient to repay all amounts due on the notes,
the Holders of the notes would hold secured claims to the extent of the value of
the Collateral to which the Holders of the notes are entitled, and unsecured
claims with respect to such shortfall. The Bankruptcy Code only permits the
payment and/or accrual of post-petition interest, costs and attorney's fees to a
secured creditor during a debtor's bankruptcy case to the extent the value of
the Collateral is determined by the bankruptcy court to exceed the aggregate
outstanding principal amount of the obligations secured by the Collateral.

                                       73

OPTIONAL REDEMPTION

    Except as described below, the notes are not redeemable at the Company's
option prior to February 15, 2006.

    After February 15, 2006, the Company may redeem all or a part of the notes
upon not less than 30 nor more than 60 days notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and liquidated damages, if any, thereon, to the applicable
redemption date, if redeemed during the twelve-month period beginning on
February 15, 2006 of the years indicated below:



YEAR                                                          PERCENTAGE
- ----                                                          ----------
                                                           
2006........................................................   104.438%
2007........................................................   102.219%
2008 and thereafter.........................................   100.000%


    At any time prior to February 15, 2005, the Company may redeem on any one or
more occasions up to 35% of the aggregate principal amount of notes (calculated
after giving effect to any issuance of additional notes) issued under the
Indenture at a redemption price of 108.875% of the principal amount thereof,
plus accrued and unpaid interest and liquidated damages, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings by
OI Inc. to the extent the net cash proceeds thereof are contributed to the
Company or used to purchase from the Company Capital Stock (other than
Disqualified Stock) of the Company; PROVIDED that:

    (1) at least 65% of the aggregate principal amount of notes issued under the
       Indenture remains outstanding immediately after the occurrence of such
       redemption (excluding notes held by OI Inc. and its Subsidiaries); and

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

    In addition, at any time prior to February 15, 2006, the notes may also be
redeemed, in whole but not in part, at the option of the Company upon the
occurrence of a Change of Control, upon not less than 30 nor more than 60 days
prior notice (but in no event more than 90 days after the occurrence of such
Change of Control or transfer event) mailed by first-class mail to each Holder's
registered address, at a redemption price equal to 100% of the principal amount
of notes redeemed plus the Applicable Premium as of, and accrued and unpaid
interest and liquidated damages, if any, to, the date of redemption (subject to
the right of Holders of record on the relevant record date to receive interest
due on the notes on the relevant interest payment date).

    "APPLICABLE PREMIUM" means, with respect to any note on any redemption date,
the greater of:

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

    (2) the excess of:

       (a) the present value at such redemption date of (1) the redemption price
           of such note at February 15, 2006 (such redemption price being set
           forth in the table above) plus (2) all required interest payments due
           on such note through February 15, 2006, (including accrued but unpaid
           interest) computed using a discount rate equal to the Treasury Rate
           on such redemption date plus 50 basis points; over

       (b) the principal amount of such note.

    "TREASURY RATE" means, as of any redemption date, the yield to maturity as
of such redemption date of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15(519) that has become publicly available at least two
business days prior to the redemption date (or, if such statistical release is
no longer published, any

                                       74

publicly available source of similar market data)) most nearly equal to the
period from the redemption date to February 15, 2006; PROVIDED, HOWEVER, that if
the period from the redemption date to February 15, 2006 is less than one year,
the weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.

MANDATORY REDEMPTION

    The Company is not required to make mandatory redemption or sinking fund
payments with respect to the notes.

REPURCHASE AT THE OPTION OF HOLDERS

    CHANGE OF CONTROL

    If a Change of Control occurs, unless the Company has exercised its right to
redeem the notes as described under "Optional Redemption," each Holder of notes
has the right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of that Holder's notes pursuant to a
change of control offer on the terms set forth in the Indenture (a "Change of
Control Offer"). In the Change of Control Offer, the Company will offer a
payment in cash equal to 101% of the aggregate principal amount of notes
repurchased plus accrued and unpaid interest and liquidated damages, if any,
thereon, to the date of purchase (the "Change of Control Payment"). Within
30 days following any Change of Control, the Company will mail a notice to each
Holder describing the transaction or transactions that constitute the Change of
Control and offering to repurchase notes on the date specified in such notice
(the "Change of Control Payment Date"), which date shall be no earlier than
30 days and no later than 60 days from the date such notice is mailed, pursuant
to the procedures required by the Indenture and described in such notice. The
Company will comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such laws
and regulations are applicable in connection with the repurchase of the notes as
a result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control provisions of
the Indenture, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under the
Change of Control provisions of the Indenture by virtue of such conflict.

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

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

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

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

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

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

    The Credit Agreement currently prohibits the Company from voluntarily
purchasing any notes, and also provides that certain change of control events
with respect to OI Inc., OI Group and the Company

                                       75

would constitute a default under that agreement. In the event a Change of
Control occurs at a time when the Company is prohibited from purchasing notes,
the Company could seek consent to purchase the notes or could attempt to
refinance its borrowings under the Credit Agreement. If the Company does not
obtain such a consent or repay such borrowings, the Company will remain
prohibited from purchasing Notes. In such case, the Company's failure to
purchase tendered notes would constitute an Event of Default under the Indenture
which would, in turn, constitute a default under the Credit Agreement.

    The provisions described above that require the Company to make a Change of
Control Offer following a Change of Control will be applicable regardless of
whether any other provisions of the Indenture are applicable. Except as
described above with respect to a Change of Control, the Indenture does not
contain provisions that permit the Holders of the notes to require that the
Company repurchase or redeem the notes in the event of a takeover,
recapitalization or similar transaction.

    The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to a Change of Control Offer made by the Company and
purchases all notes validly tendered and not withdrawn under such Change of
Control Offer.

    ASSET SALES

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

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

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

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

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

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

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

PROVIDED, that the 75% limitation referred to in clause (3) above will not apply
to any Asset Sale in which the cash portion of such consideration received
therefore on an after-tax basis, determined in

                                       76

accordance with clause (3) above, is equal to or greater than what the after-tax
net proceeds would have been had such transaction complied with such 75%
limitation.

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

    (1) to repay senior Indebtedness of the Company or any Guarantor and, if the
       senior Indebtedness of the Company or any Guarantor repaid is revolving
       credit Indebtedness, to correspondingly reduce commitments with respect
       thereto, if the terms of such revolving credit Indebtedness would require
       such a commitment reduction; PROVIDED, HOWEVER, that a non-Guarantor
       Restricted Subsidiary may use the Net Proceeds from an Asset Sale to
       repay senior Indebtedness of OI Group or any Restricted Subsidiary of OI
       Group;

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

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

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

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

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

Notwithstanding the foregoing, with respect to any Asset Sale by the Company or
any Guarantor, such Net Proceeds may only be applied pursuant to items (1) or
(6) above and, to the extent such Net Proceeds are applied to, or with respect
to, the Company, a Guarantor or a Person or a Restricted Subsidiary that becomes
a Guarantor, items (3), (4) or (5) above. Pending the final application of any
such Net Proceeds, OI Group or the applicable Restricted Subsidiary may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture.

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

                                       77

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

    The agreements governing OI Group's Indebtedness or the Company's other
Indebtedness contain prohibitions of certain events, including events that would
constitute a Change of Control or an Asset Sale. In addition, the exercise by
the Holders of notes of their right to require the Company to repurchase the
notes upon a Change of Control or an Asset Sale could cause a default under
these other agreements, even if the Change of Control or Asset Sale itself does
not, due to the financial effect of such repurchases on the Company or OI Group.
Finally, the Company's ability to pay cash to the Holders of notes upon a
repurchase may be limited by the Company's or OI Group's then existing financial
resources.

SELECTION AND NOTICE

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

    (1) if the notes are listed, in compliance with the requirements of the
       principal national securities exchange on which the notes are listed; or

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

    No notes of $1,000 or less will be redeemed in part. Notices of redemption
will be mailed by first class mail at least 30 but not more than 60 days before
the redemption date to each Holder of notes to be redeemed at its registered
address. Notices of redemption may not be conditional.

    If any note is to be redeemed in part only, the notice of redemption that
relates to that note will state the portion of the principal amount thereof to
be redeemed. A new note in principal amount equal to the unredeemed portion of
the original note will be issued in the name of the Holder thereof upon
cancellation of the original note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date, interest ceases to
accrue on notes or portions of them called for redemption.

CERTAIN COVENANTS

    FALL-AWAY EVENT

    If at any time the notes have achieved the Investment Grade Ratings, OI
Group and the Restricted Subsidiaries of OI Group will thereafter no longer be
subject to the covenants under "--Repurchase at the Option of Holders--Change of
Control" and "--Repurchase at the Option of Holders--Asset Sales" or the
following provisions of the Indenture under the heading "--Certain Covenants"
(even if the notes subsequently cease to have the Investment Grade Ratings):

    "--Restricted Payments,"

    "--Incurrence of Indebtedness and Issuance of Preferred Stock,"

    "--Liens,"

    "--Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries,"

    "--Transactions with Affiliates,"

    "--Additional Guarantees/Pledges," and

                                       78

    "--Payments for Consent"

(collectively, the "Extinguished Covenants"), PROVIDED that if upon the receipt
by the notes of the Investment Grade Ratings, a Default or Event of Default has
occurred and is continuing under the Indenture, the Company will continue to be
subject to the Extinguished Covenants until such time as no Default or Event of
Default is continuing.

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

    RESTRICTED PAYMENTS

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

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

                                       79

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

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

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

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

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

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

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

       (a) 50% of the Consolidated Net Income of OI Group for the period (taken
           as one accounting period) from the beginning of the first fiscal
           quarter commencing after the date of the Indenture to the end of OI
           Group's most recently ended fiscal quarter for which internal
           financial statements are available at the time of such Restricted
           Payment (or, if such Consolidated Net Income for such period is a
           deficit, less 100% of such deficit), PLUS

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

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

       (d) $15.0 million.

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

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

                                       80

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

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

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

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

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

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

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

    INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK

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

    The first paragraph of this covenant will not prohibit the incurrence of any
of the following items of Indebtedness (collectively, "Permitted Debt"):

    (1) the incurrence by OI Group or its Restricted Subsidiaries of
       Indebtedness under Credit Facilities (and the incurrence of Guarantees
       thereof) in an aggregate principal amount at any one time outstanding
       (with letters of credit being deemed to have a principal amount equal to
       the maximum potential liability of the Company and its Restricted
       Subsidiaries thereunder)

                                       81

       not to exceed $4.5 billion (of which not more than $1.41 billion of such
       Indebtedness shall be incurred by Restricted Subsidiaries that are not
       Guarantors);

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

    (3) the incurrence by OI Group, the Company and the Guarantors of
       Indebtedness represented by the private notes and the related Guarantees
       be issued on the date of the Indenture and the exchange notes to be
       issued pursuant the exchange offer;

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

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

    (6) provided that so long as no Default shall have occurred or be continuing
       or would be caused thereby, the incurrence by OI Group or any of its
       Restricted Subsidiaries of Indebtedness, the proceeds of which are or
       will be used to refund, refinance or replace the $300.0 million aggregate
       principal amount of 7.85% Senior Notes due 2004, the $350.0 million
       aggregate principal amount of 7.15% Senior Notes due 2005, the
       $300.0 million aggregate principal amount of 8.10% Senior Notes due 2007,
       the $250.0 million aggregate principal amount of 7.35% Senior Notes due
       2008 and the $250.0 million aggregate principal amount of 7.50% Senior
       Debentures due 2010, in each case of OI Inc;

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

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

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

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

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

                                       82

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

    (10) provided that so long as no Default shall have occurred or be
       continuing or would be caused thereby, the incurrence by any Foreign
       Subsidiary of OI Group of Indebtedness in an aggregate principal amount
       (or accreted value, as applicable) at any time outstanding, not to exceed
       $300.0 million, in addition to the $1.41 billion of Indebtedness that may
       be incurred under clause (1) of this paragraph;

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

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

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

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

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

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

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

                                       83

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

    The Company will not incur any Indebtedness (including Permitted Debt) after
the date of the Indenture that is contractually subordinated in right of payment
to any other Indebtedness of the Company unless such Indebtedness is also
contractually subordinated in right of payment to the notes on substantially
similar terms; PROVIDED, HOWEVER, that no Indebtedness of the Company shall be
deemed to be contractually subordinated in right of payment to any other
Indebtedness of the Company solely by virtue of being unsecured.

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

    For purposes of determining compliance with this "Incurrence of Indebtedness
and Issuance of Preferred Stock" covenant, in the event that any proposed
Indebtedness meets the criteria of more than one of the categories of Permitted
Debt described in clauses (1) through (18) above, or is entitled to be incurred
pursuant to the first paragraph of this covenant, the Company will be permitted
to classify such item of Indebtedness on the date of its incurrence in any
manner that complies with this covenant, or later reclassify all or a portion of
such item of Indebtedness. Indebtedness under Credit Facilities outstanding on
the date on which notes are first issued and authenticated under the Indenture
shall be deemed to have been incurred on such date in reliance on the exception
provided by clauses (1) or (2) of the definition of Permitted Debt above.

    LIENS

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

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

    (2) Liens existing on the Issue Date;

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

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

    (5) Permitted Liens; and

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

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

    DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES

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

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

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

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

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

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

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

    (3) applicable law;

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

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

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

                                       85

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

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

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

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

    MERGER, CONSOLIDATION OR SALE OF ASSETS

    OI Group will not, in any transaction or series of transactions, merge or
consolidate with or into, or, directly or indirectly, sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all of its
properties and assets to, any Person or Persons, and OI Group will not permit
any of its Restricted Subsidiaries to enter into any such transaction or series
of transactions if such transaction or series of transactions, in the aggregate,
would result in a sale, assignment, conveyance, transfer, lease or other
disposition of all or substantially all of the properties and assets of OI Group
and its Restricted Subsidiaries, on a consolidated basis, to any other Person or
Persons, unless at the time and after giving effect thereto:

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

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

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

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

    This "Merger, Consolidation or Sale of Assets" covenant will not apply to
(i) a merger or consolidation of OI Group, the Company or any of the Guarantors
with or into any other of the Company, OI Group or any of the Guarantors or the
sale, assignment, conveyance, transfer, lease or other disposition of assets
between or among the Company, OI Group and any of its Guarantors and (ii) a
merger or consolidation of any Foreign Subsidiary with or into OI Group or any
of its Restricted

                                       86

Subsidiaries or the sale, assignment, conveyance, transfer, lease or other
disposition of assets from any Foreign Subsidiary to OI Group or any of its
Restricted Subsidiaries.

    On and after the one-year anniversary of the date of this prospectus, the
Company will be permitted to assign its obligations under the notes and the
Indenture to OI Inc., and the Company and each Guarantor will thereafter be
released from its obligations under the notes, the Guarantees of the notes and
the Indenture provided that (1) OI Inc. assumes all of the obligations under the
notes and the Indenture, and (2) the obligations of each Credit Agreement
Domestic Borrower under the Credit Agreement have been or will be concurrently
assumed by OI Inc. in accordance with the terms of the Credit Agreement. Under
the Credit Agreement, the Credit Agreement Domestic Borrowers may assign or
transfer their rights and obligations thereunder to OI Inc. and all of
OI Inc.'s subsidiaries will be concurrently released from their guarantees upon
the consent of the requisite lenders thereunder if the term loans have been
repaid, if OI Inc. has achieved and maintains immediately following such
assumption (including the assumption of the notes) the investment grade ratings
specified under the Credit Agreement and if all obligations of Subsidiaries of
OI Inc. in respect of the OI Inc. Senior Notes, the notes and certain other debt
have been released and assumed by OI Inc.

    TRANSACTIONS WITH AFFILIATES

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

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

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

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

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

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

    (3) payment of reasonable directors fees;

    (4) Restricted Payments that are permitted by the provisions of the
       Indenture described above under the caption "--Restricted Payments";

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

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

    (7) payments by OI Group or any of its Restricted Subsidiaries to KKR and
       its Affiliates for any financial advisory, financing, underwriting or
       placement services or in respect of other

                                       87

       investment banking activities, including, without limitation, in
       connection with acquisitions or divestitures which payments are approved
       by a majority of the Board of Directors of OI Group in good faith;

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

    (9) in addition to any payments referred to in (6) above, payments or loans
       to officers, directors and employees of OI Group, any of its direct or
       indirect parent corporations or any Restricted Subsidiary of OI Group for
       business or personal purposes and other loans and advances, in accordance
       with any policy of OI Group which shall have been approved by the Board
       of Directors of OI Group in good faith from time to time, to such
       officers, directors and employees for travel, entertainment, moving and
       other relocation expenses made in the ordinary course of business of OI
       Group, any of its direct or indirect parent corporations or any
       Restricted Subsidiary of OI Group;

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

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

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

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

    ADDITIONAL GUARANTEES/PLEDGES

    If a Domestic Subsidiary of OI Group or any of its Restricted Subsidiaries
guarantees Indebtedness under the Credit Agreement, including the reinstatement
or renewal of a Guarantee of Indebtedness under the Credit Agreement previously
released under the Credit Agreement, then that Domestic Subsidiary must become a
Guarantor and execute a supplemental indenture and deliver an Opinion of Counsel
to the Trustee within 10 business days of the date on which it executes a
guarantee under the Credit Agreement.

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

    DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES

    The Board of Directors of OI Group may designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if that designation would not cause a Default;
PROVIDED that in no event shall the business currently operated by the Company
be transferred to or held by an Unrestricted Subsidiary. If a Restricted
Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair
Market Value of all outstanding Investments owned by OI Group and its Restricted
Subsidiaries in the

                                       88

Subsidiary so designated will be deemed to be a Restricted Investment made as of
the time of such designation and that designation will only be permitted if such
Investment would be permitted at that time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. The Board of
Directors of OI Group may at any time designate any Unrestricted Subsidiary to
be a Restricted Subsidiary; PROVIDED that such designation shall be deemed to be
an incurrence of Indebtedness by a Restricted Subsidiary of OI Group of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if (1) such Indebtedness is permitted under the covenant
described under the caption "--Certain Covenants--Incurrence of Indebtedness and
Issuance of Preferred Stock," calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period;
and (2) no Default or Event of Default would be in existence following such
designation.

    LIMITATIONS ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS

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

    Notwithstanding the preceding paragraph, any Guarantee will provide by its
terms that it will be automatically and unconditionally released and discharged
under the circumstances described above under the caption "--Guarantees." The
form of the Guarantee will be attached as an exhibit to, or included in, the
Indenture.

    PAYMENTS FOR CONSENT

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

    REPORTS

    Whether or not required by the SEC, so long as any notes are outstanding, OI
Group will furnish to the Holders of the notes, within the time periods
specified in the SEC's rules and regulations:

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

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

    In addition, whether or not required by the SEC, OI Group will file a copy
of all of the information and reports referred to in clauses (1) and (2) above
with the SEC for public availability within the time periods specified in the
SEC's rules and regulations (unless the SEC will not accept such a filing) and
make such information available to securities analysts and prospective investors
upon request. In addition, the Company and the Guarantors have agreed that, for
so long as any notes remain outstanding, they will furnish to the Holders and to
securities analysts and prospective investors,

                                       89

upon their request, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act.

EVENTS OF DEFAULT AND REMEDIES

    Each of the following is an Event of Default:

    (1) default for 30 days in the payment when due of interest on, or
       liquidated damages, if any, with respect to, the notes;

    (2) default in payment when due of the principal of, or premium, if any, on
       the notes;

    (3) failure by OI Group or any of its Restricted Subsidiaries to comply with
       the provisions described under the captions "--Repurchase at the Option
       of Holders--Change of Control," "--Repurchase at the Option of
       Holders--Asset Sales" or "--Certain Covenants--Merger, Consolidation or
       Sale of Assets";

    (4) failure by OI Group or any of its Restricted Subsidiaries for 60 days
       after notice to comply with any of the other agreements in the Indenture,
       the notes, the Guarantees of the notes (with respect to any Guarantor)
       and the Collateral Documents (with respect to any Restricted Subsidiary
       which has pledged assets or property to secure its obligations under the
       Indenture and the notes);

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

       (a) is caused by a failure to pay principal of, or interest or premium,
           if any, on such Indebtedness prior to the expiration of the grace
           period provided in such Indebtedness on the date of such default (a
           "Payment Default"); or

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

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

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

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

    (8) certain events of bankruptcy or insolvency with respect to the Company,
       OI Group or any Significant Subsidiary of OI Group; and

    (9) except as permitted by the Collateral Documents, any amendments thereto
       and the provisions of the Indenture, any of the Collateral Documents
       ceases to be in full force and effect or

                                       90

       ceases to be effective, in all material respects, to create the Lien
       purported to be created in the Collateral in favor of the Holders for
       60 days after notice.

    In the case of an Event of Default arising from certain events of bankruptcy
or insolvency, with respect to OI Group or any Significant Subsidiary of OI
Group, all outstanding notes will become due and payable immediately without
further action or notice. If any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding notes may declare all the notes to be due and payable
immediately.

    A Holder of notes may not pursue any remedy with respect to the Indenture,
the notes, any Guarantee or any Collateral Document unless: (1) the Holder gives
to the Trustee written notice of a continuing Event of Default; (2) the Holders
of at least 25% in principal amount of such notes outstanding make a written
request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to
the Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense; (4) the Trustee does not comply with the request within 30 days after
receipt of the request and the offer of indemnity; and (5) during such 30-day
period the Holders of a majority in principal amount of the outstanding notes do
not give the Trustee a direction which is inconsistent with the request. Subject
to certain limitations, Holders of a majority in principal amount of the then
outstanding notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders of the notes notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to
the payment of principal or interest or liquidated damages) if it determines
that withholding notice is in their interest.

                                       91

    The Holders of a majority in aggregate principal amount of the notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest or liquidated damages on, or the principal of, the notes.

    The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture. Upon becoming aware of any Default or
Event of Default, the Company is required to deliver to the Trustee a statement
specifying such Default or Event of Default.

NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS

    No director, officer, employee, incorporator or stockholder of the Company
or any Guarantor, as such, shall have any liability for any obligations of the
Company or the Guarantors under the notes, the Indenture, the Guarantees of the
notes, the Collateral Documents or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of notes by accepting
a note waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the notes. The waiver may not be effective
to waive liabilities under the federal securities laws.

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

    The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding notes and all obligations
of the Guarantors discharged with respect to their Guarantees of the notes
("Legal Defeasance") except for:

    (1) the rights of Holders of outstanding notes to receive payments in
       respect of the principal of, or interest or premium and liquidated
       damages, if any, on such notes when such payments are due from the trust
       referred to below;

    (2) the Company's obligations with respect to the notes concerning issuing
       temporary notes, registration of notes, mutilated, destroyed, lost or
       stolen notes and the maintenance of an office or agency for payment and
       money for security payments held in trust;

    (3) the rights, powers, trusts, duties and immunities of the Trustee, and
       the Company's and the Guarantors' obligations in connection therewith;
       and

    (4) the Legal Defeasance provisions of the Indenture.

    In addition, the Company may, at its option and at any time, elect to have
the obligations of the Company and the Guarantors released with respect to
certain covenants that are described in the Indenture ("Covenant Defeasance")
and thereafter any omission to comply with those covenants shall not constitute
a Default or Event of Default with respect to the notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "Events of
Default" will no longer constitute an Event of Default with respect to the
notes.

    In order to exercise either Legal Defeasance or Covenant Defeasance:

    (1) the Company must irrevocably deposit with the Trustee, in trust, for the
       benefit of the Holders of the notes, cash in U.S. dollars, non-callable
       Government Securities, or a combination thereof, in such amounts as will
       be sufficient, in the opinion of a nationally recognized firm of
       independent public accountants, to pay the principal of, or interest and
       premium and liquidated damages, if any, on the outstanding notes on the
       stated maturity or on the applicable redemption date, as the case may be,
       and the Company must specify whether the notes are being defeased to
       maturity or to a particular redemption date;

                                       92

    (2) in the case of Legal Defeasance, the Company shall have delivered to the
       Trustee an Opinion of Counsel reasonably acceptable to the Trustee
       confirming that (a) the Company has received from, or there has been
       published by, the Internal Revenue Service a ruling or (b) since the date
       of the Indenture, there has been a change in the applicable federal
       income tax law, in either case to the effect that, and based thereon such
       Opinion of Counsel shall confirm that, the Holders of the outstanding
       notes will not recognize income, gain or loss for federal income tax
       purposes as a result of such Legal Defeasance and will be subject to
       federal income tax on the same amounts, in the same manner and at the
       same times as would have been the case if such Legal Defeasance had not
       occurred;

    (3) in the case of Covenant Defeasance, the Company shall have delivered to
       the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
       confirming that the Holders of the outstanding notes will not recognize
       income, gain or loss for federal income tax purposes as a result of such
       Covenant Defeasance and will be subject to federal income tax on the same
       amounts, in the same manner and at the same times as would have been the
       case if such Covenant Defeasance had not occurred;

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

    (5) such Legal Defeasance or Covenant Defeasance will not result in a breach
       or violation of, or constitute a default under any material agreement or
       instrument to which OI Group or the Company or any of their Restricted
       Subsidiaries are a party or by which OI Group or the Company or any of
       such Restricted Subsidiaries are bound;

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

    (7) the Company must deliver to the Trustee an Officers' Certificate stating
       that the deposit was not made by the Company with the intent of
       preferring the Holders of notes over the other creditors of the Company
       with the intent of defeating, hindering, delaying or defrauding creditors
       of the Company or others; and

    (8) the Company must deliver to the Trustee an Officers' Certificate and an
       Opinion of Counsel, each stating that all conditions precedent relating
       to the Legal Defeasance or the Covenant Defeasance have been complied
       with.

AMENDMENT, SUPPLEMENT AND WAIVER

    Except as provided in the next two succeeding paragraphs, the Indenture, the
notes or the Guarantees of the notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the notes
then outstanding (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, notes), and any
existing default or compliance with any provision of the Indenture, the notes or
the Guarantees of the notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding notes (including, without
limitation, consents obtained in connection with a purchase of, or

                                       93

tender offer or exchange offer for, notes). Amendments to the Collateral
Documents will be made in accordance with their terms.

    Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any notes held by a non-consenting Holder):

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

    (2) reduce the principal of or change the fixed maturity of any note or
       alter the provisions, or waive any payment, with respect to the
       redemption of the notes;

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

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

    (5) make any note payable in money other than U.S. dollars;

    (6) make any change in the provisions of the Indenture relating to waivers
       of past Defaults or the rights of Holders of notes to receive payments of
       principal of, or interest or premium or liquidated damages, if any, on
       the notes;

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

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

    (9) amend, change or modify the obligation of the Company to make and
       consummate an Asset Sale Offer with respect to any Asset Sale in
       accordance with the "--Repurchase at the Option of Holders--Asset Sales"
       covenant or the obligation of the Company to make and consummate a Change
       of Control Offer in the event of a Change of Control in accordance with
       the "--Repurchase at the Option of Holders--Change of Control" covenant,
       including, in each case, amending, changing or modifying any definition
       relating thereto;

    (10) except as otherwise permitted under the "--Merger, Consolidation and
       Sale of Assets" covenant, consent to the assignment or transfer by OI
       Group, the Company or any Guarantor of any of their rights or obligations
       under the Indenture;

    (11) amend or modify any of the provisions of the Indenture or any Guarantee
       of the notes in a manner material and adverse to the Holders of the notes
       except (a) in accordance with the terms of the Indenture or such
       Guarantee or (b) as permitted by the following paragraph;

    (12) amend or modify any of the provisions of the Collateral Documents
       except (a) in accordance with the terms of such documents or (b) as
       permitted by the following paragraph; or

    (13) make any change in the preceding amendment and waiver provisions.

    Notwithstanding the preceding, without the consent of any Holder of notes,
the Company, the Guarantors and the Trustee may amend or supplement the
Indenture, the notes, the Guarantees and the Collateral Documents:

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

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

                                       94

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

    (4) to provide for the assumption of the Company's obligations to Holders of
       the notes by OI Inc. in accordance with the provisions of the Indenture;

    (5) to make any change that would provide any additional rights or benefits
       to the Holders of notes or that does not adversely affect the legal
       rights under the Indenture, the Guarantees of the notes or the Collateral
       Documents of any such Holder (including, but not limited to, adding a
       Guarantor under the Indenture and adding additional collateral for the
       benefit of the Holders of the notes); or

    (6) to comply with requirements of the SEC in order to effect or maintain
       the qualification of the Indenture under the Trust Indenture Act.

    The consent of the Holders of the notes is not necessary under the Indenture
to approve the particular form of any proposed amendment. It is sufficient if
such consent approves the substance of the proposed amendment.

    After an amendment under the Indenture becomes effective, the Company is
required to mail to the Holders of the notes a notice briefly describing such
amendment. However, the failure to give such notice to all the Holders of the
notes, or any defect therein, will not impair or affect the validity of the
amendment.

SATISFACTION AND DISCHARGE

    The Indenture will be discharged and will cease to be of further effect as
to all notes issued thereunder, when:

    (1) either:

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

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

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

    (3) the Company or any Guarantor has paid or caused to be paid all sums
       payable by it under the Indenture; and

                                       95

    (4) the Company has delivered irrevocable instructions to the Trustee under
       the Indenture to apply the deposited money toward the payment of the
       notes at maturity or the redemption date, as the case may be.

    In addition, the Company must deliver an Officers' Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.

INTERCREDITOR AGREEMENT

    The Intercreditor Agreement governs, among other things, (i) the direction
of the Collateral Agent with respect to the exercise of remedies under the
Pledge Agreement, the Security Agreement and the Mortgages, (ii) the
distribution of the proceeds of certain asset sales of collateral by OI Group
and its subsidiaries and the proceeds of insurance and condemnation awards, and
(iii) the distribution of proceeds of any foreclosure upon and sale of
collateral under the Pledge Agreement, the Security Agreement and the Mortgages.
Pursuant to the Intercreditor Agreement, the lenders under the Credit Agreement
direct the Collateral Agent with respect to decisions relating to the exercise
of remedies under the Pledge Agreement, the Security Agreement and the
Mortgages, including whether to foreclose on the collateral following a default
on the notes. Holders of the notes are generally not entitled to share in the
proceeds of any asset sales of Collateral by OI Group or any subsidiary or
insurance or condemnation proceeds unless pursuant to enforcement actions under
the Collateral Documents. Net proceeds of any sales of collateral from an
enforcement action are first shared ratably among the senior secured parties
(including the Holders of the notes to the extent secured at such time by the
collateral giving rise to such proceeds) based upon the relevant amounts due and
payable to such senior secured party (less, in the case of the Holders of the
notes, proceeds with respect to prior sales held by the Trustee, but not applied
to payments on the notes). Amendments to the Intercreditor Agreement necessary
to permit the incurrence of additional indebtedness secured by the collateral
and to add additional secured parties thereto may be made without the consent of
the Trustee or the Holders of the notes, insofar as the foregoing is not
prohibited under the Indenture.

THE PLEDGE AGREEMENT

    The Pledge Agreement provides for the pledge by OI Group and OI Packaging of
the Capital Stock of, and Intercompany Indebtedness owed to OI Group and OI
Packaging by, their respective direct Subsidiaries to secure OI Group's and its
Subsidiaries' obligations, including OI Packaging, under or in respect of the
Credit Agreement and certain other senior indebtedness, and under or in respect
of the notes, including their respective Guarantees, in each case on a senior
basis, and the obligations under or in respect of OI Inc.'s outstanding public
debt securities on a junior basis. The notes will not be secured by the Capital
Stock of OI General FTS Inc. and the Intercompany Indebtedness owed by OI
General FTS Inc. to OI Group, which is pledged to the lenders under the Pledge
Agreement. See "Risk Factors--Risks Relating to the Notes--Notes Effectively
Subordinated to Certain Secured Credit Agreement Obligations and Obligations of
OI Inc.--The notes are effectively subordinated to the obligations under the
secured credit agreement, certain obligations owing to lenders or their
affiliates as permitted under the secured credit agreement and obligations
related to OI Inc.'s $1.7 billion of outstanding public debt securities to the
extent these obligations are secured by collateral that does not secure the
notes." Upon the occurrence of an Event of Default (as defined in the Pledge
Agreement), the Pledge Agreement provides for the foreclosure upon and sale of
the pledged collateral, including the Collateral pledged to secure the notes, by
the Collateral Agent and the ratable distribution of the net proceeds of any
such sale (to the extent secured by the applicable collateral) first to the
holders of the senior secured obligations and second to the holders of the
junior secured obligations, in each case in accordance with the Intercreditor
Agreement. In general, the lenders under the Credit Agreement have the power to
terminate the Pledge Agreement and release the collateral pledged thereunder
when the obligations under the Credit Agreement have been paid in full, when the
collateral thereunder no

                                       96

longer secures the obligations under the Credit Agreement, or when OI Inc. and
OI Group achieve the investment grade ratings specified in the Credit Agreement
and the Collateral Agent acknowledges such ratings. In addition, all or any
portion of the collateral pledged under the Pledge Agreement may be released
upon the approval of lenders under the Credit Agreement.

SECURITY AGREEMENT AND MORTGAGES

    The Security Agreement and the Mortgages provide for the granting of
security interests and liens by OI Group and substantially all its Domestic
Subsidiaries in substantially all of their respective personal property
(excluding the collateral pledged under the Pledge Agreement) and real property
consisting of fee or ground leasehold interests with an individual value in
excess of $25.0 million subject to certain exceptions. Subject to certain
limitations and exceptions, the security interests granted under the Security
Agreement secure the obligations of OI Group and its Subsidiaries under or in
respect of the Credit Agreement, certain other senior indebtedness and the
notes, including their respective Guarantees, and the liens granted by the
Mortgages secure the obligations of the applicable mortgagor under or in respect
of the Credit Agreement, certain other senior indebtedness and the notes,
including their respective guarantees. The collateral under the Security
Agreement consisting of the Capital Stock of substantially all of the Domestic
Subsidiaries of Credit Agreement Domestic Borrowers, Intercompany Indebtedness
owed to the Credit Agreement Domestic Borrowers and substantially all of their
Domestic Subsidiaries, and the Capital Stock of the first-tier foreign
subsidiaries will not secure the notes. See "Risk Factors--Risks Relating to the
Notes--Notes Effectively Subordinated to Certain Secured Credit Agreement
Obligations and Obligations of OI Inc.--The notes are effectively subordinated
to the obligations under the secured credit agreement, certain obligations owing
to lenders or their affiliates as permitted under the secured credit agreement
and obligations related to OI Inc.'s $1.7 billion of outstanding public debt
securities to the extent these obligations are secured by collateral that does
not secure the notes." Upon the occurrence of an Event of Default (as defined in
the Security Agreement and the Mortgages, as applicable), the Security Agreement
and the Mortgages provide for the foreclosure upon and sale of the applicable
collateral, including the Collateral pledged to secure the notes, by the
Collateral Agent and the distribution of the net proceeds of any such sale (to
the extent secured by the applicable collateral) first to the holders of the
secured obligations in each case in accordance with the Intercreditor Agreement.
In general, the lenders under the Credit Agreement have the power to terminate
the Security Agreement and Mortgages and release the collateral thereunder when
the obligations under the Credit Agreement have been paid in full, when the
collateral thereunder no longer secures the obligations under the Credit
Agreement, or when OI Inc. and OI Group achieve the investment grade ratings
specified in the Credit Agreement and the Collateral Agent acknowledges such
ratings. In addition, all or any portion of the collateral under the Security
Agreement and the Mortgages may be released upon the approval of lenders under
the Credit Agreement.

RELEASES OF COLLATERAL

    Under the terms of the Collateral Documents, the lenders under the Credit
Agreement determine the circumstances and manner in which the collateral,
including the Collateral securing the notes and the Guarantees of the notes,
shall be disposed of, including, but not limited to, the determination of
whether to release all or any portion of the Collateral from the Liens created
by the Collateral Documents and whether to foreclose on the Collateral following
a default on the notes. Generally, upon any sale, transfer or other disposition
of Collateral in a transaction not prohibited by the Credit Agreement and the
Collateral Documents, including an Asset Sale, the Collateral will be released
from the Liens created by the Collateral Documents. Moreover, when the
obligations under the Credit Agreement have been paid in full, when the
collateral under the Collateral Documents no longer secures the obligations
under the Credit Agreement and upon election of the applicable grantors or
pledgors, or when OI Inc. and OI Group achieve the investment grade ratings
specified in the Credit

                                       97

Agreement and the Collateral Agent acknowledges such ratings, each of the
Collateral Documents may be terminated and the collateral, including the
Collateral securing the notes and the Guarantees of the notes, thereunder
released. The Holders of the notes, however, are entitled, under certain
circumstances, to their ratable share of the distribution of the proceeds of the
Collateral as described in the Intercreditor Agreement. See "--Intercreditor
Agreement." In addition, the Collateral Documents provide that upon release of a
Guarantee under the Indenture, the security interest in the assets of that
Guarantor securing the notes and the Guarantees of the notes will be released
simultaneously. Under the indemnification provisions contained in the
Intercreditor Agreement, any pro rata payments due to the Collateral Agent from
the Holders of the notes will be deducted from their portion of the proceeds
from the Collateral prior to the distribution of such proceeds. The amount of
indebtedness secured under the Collateral Documents may be increased without the
consent of the Trustee or the Holders of the notes.

CONCERNING THE TRUSTEE

    If the Trustee becomes a creditor of the Company or any Guarantor, the
Indenture limits its right to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security or
otherwise. The Trustee will be permitted to engage in other transactions;
however, if it acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the SEC for permission to continue or resign.

    The Holders of a majority in principal amount of the then outstanding notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur and be continuing, the Trustee will be required, in the exercise of
its power, to use the degree of care of a prudent man in the conduct of his own
affairs. Subject to such provisions, the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
Holder of notes, unless such Holder shall have offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.

ADDITIONAL INFORMATION

    Anyone who receives this prospectus may obtain a copy of the Indenture
without charge by writing to Owens-Brockway Glass Container Inc., One SeaGate,
Toledo, Ohio 43666, Attention: Investor Relations.

BOOK-ENTRY, DELIVERY AND FORM

    The exchange notes will be issued in registered, global form in minimum
denominations of $1,000 and integral multiples of $1,000 in excess thereof. The
exchange notes will be represented by one or more exchange notes in registered,
global form without interest coupons (collectively, the "Global Notes"). The
Global Notes will be deposited upon issuance with the Trustee as custodian for
The Depository Trust Company ("DTC"), in New York, New York, and registered in
the name of DTC or its nominee, in each case for credit to an account of a
direct or indirect participant in DTC as described below.

    Except as set forth below, the Global Notes may be transferred, in whole and
not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global Notes may not be exchanged for
exchange notes in certificated form except in the limited circumstances
described below. See "--Exchange of Book-Entry Notes for Certificated Notes."
Except in the limited circumstances described below, owners of beneficial
interests in the Global Notes will not be entitled to receive physical delivery
of exchange notes in certificated form.

                                       98

    Transfers of beneficial interests in the Global Notes will be subject to the
applicable rules and procedures of DTC and its direct or indirect participants
(including, if applicable, those of Euroclear and Clearstream), which may change
from time to time.

DEPOSITORY PROCEDURES

    The following description of the operations and procedures of DTC, Euroclear
and Clearstream are provided solely as a matter of convenience. These operations
and procedures are solely within the control of the respective settlement
systems and are subject to changes by them. The Company takes no responsibility
for these operations and procedures and urges investors to contact the system or
their participants directly to discuss these matters.

    DTC has advised the Company that DTC is a limited-purpose trust company
created to hold securities for its participating organizations (collectively,
the "Participants") and to facilitate the clearance and settlement of
transactions in those securities between Participants through electronic
book-entry changes in accounts of its Participants. The Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. Access to DTC's system is also available to
other entities such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Participant, either directly
or indirectly (collectively, the "Indirect Participants"). Persons who are not
Participants may beneficially own securities held by or on behalf of DTC only
through the Participants or the Indirect Participants. The ownership interests
in, and transfers of ownership interests in, each security held by or on behalf
of DTC are recorded on the records of the Participants and Indirect
Participants.

    DTC has also advised the Company that, pursuant to procedures established by
it:

    (1) upon deposit of the Global Notes, DTC will credit the accounts of
       Participants designated by the exchange agent with portions of the
       principal amount of the Global Notes; and

    (2) ownership of these interests in the Global Notes will be shown on, and
       the transfer of ownership thereof will be effected only through, records
       maintained by DTC (with respect to the Participants) or by the
       Participants and the Indirect Participants (with respect to other owners
       of beneficial interest in the Global Notes).

    Investors in the Global Notes who are Participants in DTC's system may hold
their interests therein directly through DTC. Investors in the Global Notes who
are not Participants may hold their interests therein indirectly through
organizations (including Euroclear and Clearstream) which are Participants in
such system. Euroclear and Clearstream will hold interests in the Global Notes
on behalf of their participants through customers' securities accounts in their
respective names on the books of their respective depositories, which are Morgan
Guaranty Trust Company of New York, Brussels office, as operator of Euroclear,
and Citibank, N.A., as operator of Clearstream. All interests in a Global Note,
including those held through Euroclear or Clearstream, may be subject to the
procedures and requirements of DTC. Those interests held through Euroclear or
Clearstream may also be subject to the procedures and requirements of such
systems. The laws of some states require that certain Persons take physical
delivery in definitive form of securities that they own. Consequently, the
ability to transfer beneficial interests in a Global Note to such Persons will
be limited to that extent. Because DTC can act only on behalf of Participants,
which in turn act on behalf of Indirect Participants, the ability of a Person
having beneficial interests in a Global Note to pledge such interests to Persons
that do not participate in the DTC system, or otherwise take actions in respect
of such interests, may be affected by the lack of a physical certificate
evidencing such interests.

                                       99

    EXCEPT AS DESCRIBED BELOW, OWNERS OF AN INTEREST IN THE GLOBAL NOTES WILL
NOT HAVE EXCHANGE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL
DELIVERY OF EXCHANGE NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE
REGISTERED OWNERS OR "HOLDERS" THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.

    Payments in respect of the principal of, and interest and premium and
liquidated damages, if any, on a Global Note registered in the name of DTC or
its nominee will be payable to DTC in its capacity as the registered Holder
under the Indenture. Under the terms of the Indenture, the Company and the
Trustee will treat the Persons in whose names the notes, including the Global
Notes, are registered as the owners thereof for the purpose of receiving
payments and for all other purposes. Consequently, neither the Company, the
Trustee nor any agent of the Company or the Trustee has or will have any
responsibility or liability for:

    (1) any aspect of DTC's records or any Participant's or Indirect
       Participant's records relating to or payments made on account of
       beneficial ownership interest in the Global Notes or for maintaining,
       supervising or reviewing any of DTC's records or any Participant's or
       Indirect Participant's records relating to the beneficial ownership
       interests in the Global Notes; or

    (2) any other matter relating to the actions and practices of DTC or any of
       its Participants or Indirect Participants.

    DTC has advised the Company that its current practice, upon receipt of any
payment in respect of securities such as the exchange notes (including principal
and interest), is to credit the accounts of the relevant Participants with the
payment on the payment date unless DTC has reason to believe it will not receive
payment on such payment date. Each relevant Participant is credited with an
amount proportionate to its beneficial ownership of an interest in the principal
amount of the relevant security as shown on the records of DTC. Payments by the
Participants and the Indirect Participants to the beneficial owners of exchange
notes will be governed by standing instructions and customary practices and will
be the responsibility of the Participants or the Indirect Participants and will
not be the responsibility of DTC, the Trustee or the Company. Neither the
Company nor the Trustee will be liable for any delay by DTC or any of its
Participants in identifying the beneficial owners of the notes, and the Company
and the Trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee for all purposes.

    Transfers between Participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds, and transfers between
participants in Euroclear and Clearstream will be effected in accordance with
their respective rules and operating procedures.

    Cross-market transfers between the Participants in DTC, on the one hand, and
Euroclear or Clearstream participants, on the other hand, will be effected
through DTC in accordance with DTC's rules on behalf of Euroclear or
Clearstream, as the case may be, by its respective depositary; however, such
cross-market transactions will require delivery of instructions to Euroclear or
Clearstream, as the case may be, by the counterparty in such system in
accordance with the rules and procedures and within the established deadlines
(Brussels time) of such system. Euroclear or Clearstream, as the case may be,
will, if the transaction meets its settlement requirements, deliver instructions
to its respective depositary to take action to effect final settlement on its
behalf by delivering or receiving interests in the relevant Global Note in DTC,
and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Euroclear participants and
Clearstream participants may not deliver instructions directly to the
depositories for Euroclear or Clearstream.

    DTC has advised the Company that it will take any action permitted to be
taken by a Holder of notes only at the direction of one or more Participants to
whose account DTC has credited the interests in the Global Notes and only in
respect of such portion of the aggregate principal amount of the notes as to
which such Participant or Participants has or have given such direction.
However, if

                                      100

there is an Event of Default under the notes, DTC reserves the right to exchange
the Global Notes for legended notes in certificated form, and to distribute such
notes to its Participants.

    Although DTC, Euroclear and Clearstream have agreed to the foregoing
procedures to facilitate transfers of interests in the Global Notes among
participants in DTC, Euroclear and Clearstream, they are under no obligation to
perform or to continue to perform such procedures, and may discontinue such
procedures at any time. Neither the Company nor the Trustee nor any of their
respective agents will have any responsibility for the performance by DTC,
Euroclear or Clearstream or their respective Participants or Indirect
Participants of their respective obligations under the rules and procedures
governing their operations.

EXCHANGE OF GLOBAL NOTES FOR CERTIFICATED NOTES

    A Global Note is exchangeable for definitive notes in registered
certificated form ("Certificated Notes") if:

    (1) DTC (a) notifies the Company that it is unwilling or unable to continue
       as depositary for the Global Notes and the Company fails to appoint a
       successor depositary or (b) has ceased to be a clearing agency registered
       under the Exchange Act;

    (2) the Company, at its option, notifies the Trustee in writing that it
       elects to cause the issuance of the Certificated Notes; or

    (3) there shall have occurred and be continuing a Default or Event of
       Default with respect to the notes.

    In addition, beneficial interests in a Global Note may be exchanged for
Certificated Notes upon prior written notice given to the Trustee by or on
behalf of DTC in accordance with the Indenture. In all cases, Certificated Notes
delivered in exchange for any Global Note or beneficial interests in Global
Notes will be registered in the names, and issued in any approved denominations,
requested by or on behalf of the depositary (in accordance with its customary
procedures) and will bear the applicable restrictive legend referred to in
"Notice to Investors," unless that legend is not required by applicable law.

SAME DAY SETTLEMENT AND PAYMENT

    The Company will make payments in respect of the notes represented by the
Global Notes (including principal, premium, if any, interest and liquidated
damages, if any) by wire transfer of immediately available funds to the accounts
specified by the Global Note Holder. The Company will make all payments of
principal, interest and premium and liquidated damages, if any, with respect to
Certificated Notes by wire transfer of immediately available funds to the
accounts specified by the Holders thereof or, if no such account is specified,
by mailing a check to each such Holder's registered address. The notes
represented by the Global Notes are eligible to trade in DTC's Same-Day Funds
Settlement System, and any permitted secondary market trading activity in such
notes will, therefore, be required by DTC to be settled in immediately available
funds. The Company expects that secondary trading in any Certificated Notes will
also be settled in immediately available funds.

    Because of time zone differences, the securities account of a Euroclear or
Clearstream participant purchasing an interest in a Global Note from a
Participant in DTC will be credited, and any such crediting will be reported to
the relevant Euroclear or Clearstream participant, during the securities
settlement processing day (which must be a business day for Euroclear and
Clearstream) immediately following the settlement date of DTC. DTC has advised
the Company that cash received in Euroclear or Clearstream as a result of sales
of interests in a Global Note by or through a Euroclear or Clearstream
participant to a Participant in DTC will be received with value on the
settlement date of

                                      101

DTC but will be available in the relevant Euroclear or Clearstream cash account
only as of the business day for Euroclear or Clearstream following DTC's
settlement date.

CERTAIN DEFINITIONS

    Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.

    "ACQUIRED DEBT" means, with respect to any specified Person:

    (1) Indebtedness of any other Person existing at the time such other Person
       is merged with or into or became a Restricted Subsidiary of such
       specified Person, whether or not such Indebtedness is incurred in
       connection with, or in contemplation of, such other Person merging with
       or into, or becoming a Restricted Subsidiary of, such specified Person;
       and

    (2) Indebtedness secured by a Lien encumbering any asset acquired by such
       specified Person.

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

    "ASSET SALE" means:

    (1) the sale, lease, conveyance or other disposition of any assets; PROVIDED
       that the sale, conveyance or other disposition of all or substantially
       all of the assets of OI Group and its Restricted Subsidiaries taken as a
       whole will be governed by the provisions of the Indenture described above
       under the caption "--Certain Covenants--Merger, Consolidation or Sale of
       Assets" and not by the provisions of the Asset Sale covenant; and

    (2) the issuance of Equity Interests by any of OI Group's Restricted
       Subsidiaries or the sale of Equity Interests in any of OI Group's
       Restricted Subsidiaries.

    Notwithstanding the preceding, the following items shall not be deemed to be
Asset Sales:

    (1) any single transaction or series of related transactions that involves
       assets or Equity Interests having a Fair Market Value of less than
       $10.0 million;

    (2) a transfer of assets between or among OI Group and its Restricted
       Subsidiaries;

    (3) an issuance of Equity Interests by a Restricted Subsidiary of OI Group
       to OI Group or to another Restricted Subsidiary of OI Group;

    (4) the sale or lease of equipment, inventory, accounts receivable or other
       assets in the ordinary course of business;

    (5) the sale, lease, conveyance or other disposition of any assets securing
       the Indenture or the Credit Agreement in connection with the enforcement
       of the security interests contained therein pursuant to the terms of the
       Intercreditor Agreement;

    (6) the sale or other disposition of cash or Cash Equivalents;

    (7) a Restricted Payment that is permitted by the covenant described above
       under the caption "--Certain Covenants--Restricted Payments"; and

                                      102

    (8) the exchange of assets held by OI Group or a Restricted Subsidiary of OI
       Group for assets held by any Person or entity (including Equity Interests
       of such Person or entity), provided that (i) the assets received by OI
       Group or such Restricted Subsidiary of OI Group in any such exchange will
       immediately constitute, be part of, or be used in a Permitted Business;
       and (ii) any such assets received are of a comparable Fair Market Value
       to the assets exchanged as determined in good faith by OI Group.

    "BOARD OF DIRECTORS" means:

    (1) with respect to a corporation, the board of directors of the
       corporation;

    (2) with respect to a partnership, the Board of Directors of the general
       partner of the partnership; and

    (3) with respect to any other Person, the board or committee of such Person
       serving a similar function.

    "CAPITAL LEASE OBLIGATION" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance with
GAAP.

    "CAPITAL STOCK" means:

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

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

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

    (4) any other interest or participation that confers on a Person the right
       to receive a share of the profits and losses of, or distributions of
       assets of, the issuing Person.

    "CASH EQUIVALENTs" means:

    (1) United States dollars;

    (2) securities issued or directly and fully guaranteed or insured by the
       United States government or any agency or instrumentality thereof and
       (a) backed by the full faith and credit of the United States or
       (b) having a rating of at least AAA from S&P or at least Aaa from
       Moody's, in each case maturing not more than one year from the date of
       acquisition;

    (3) securities issued by any state of the United States of America or any
       political subdivision of any such state or any public instrumentality
       thereof maturing within one year of the date of acquisition thereof and,
       at the time of acquisition, having the highest rating obtainable from
       either S&P or Moody's;

    (4) certificates of deposit and eurodollar time deposits with maturities of
       one year or less from the date of acquisition, bankers' acceptances with
       maturities not exceeding one year and overnight bank deposits, in each
       case, with any lender under the Credit Agreement or any domestic
       commercial bank having capital and surplus of not less than
       $250.0 million;

    (5) repurchase and reverse repurchase obligations for underlying securities
       of the types described in clauses (2) and (4) above entered into with any
       financial institution meeting the qualifications specified in clause (4)
       above;

    (6) commercial paper having the highest rating obtainable from Moody's or
       S&P and in each case maturing within one year from the date of creation
       thereof; and

                                      103

    (7) money market funds at least 95% of the assets of which constitute Cash
       Equivalents of the kinds described in clauses (1) through (6) of this
       definition or that has a rating of at least AAA from S&P or at least Aaa
       from Moody's.

    "CHANGE OF CONTROL" means the occurrence of any of the following:

    (1) OI Inc. or OI Group becomes aware of (by way of a report or any other
       filing pursuant to Section 13(d) of the Exchange Act, proxy, vote,
       written notice or otherwise) the acquisition by any Person or group
       (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
       Exchange Act, or any successor provision), including any group acting for
       the purpose of acquiring, holding or disposing of securities (within the
       meaning of Rule 13d-5(b)(1) under the Exchange Act), other than the
       Principals and their Related Parties, in a single transaction or in a
       related series of transactions, by way of merger, consolidation or other
       business combination or purchase of beneficial ownership (within the
       meaning of Rule 13d-3 under the Exchange Act, or any successor provision)
       of 35% or more of the total voting power of the Voting Stock of OI Inc.;
       or

    (2) the first day on which a majority of the members of the Board of
       Directors of OI Inc. are not Continuing Directors; or

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

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

    "COLLATERAL" means all of the property from time to time in which Liens are
purported to be granted to secure the notes or Guarantees of the notes pursuant
to the Collateral Documents.

    "COLLATERAL AGENT" shall have the meaning given to it in the Credit
Agreement.

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

    "CONSOLIDATED CASH FLOW" means, with respect to any specified Person for any
period, the Consolidated Net Income of such Person for such period PLUS:

    (1) an amount equal to any extraordinary loss realized by such Person or any
       of its Restricted Subsidiaries in connection with any sale or other
       disposition of assets, to the extent such losses were deducted in
       computing such Consolidated Net Income; PLUS

                                      104

    (2) provision for taxes based on income or profits of such Person and its
       Restricted Subsidiaries for such period, to the extent that such
       provision for taxes was deducted in computing such Consolidated Net
       Income; PLUS

    (3) consolidated interest expense of such Person and its Restricted
       Subsidiaries for such period, whether paid or accrued and whether or not
       capitalized (including without limitation amortization of debt issuance
       costs and original issue discount, non-cash interest payments, the
       interest component of any deferred payment obligations, the interest
       component of all payments associated with Capital Lease Obligations,
       commissions, discounts and other fees and charges incurred in respect of
       letter of credit or bankers' acceptance financings, and net of the effect
       of all payments made or received pursuant to Hedging Obligations), to the
       extent that any such expense was deducted in computing such Consolidated
       Net Income; PLUS

    (4) depreciation, amortization (including amortization of goodwill and other
       intangibles but excluding amortization of prepaid cash expenses that were
       paid in a prior period) and other non-cash charges and expenses
       (excluding any amortization of a prepaid cash expense that was paid in a
       prior period) of such Person and its Restricted Subsidiaries for such
       period to the extent that such depreciation, amortization and other
       non-cash charges and expenses were deducted in computing such
       Consolidated Net Income; MINUS

    (5) an amount equal to any extraordinary gain realized by such person or any
       of its Restricted Subsidiaries in connection with any sale or other
       disposition of assets, to the extent such gains were included in
       computing such Consolidated Net Income; MINUS

    (6) pension expenses, retiree medical expenses and any other material
       non-cash items increasing Consolidated Net Income for such period that
       are disclosed in such Person's financial statements, other than accrual
       of revenue in the ordinary course of business, in each case without
       duplication, on a consolidated basis and determined in accordance with
       GAAP; MINUS

    (7) net cash payments to OI Inc. by OI Group for (i) claims of persons for
       exposure to asbestos containing products and expenses related thereto and
       (ii) dividends on any outstanding preferred stock of OI Inc., in each
       case without duplication, on a consolidated basis and determined in
       accordance with GAAP.

    Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation, amortization and other non-cash charges and
expenses of, a Restricted Subsidiary of OI Group will be added to Consolidated
Net Income to compute Consolidated Cash Flow of OI Group only to the extent that
a corresponding amount would be permitted at the date of determination to be
dividended to OI Group by such Restricted Subsidiary without prior governmental
approval (that has not been obtained), and would not be prohibited, directly or
indirectly, by the operation of the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders, other
than agreements, instruments, judgments, decrees, orders, statutes, rules and
government regulations existing on the Issue Date.

    "CONSOLIDATED NET INCOME" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:

    (1) the Net Income (but not loss) of any Person that is not a Restricted
       Subsidiary or that is accounted for by the equity method of accounting
       will be included only to the extent of the amount of dividends or
       distributions paid in cash to the specified Person or a Wholly Owned
       Restricted Subsidiary of the specified Person;

                                      105

    (2) the Net Income of any Restricted Subsidiary will be excluded to the
       extent that the declaration or payment of dividends or similar
       distributions by that Restricted Subsidiary of that Net Income is not at
       the date of determination permitted without any prior governmental
       approval (that has not been obtained) or, is prohibited, directly or
       indirectly, by operation of the terms of its charter or any agreement,
       instrument, judgment, decree, order, statute, rule or governmental
       regulation applicable to that Restricted Subsidiary or its stockholders,
       other than agreements, instruments, judgments, decrees, orders, statutes,
       rules and government regulations existing on the Issue Date;

    (3) the Net Income of any Person acquired in a pooling of interests
       transaction for any period prior to the date of such acquisition will be
       excluded;

    (4) the cumulative effect of a change in accounting principles under GAAP
       will be excluded;

    (5) all extraordinary, unusual or nonrecurring gains and losses (including
       without limitation any one-time costs incurred in connection with
       acquisitions) (together with any related provision for taxes) will be
       excluded;

    (6) any gain or loss (together with any related provision for taxes)
       realized upon the sale or other disposition of any property, plant or
       equipment of the specified Person or its Restricted Subsidiaries
       (including pursuant to any sale and leaseback arrangement) which is not
       sold or otherwise disposed of in the ordinary course of business and any
       gain or loss (together with any related provision for taxes) realized
       upon the sale or other disposition by the specified Person or any
       Restricted Subsidiary of the specified Person of any Capital Stock of any
       Person or any Asset Sale will be excluded to the extent that any such
       gain or loss exceeds $5.0 million with respect to any one occurrence or
       $15.0 million in the aggregate with respect to gains or losses during any
       twelve-month period;

    (7) the Net Income of any Unrestricted Subsidiary will be excluded, whether
       or not distributed to the specified Person or one of its Subsidiaries;
       and

    (8) any deduction for minority owners' interest in earnings of Subsidiaries
       will be excluded.

    "CONTINUING DIRECTORS" means, as of any date of determination, any member of
the Board of Directors of OI Inc., who:

    (1) was a member of such Board of Directors on the date of the Indenture; or

    (2) was nominated for election or elected to such Board of Directors with
       the approval of a majority of the Continuing Directors who were members
       of such Board at the time of such nomination or election.

    "CREDIT AGREEMENT" means that certain Secured Credit Agreement, dated as of
April 23, 2001, by and among the Borrowers named therein, OI Group and
Owens-Illinois General, Inc., as Borrower's Agent, Deutsche Banc Alex. Brown and
Banc of America Securities, LLC, as Joint Lead Arrangers and Joint Book
Managers, Deutsche Bank AG, London Branch, as UK Administrative Agent, Bankers
Trust Company, as Administrative Agent, and the other Agents and the other
Lenders named therein, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, amended and restated, modified, renewed, refunded,
replaced, substituted or refinanced or otherwise restructured (including but not
limited to, the inclusion of additional borrowers thereunder) from time to time.

    "CREDIT AGREEMENT DOMESTIC BORROWERS" means the Company, OI General
FTS Inc. and OI Plastic Products FTS Inc., to the extent at the time of
determination such entity is a borrower under the Credit Agreement and any other
Domestic Subsidiary of OI Group that is, at the relevant time, a borrower under
the Credit Agreement.

                                      106

    "CREDIT FACILITIES" means (1) one or more debt facilities (including,
without limitation, the Credit Agreement) or commercial paper facilities, in
each case with banks or other lenders providing for revolving credit loans, term
loans, bankers acceptances, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow from
such lenders against such receivables) or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced, refinanced or
otherwise restructured in whole or in part from time to time (collectively,
"Bank Facilities"); and (2) notes, debentures or other financing instruments or
any combination thereof incurred after the Issue Date ("Non-Bank Refinancing"),
including any refinancing thereof, to the extent such Non-Bank Refinancing
replaces, refinances or otherwise restructures Indebtedness under Credit
Facilities PROVIDED that after giving effect to the issuance and use of proceeds
of such Non-Bank Refinancing, OI Group and/or its Restricted Subsidiaries will
have available borrowings under the Bank Facilities of at least $2.5 billion.

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

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

    "DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the Holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable (other than as a
result of a change of control or asset sale), pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the Holder thereof
(other than as a result of a change of control or asset sale), in whole or in
part, on or prior to the date that is 91 days after the date on which the notes
mature or are no longer outstanding. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
Holders thereof have the right to require OI Group or the Company to repurchase
such Capital Stock upon the occurrence of a change of control or an asset sale
shall not constitute Disqualified Stock if the terms of such Capital Stock
provide that OI Group or the Company may not repurchase or redeem any such
Capital Stock pursuant to such provisions unless such repurchase or redemption
complies with the covenant described above under the caption "--Certain
Covenants--Restricted Payments."

    "DOMESTIC SUBSIDIARY" means any Restricted Subsidiary of OI Group other than
a Foreign Subsidiary.

    "EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

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

    "EXISTING INDEBTEDNESS" means the aggregate principal or commitment amount
of Indebtedness of OI Group and its Subsidiaries (other than Indebtedness under
the Credit Agreement) in existence on the date of the Indenture, until such
amounts are repaid or terminated.

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

                                      107

    "FAIR MARKET VALUE" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length transaction, for cash, between a
willing seller and a willing and able buyer, neither of whom is under pressure
or compulsion to complete the transaction.

    "FIXED CHARGE COVERAGE RATIO" means with respect to any specified Person and
its Restricted Subsidiaries for any period, the ratio of the Consolidated Cash
Flow of such Person and its Restricted Subsidiaries for such period to the Fixed
Charges of such Person and its Restricted Subsidiaries for such period. In the
event that the specified Person or any of its Restricted Subsidiaries incurs,
assumes, guarantees, repays, repurchases or redeems any Indebtedness or issues,
repurchases or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on or
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, Guarantee, repayment, repurchase or redemption of Indebtedness, or
such issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.

    In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

    (1) acquisitions and dispositions that have been made by the specified
       Person or any of its Restricted Subsidiaries, including through mergers
       or consolidations and including any related financing transactions,
       during the four-quarter reference period or subsequent to such reference
       period and on or prior to the Calculation Date shall be given pro forma
       effect as if they had occurred on the first day of the four-quarter
       reference period and Consolidated Cash Flow for such reference period
       shall be calculated on a pro forma basis in accordance with
       Regulation S-X under the Securities Act;

    (2) the Consolidated Cash Flow attributable to discontinued operations, as
       determined in accordance with GAAP, and operations or businesses disposed
       of prior to the Calculation Date, shall be excluded;

    (3) the Fixed Charges attributable to discontinued operations, as determined
       in accordance with GAAP, and operations or businesses disposed of prior
       to the Calculation Date, shall be excluded, but only to the extent that
       the obligations giving rise to such Fixed Charges will not be obligations
       of the specified Person or any of its Subsidiaries following the
       Calculation Date;

    (4) the consolidated interest expense attributable to interest on any
       Indebtedness computed on a pro forma basis and (a) bearing a floating
       interest rate shall be computed as if the rate in effect on the date of
       computation had been the applicable rate for the entire period and
       (b) that was not outstanding during the period for which the computation
       is being made but which bears, at the option of such Person, a fixed or
       floating rate of interest, shall be computed by applying at the option of
       such Person either the fixed or floating rate; and

    (5) the consolidated interest expense attributable to interest on any
       working capital borrowings under a revolving credit facility computed on
       a pro forma basis shall be computed based upon the average daily balance
       of such working capital borrowings during the applicable period.

    "FIXED CHARGES" means, with respect to any specified Person and its
Restricted Subsidiaries for any period, the sum, without duplication, of:

    (1) the consolidated interest expense of such Person and its Restricted
       Subsidiaries for such period, whether paid or accrued, including, without
       limitation, amortization of debt issuance costs and original issue
       discount, non-cash interest payments, the interest component of any
       deferred payment obligations, the interest component of all payments
       associated with Capital Lease Obligations, imputed interest with respect
       to attributable debt, commissions, discounts

                                      108

       and other fees and charges incurred in respect of letter of credit or
       bankers' acceptance financings, and net of the effect of all payments
       made or received pursuant to Hedging Obligations; PLUS

    (2) the consolidated interest of such Person and its Restricted Subsidiaries
       that was capitalized during such period; PLUS

    (3) interest actually paid by the Company or any such Restricted Subsidiary
       under any Guarantee of Indebtedness or other obligation of any other
       Person; PLUS

    (4) the product of (a) all dividends, whether paid or accrued and whether or
       not in cash, on any series of Disqualified Stock or preferred stock of
       such Person or any of its Restricted Subsidiaries, other than dividends
       on Equity Interests payable solely in Equity Interests of OI Group (other
       than Disqualified Stock) or to OI Group or a Restricted Subsidiary of OI
       Group, times (b) a fraction, the numerator of which is one and the
       denominator of which is one minus the then current combined federal,
       state and local statutory tax rate of such Person, expressed as a
       decimal, in each case, on a consolidated basis and in accordance with
       GAAP.

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

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

    "GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.

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

    "GUARANTORS" means:

    (1) OI Group;

    (2) each direct or indirect Domestic Subsidiary of OI Group (other than the
       Company) that guarantees the Credit Agreement as of the date of the
       Indenture; and

    (3) each future direct or indirect Domestic Subsidiary of OI Group that
       guarantees the Credit Agreement and executes a Guarantee of the notes in
       accordance with the provisions of the Indenture;

and their respective successors and assigns.

    "HEDGING OBLIGATIONS" means, with respect to any specified Person, the
obligations of such Person under:

    (1) interest rate swap agreements, interest rate cap agreements interest
       rate collar agreements and other agreements or arrangements designed to
       protect such Person against fluctuations in interest rates;

    (2) currency exchange swap agreements, currency exchange cap agreements,
       currency exchange collar agreements and other agreements or arrangements
       designed to protect such Person against fluctuations in currency values;
       and

                                      109

    (3) commodity swap agreements; commodity cap agreements, commodity collar
       agreements and other agreements or arrangements designed to protect such
       Person against fluctuations in commodity prices.

    "HOLDER" means a Person in whose name a note is registered on the
registrar's books.

    "INDEBTEDNESS" means, with respect to any specified Person, any indebtedness
of such Person, whether or not contingent, in respect of:

    (1) borrowed money;

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

    (3) banker's acceptances;

    (4) representing Capital Lease Obligations;

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

    (6) representing any Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes the lesser of the Fair Market Value on the date of
incurrence of any asset of the specified Person subject to a Lien securing the
Indebtedness of others and the amount of such Indebtedness secured and, to the
extent not otherwise included, the Guarantee by the specified Person of any
indebtedness of any other Person.

    The amount of any Indebtedness outstanding as of any date shall be:

    (1) the accreted value thereof, in the case of any Indebtedness issued with
       original issue discount; and

    (2) the principal amount thereof, in the case of any other Indebtedness.

    "INTERCOMPANY INDEBTEDNESS" means any Indebtedness of OI Group or any
Subsidiary of OI Group which, in the case of OI Group, is owing to OI Inc. or
any Subsidiary of OI Group and, in the case of any Subsidiary of OI Group, is
owing to OI Group or any other Subsidiary of OI Group.

    "INTERCREDITOR AGREEMENT" means the intercreditor agreement, dated as of
April 23, 2001, by and among Bankers Trust Company, as administrative agent for
the lenders party to the Credit Agreement, Bankers Trust Company, as Collateral
Agent and any other parties thereto, as amended, amended and restated or
otherwise modified from time to time.

    "INVESTMENT GRADE PERMITTED LIENS" means:

    (1) Liens arising under the Collateral Documents other than Liens securing
       the OI Inc. Senior Notes on the Issue Date;

    (2) Liens incurred after the Issue Date on the assets (including shares of
       Capital Stock and Indebtedness) of OI Group or any Domestic Subsidiary of
       OI Group; PROVIDED, HOWEVER, that the aggregate amount of Indebtedness
       and other obligations at any time outstanding secured by such Liens
       pursuant to clause (1) above and this clause (2) shall not exceed the sum
       of $5.5 billion plus 50% of Tangible Assets acquired by the Company or
       any Domestic Subsidiary after the Issue Date;

    (3) Liens in favor of OI Group or any Domestic Subsidiary of OI Group;

    (4) Liens on property or shares of capital stock of a Person existing at the
       time such Person is merged with or into or consolidated with OI Group or
       any Domestic Subsidiary of OI Group;

                                      110

       PROVIDED that such Liens were not incurred in connection with or in
       contemplation of such merger or consolidation and do not extend to any
       assets other than those of the Person merged into or consolidated with OI
       Group or the Domestic Subsidiary;

    (5) Liens on property or shares of capital stock existing at the time of
       acquisition thereof by OI Group or any Domestic Subsidiary of OI Group,
       PROVIDED that such Liens were not incurred in connection with or in
       contemplation of such acquisition and do not extend to any property other
       than the property so acquired by OI Group or the Domestic Subsidiary;

    (6) Liens (including extensions and renewals thereof) upon real or personal
       (whether tangible or intangible) property acquired after the Issue Date,
       PROVIDED that:

       (a) such Lien is created solely for the purpose of securing Indebtedness
           incurred to finance all or any part of the purchase price or cost of
           construction or improvement of property, plant or equipment subject
           thereto and such Lien is created prior to, at the time of or within
           12 months after the later of the acquisition, the completion of
           construction or the commencement of full operation of such property,
           plant or equipment or to refinance any such Indebtedness previously
           so secured;

       (b) the principal amount of the Indebtedness secured by such Lien does
           not exceed 100% of such cost; and

       (c) any such Lien shall not extend to or cover any property or assets
           other than such item of property or assets and any improvements on
           such item;

    (7) Liens to secure any Capital Lease Obligation or operating lease;

    (8) Liens encumbering customary initial deposits and margin deposits;

    (9) Liens securing Indebtedness under Hedging Obligations;

    (10) Liens arising out of conditional sale, title retention, consignment or
       similar arrangements for the sale of goods entered into by OI Group or
       any of its Domestic Subsidiaries in the ordinary course of business of OI
       Group and its Domestic Subsidiaries;

    (11) Liens on or sales of receivables and customary cash reserves
       established in connection therewith;

    (12) Liens securing OI Group's or any of its Domestic Subsidiary's
       obligations in respect of bankers' acceptances issued or created to
       facilitate the purchase, shipment or storage of inventory or other goods;
       and

    (13) Liens for taxes, assessments or governmental charges or claims that are
       not yet delinquent or that are being contested in good faith by
       appropriate proceedings promptly instituted and diligently concluded,
       PROVIDED that any reserve or other appropriate provision as shall be
       required in conformity with GAAP shall have been made therefor.

    "INVESTMENT GRADE RATINGS" means a debt rating of the notes of BBB- or
higher by S&P and Baa3 or higher by Moody's or the equivalent of such ratings by
S&P or Moody's or in the event S&P or Moody's shall cease rating the notes and
the Company shall select any other Rating Agency, the equivalent of such ratings
by such other Rating Agency.

    "INVESTMENTS" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons in the forms of loans (including
Guarantees thereof), advances or capital contributions (excluding commission,
travel and similar advances to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP. If OI Group or any Restricted Subsidiary of OI Group sells
or otherwise disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary of OI

                                      111

Group such that, after giving effect to any such sale or disposition, such
Person is no longer a Restricted Subsidiary of OI Group, OI Group shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the Fair Market Value of the Equity Interests of such Restricted
Subsidiary not sold or disposed of in an amount determined as provided in the
final paragraph of the covenant described above under the caption "--Certain
Covenants--Restricted Payments." The acquisition by OI Group or any Restricted
Subsidiary of OI Group of a Person that holds an Investment in a third Person
shall be deemed to be an Investment by OI Group or such Restricted Subsidiary in
such third Person in an amount equal to the Fair Market Value of the Investment
held by the acquired Person in such third Person in an amount determined as
provided in the final paragraph of the covenant described above under the
caption "--Certain Covenants--Restricted Payments."

    "ISSUE DATE" means January 24, 2002, the date of the original issuance of
the private notes.

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

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

    "MOODY'S" means Moody's Investors Service, Inc. or any successor rating
agency.

    "MORTGAGES" means mortgages as defined under the Credit Agreement securing
real property in the United States of America.

    "NET INCOME" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends.

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

    "NON-RECOURSE DEBT" means Indebtedness:

    (1) as to which neither OI Group nor any of its Restricted Subsidiaries
       (a) provides credit support of any kind (including any undertaking,
       agreement or instrument that would constitute Indebtedness), (b) is
       directly or indirectly liable as a guarantor or otherwise, or
       (c) constitutes the lender;

    (2) no default with respect to which (including any rights that the Holders
       thereof may have to take enforcement action against an Unrestricted
       Subsidiary) would permit upon notice, lapse of time or both any Holder of
       any other Indebtedness of OI Group or any of its Restricted Subsidiaries
       to declare a default on such other Indebtedness or cause the payment
       thereof to be accelerated or payable prior to its stated maturity; and

    (3) as to which the lenders have been notified in writing that they will not
       have any recourse to the stock or assets of OI Group or any of its
       Restricted Subsidiaries.

                                      112

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

    "OFFSHORE COLLATERAL DOCUMENTS" means the Offshore Security Agreements and
the Mortgages securing real property outside of the United States of America.

    "OFFSHORE SECURITY AGREEMENTS" has the meaning assigned to such term in the
Credit Agreement.

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

    "OI INC. SENIOR NOTES" means the Indebtedness of OI Inc. outstanding as of
any date pursuant to its $300.0 million aggregate principal amount of 7.85%
Senior Notes due 2004, $350.0 million aggregate principal amount of 7.15% Senior
Notes due 2005, $300.0 million aggregate principal amount of 8.10% Senior Notes
due 2007, $250.0 million aggregate principal amount of 7.35% Senior Notes due
2008, $250.0 million aggregate principal amount of 7.50% Senior Debentures due
2010, and $250.0 million aggregate principal amount of 7.80% Senior Debentures
due 2018.

    "PERMITTED BUSINESS" means any business conducted or proposed to be
conducted (as described in the offering memorandum relating to the private
notes) by OI Group and its Restricted Subsidiaries on the date of the Indenture
and other businesses reasonably related or ancillary thereto.

    "PERMITTED INVESTMENTS" means:

    (1) any Investment in the Company, OI Group or in a Restricted Subsidiary of
       OI Group;

    (2) any Investment in cash or Cash Equivalents and, with respect to Foreign
       Subsidiaries, short term Investments similar to Cash Equivalents
       customarily used in the countries in which such Foreign Subsidiaries are
       located;

    (3) any Investment by OI Group or any Restricted Subsidiary of OI Group in a
       Person, if as a result of such Investment:

       (a) such Person becomes a Restricted Subsidiary of OI Group; or

       (b) such Person is merged, consolidated or amalgamated with or into, or
           transfers or conveys substantially all of its assets to, or is
           liquidated into, OI Group or a Restricted Subsidiary of OI Group;

    (4) any Investment made as a result of the receipt of non-cash consideration
       from an Asset Sale that was made pursuant to and in compliance with the
       covenant described above under the caption "--Repurchase at the Option of
       Holders--Asset Sales";

    (5) any acquisition of assets solely in exchange for the issuance of Equity
       Interests (other than Disqualified Stock) of OI Inc., the Company or OI
       Group;

    (6) Hedging Obligations;

    (7) advances to employees, officers and directors not in excess of
       $2.0 million outstanding at any one time, in the aggregate;

    (8) obligations of employees, officers and directors, not in excess of
       $2.0 million outstanding at any one time, in the aggregate, in connection
       with such employees', officers' or directors' acquisition of shares of
       OI Inc. common stock, so long as no cash is actually advanced to such
       employees, officers or directors in connection with the acquisition of
       any such shares;

    (9) any Investment existing on the Issue Date; and

                                      113

    (10) other Investments in any Person having an aggregate Fair Market Value
       (measured on the date each such Investment was made and without giving
       effect to subsequent changes in value), when taken together with all
       other such Investments outstanding at any such time, not to exceed
       $150.0 million.

    "PERMITTED LIENS" means:

    (1) Liens arising under the Collateral Documents other than Liens securing
       the OI Inc. Senior Notes on the Issue Date;

    (2) Liens incurred after the Issue Date on the assets (including shares of
       Capital Stock and Indebtedness) of OI Group or any Restricted Subsidiary
       of OI Group; PROVIDED, HOWEVER, that the aggregate amount of Indebtedness
       and other obligations at any time outstanding secured by such Liens
       pursuant to clause (1) above and this clause (2) shall not exceed the sum
       of $5.5 billion plus 50% of Tangible Assets acquired by the Company or
       any Guarantor or that are owned by any Restricted Subsidiary that becomes
       a Guarantor after the Issue Date;

    (3) Liens in favor of OI Group or any Restricted Subsidiary of OI Group;

    (4) Liens on property or shares of capital stock of a Person existing at the
       time such Person is merged with or into or consolidated with OI Group or
       any Restricted Subsidiary of OI Group; PROVIDED that such Liens were not
       incurred in connection with or in contemplation of such merger or
       consolidation and do not extend to any assets other than those of the
       Person merged into or consolidated with OI Group or the Restricted
       Subsidiary;

    (5) Liens on property or shares of capital stock existing at the time of
       acquisition thereof by OI Group or any Restricted Subsidiary of OI Group,
       PROVIDED that such Liens were not incurred in connection with or in
       contemplation of such acquisition and do not extend to any property other
       than the property so acquired by OI Group or the Restricted Subsidiary;

    (6) Liens on property or shares of capital stock of any Foreign Subsidiary,
       including shares of capital stock of any Foreign Subsidiary owned by a
       Domestic Subsidiary, to secure Indebtedness of a Foreign Subsidiary
       permitted to be incurred under the Indenture;

    (7) Liens (including extensions and renewals thereof) upon real or personal
       (whether tangible or intangible) property acquired after the Issue Date,
       PROVIDED that:

       (a) such Lien is created solely for the purpose of securing Indebtedness
           incurred to finance all or any part of the purchase price or cost of
           construction or improvement of property, plant or equipment subject
           thereto and such Lien is created prior to, at the time of or within
           12 months after the later of the acquisition, the completion of
           construction or the commencement of full operation of such property,
           plant or equipment or to refinance any such Indebtedness previously
           so secured;

       (b) the principal amount of the Indebtedness secured by such Lien does
           not exceed 100% of such cost; and

       (c) any such Lien shall not extend to or cover any property or assets
           other than such item of property or assets and any improvements on
           such item;

    (8) Liens to secure any Capital Lease Obligation or operating lease;

    (9) Liens encumbering customary initial deposits and margin deposits;

    (10) Liens securing Indebtedness under Hedging Obligations;

    (11) Liens arising out of conditional sale, title retention, consignment or
       similar arrangements for the sale of goods entered into by OI Group or
       any of its Restricted Subsidiaries in the ordinary course of business of
       OI Group and its Restricted Subsidiaries;

                                      114

    (12) Liens on or sales of receivables and customary cash reserves
       established in connection therewith;

    (13) Liens securing OI Group's or any of its Restricted Subsidiaries'
       obligations in respect of bankers' acceptances issued or created to
       facilitate the purchase, shipment or storage of inventory or other goods;
       and

    (14) Liens for taxes, assessments or governmental charges or claims that are
       not yet delinquent or that are being contested in good faith by
       appropriate proceedings promptly instituted and diligently concluded,
       PROVIDED that any reserve or other appropriate provision as shall be
       required in conformity with GAAP shall have been made therefor.

    "PERMITTED OI INC. DEBT OBLIGATIONS" means Obligations with respect to the
OI Inc. Senior Notes and any refinancings of the $300.0 million aggregate
principal amount of 7.85% Senior Notes due 2004, the $350.0 million aggregate
principal amount of 7.15% Senior Notes due 2005 of OI Inc., the $300.0 million
aggregate principal amount of 8.10% Senior Notes due 2007, the $250.0 million
aggregate principal amount of 7.35% Senior Notes due 2008 and the
$250.0 million aggregate principal amount of 7.50% Senior Debentures due 2010,
and the Existing IRBs and up to an additional $50.0 million of IRB financing.

    "PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of OI Group or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund such
other Indebtedness of OI Group or any of its Restricted Subsidiaries (other than
Intercompany Indebtedness); PROVIDED that:

    (1) the principal amount (or accreted value, if applicable) of such
       Permitted Refinancing Indebtedness does not exceed the principal or
       commitment amount (or accreted value, if applicable) of the Indebtedness
       so extended, refinanced, renewed, replaced, defeased or refunded (plus
       all accrued interest thereon and the amount of any premiums necessary to
       accomplish such refinancing and such expenses incurred in connection
       therewith);

    (2) such Permitted Refinancing Indebtedness has a final maturity date later
       than the final maturity date of, and has a Weighted Average Life to
       Maturity equal to or greater than the Weighted Average Life to Maturity
       of, the Indebtedness being extended, refinanced, renewed, replaced,
       defeased or refunded; and

    (3) if the Indebtedness being extended, refinanced, renewed, replaced,
       defeased or refunded is subordinated in right of payment to the notes,
       such Permitted Refinancing Indebtedness has a final maturity date later
       than the final maturity date of, and is subordinated in right of payment
       to, the notes on terms at least as favorable to the Holders of notes as
       those contained in the documentation governing the Indebtedness being
       extended, refinanced, renewed, replaced, defeased or refunded.

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

    "PLEDGE AGREEMENT" means the Pledge Agreement, dated as of April 23, 2001,
between OI Group, OI Packaging, and Bankers Trust Company, as Collateral Agent,
as amended, amended and restated or otherwise modified from time to time.

    "PRINCIPALS" means KKR and its Affiliates.

    "RATING AGENCY" means any of:

    (1) S&P;

    (2) Moody's; or

                                      115

    (3) if S&P or Moody's or both shall not make a rating of the notes publicly
       available, a security rating agency or agencies, as the case may be,
       nationally recognized in the United States, selected by the Company,
       which shall be substituted for S&P or Moody's or both, as the case may
       be, and, in each case, any successors thereto.

    "RELATED PARTY" means:

    (1) any controlling stockholder, partner, member, 80% (or more) owned
       Subsidiary, or immediate family member (in the case of an individual) of
       any Principal; or

    (2) any trust, corporation, partnership or other entity, the beneficiaries,
       stockholders, partners, owners or Persons beneficially holding an 80% or
       more controlling interest of which consist of any one or more Principals
       and/or such other Persons referred to in the immediately preceding
       clause (1).

    "RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.

    "RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.

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

    "SECURITY AGREEMENT" means the Security Agreement, dated as of April 23,
2001, entered into by and among OI Group, each of the direct and indirect
subsidiaries of OI Group signatory thereto, each additional grantor that may
become a party thereof, and Bankers Trust Company, as Collateral Agent, as
amended, amended and restated, or otherwise modified from time to time.

    "SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary of OI Group that
would be a "significant subsidiary" as defined in Article I, Rule 1-02 of
Regulation S-X promulgated pursuant to the Securities Act, as such Regulation is
in effect as of the date of the Indenture.

    "STATED MATURITY" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

    "SUBSIDIARY" means, with respect to any specified Person:

    (1) any corporation, association or other business entity of which more than
       50% of the total voting power of shares of Capital Stock entitled
       (without regard to the occurrence of any contingency) to vote in the
       election of directors, managers or trustees thereof is at the time owned
       or controlled, directly or indirectly, by such Person or one or more of
       the other Subsidiaries of that Person (or a combination thereof); and

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

    "TANGIBLE ASSETS" means the total consolidated assets, LESS goodwill and
intangibles, of OI Group and its Restricted Subsidiaries, as shown on the most
recent balance sheet of OI Group.

    "UNRESTRICTED SUBSIDIARY" means any Subsidiary of OI Group that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary:

    (1) has no Indebtedness other than Non-Recourse Debt;

                                      116

    (2) is not party to any agreement, contract, arrangement or understanding
       with OI Group or any Restricted Subsidiary of OI Group unless the terms
       of any such agreement, contract, arrangement or understanding are no less
       favorable to OI Group or such Restricted Subsidiary than those that might
       be obtained at the time from Persons who are not Affiliates of OI Group;

    (3) is a Person with respect to which neither OI Group nor any of its
       Restricted Subsidiaries has any direct or indirect obligation (a) to
       subscribe for additional Equity Interests or (b) to maintain or preserve
       such Person's financial condition or to cause such Person to achieve any
       specified levels of operating results;

    (4) has not guaranteed or otherwise directly or indirectly provided credit
       support for any Indebtedness of OI Group or any of its Restricted
       Subsidiaries; and

    (5) has at least one director on its Board of Directors that is not a
       director or executive officer of OI Group or any of its Restricted
       Subsidiaries and has at least one executive officer that is not a
       director or executive officer of OI Group or any of its Restricted
       Subsidiaries.

    Any designation of a Restricted Subsidiary of OI Group as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by the covenant described above under the
caption "--Certain Covenants--Restricted Payments." If, at any time, any
Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary
shall be deemed to be incurred by a Restricted Subsidiary of OI Group as of such
date and, if such Indebtedness is not permitted to be incurred as of such date
under the covenant described under the caption "--Certain Covenants--Incurrence
of Indebtedness and Issuance of Preferred Stock," OI Group shall be in default
of such covenant.

    "VOTING STOCK" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.

    "WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing:

    (1) the sum of the products obtained by multiplying (a) the amount of each
       then remaining installment, sinking fund, serial maturity or other
       required payments of principal, including payment at final maturity, in
       respect thereof, by (b) the number of years (calculated to the nearest
       one-twelfth) that will elapse between such date and the making of such
       payment; by

    (2) the then outstanding principal amount of such Indebtedness.

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

                                      117

                 CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

    The following is a summary of the material United States federal income tax
considerations relating to the exchange your private notes for exchange notes in
the exchange offer, but does not purport to be a complete analysis of all the
potential tax considerations relating thereto. This summary is based on laws,
regulations, rulings and decisions now in effect, all of which are subject to
change or differing interpretation possibly with retroactive effect. We have not
sought any ruling from the Internal Revenue Service or an opinion of counsel
with respect to the statements made and the conclusions reached in the following
summary, and there can be no assurance that the Internal Revenue Service will
agree with such statements and conclusions.

    This discussion only applies to you if you exchange your private notes for
exchange notes in the exchange offer. This discussion also does not address the
tax considerations arising under the laws of any foreign, state or local
jurisdiction. In addition, this discussion does not address all tax
considerations applicable to your particular circumstances or if you are subject
to special tax rules, including, without limitation, if you are:

    - a bank;

    - a holder subject to the alternative minimum tax;

    - a tax-exempt organization;

    - an insurance company;

    - a foreign person or entity;

    - a dealer in securities or currencies;

    - a person that will hold notes as a position in a hedging transaction,
      "straddle" or "conversion transaction" for tax purposes; or

    - a person deemed to sell notes under the constructive sale provisions of
      the Internal Revenue Code.

    YOU ARE URGED TO CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE APPLICATION OF
THE UNITED STATES FEDERAL INCOME TAX LAWS TO YOUR PARTICULAR SITUATION AS WELL
AS ANY TAX CONSEQUENCES ARISING UNDER THE FEDERAL ESTATE OR GIFT TAX RULES OR
UNDER THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER TAXING JURISDICTION OR
UNDER ANY APPLICABLE TAX TREATY.

    The exchange of private notes for exchange notes will be treated as a
"non-event" for federal income tax purposes because the exchange notes will not
be considered to differ materially in kind or extent from the private notes. As
a result, no material federal income tax consequences will result to you from
exchanging private notes for exchange notes.

                              PLAN OF DISTRIBUTION

    Each broker-dealer that receives exchange notes for its own account pursuant
to the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of the exchange notes. Broker-dealers may use this
prospectus, as it may be amended or supplemented from time to time, in
connection with the resale of exchange notes received in exchange for private
notes where the broker-dealer acquired the private notes as a result of
market-making activities or other trading activities. We have agreed that for a
period of up to 90 days after the date that this registration statement is
declared effective by the SEC, we will make this prospectus, as amended or
supplemented, available to any broker-dealer that requests it in the letter of
transmittal for use in connection with any such resale.

                                      118

    We will not receive any proceeds from any sale of exchange notes by
broker-dealers or any other persons. Broker-dealers may sell exchange notes
received by broker-dealers for their own account pursuant to the exchange offer
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the exchange notes or
a combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to the prevailing market prices or negotiated
prices. Broker-dealers may resell exchange notes directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from any broker-dealer and/or the purchasers of the
exchange notes. Any broker-dealer that resells exchange notes that were received
by it for its own account pursuant to the exchange offer and any broker or
dealer that participates in a distribution of the exchange notes may be deemed
to be "underwriters" within the meaning of the Securities Act and any profit on
any resale of exchange notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The letter of transmittal states that by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.

    We have agreed to pay all expenses incident to our performance of, or
compliance with, the registration rights agreement and will indemnify you
against liabilities under the Securities Act.

    By its acceptance of the exchange offer, any broker-dealer that receives
exchange notes pursuant to the exchange offer agrees to notify us before using
the prospectus in connection with the sale or transfer of exchange notes. The
broker-dealer further acknowledges and agrees that, upon receipt of notice from
us of the happening of any event which makes any statement in the prospectus
untrue in any material respect or which requires the making of any changes in
the prospectus to make the statements in the prospectus not misleading or which
may impose upon us disclosure obligations that my have a material adverse effect
on us, which notice we agree to deliver promptly to the broker-dealer, the
broker-dealer will suspend use of the prospectus until we have notified the
broker-dealer that delivery of the prospectus may resume and have furnished
copies of any amendment or supplement to the prospectus to the broker-dealer.

                                      119

                                 LEGAL MATTERS

    Certain legal matters with regard to the validity of the notes will be
passed upon for us and the guarantors by Latham & Watkins, San Francisco,
California. Certain partners and former partners of Latham & Watkins, members of
their families and related persons indirectly own less than 1% of the
outstanding shares of common stock of OI Inc.

                                    EXPERTS

    The consolidated financial statements of Owens-Illinois Group, Inc.,
Owens-Brockway Packaging Inc., Owens-Brockway Glass Container Inc., and OI
Plastic Products FTS Inc., at December 31, 2001 and 2000 and for each of the
three years in the period ended December 31, 2001 and the financial statement
schedule of Owens-Illinois Group, Inc., all appearing in this Prospectus and
Registration Statement, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon appearing elsewhere herein, and
are included in reliance upon such reports given on the authority of such firm
as experts in accounting and auditing.

                      WHERE YOU CAN FIND MORE INFORMATION

    This prospectus is part of a registration statement on Form S-4 that we have
filed with the SEC under the Securities Act. This prospectus does not contain
all of the information set forth in the registration statement. For further
information about us and the notes, you should refer to the registration
statement. This prospectus summarizes material provisions of contracts and other
documents to which we refer you. Since this prospectus may not contain all of
the information that you may find important, you should review the full text of
these documents. We have filed these documents as exhibits to our registration
statement.

    In connection with the exchange offer, OI Group will become subject to the
informational reporting requirements of the Securities Exchange Act of 1934, as
amended, and will file reports and other information with the SEC. You may read
and copy any reports and information statements and other information OI Group
files at the public reference facilities of the SEC, Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain copies of those
materials from the SEC by mail at prescribed rates. You should direct requests
to the SEC "s Public Reference Section, Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. In addition, the SEC maintains a website
(www.sec.gov) that contains the reports and other information filed by OI Group.
In addition, for so long as any of the notes remains outstanding, we have agreed
to make available to any prospective purchaser of the notes or beneficial owner
of the notes in connection with any sale thereof the information required by
Rule 144A(d)(4) under the Securities Act.

                                      120

                         INDEX TO FINANCIAL STATEMENTS
                           OWENS-ILLINOIS GROUP, INC.



                                                                    PAGE
                                                                  --------
                                                               
CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Auditors..............................         F-2
Consolidated Results of Operations for the years ended
  December 31, 2001, 2000 and 1999..........................         F-3
Consolidated Balance Sheets at December 31, 2001 and 2000...         F-4
Consolidated Share Owner's Equity for the years ended
  December 31, 2001, 2000 and 1999..........................         F-6
Consolidated Cash Flows for the years ended December 31,
  2001, 2000 and 1999.......................................         F-7
Statement of Significant Accounting Policies................         F-8
Financial Review............................................        F-11
Financial Statement Schedule II--Valuation and Qualifying
  Accounts..................................................        F-34

SUBSIDIARY FINANCIAL STATEMENTS
Owens-Brockway Packaging, Inc...............................        F-36
Owens-Brockway Glass Container Inc..........................        F-59
OI Plastic Products FTS Inc.................................        F-82


                                      F-1

                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Share Owner
Owens-Illinois Group, Inc.

    We have audited the accompanying consolidated balance sheets of
Owens-Illinois Group, Inc. as of December 31, 2001 and 2000, and the related
consolidated statements of results of operations, share owner's equity, and cash
flows for each of the three years in the period ended December 31, 2001. Our
audits also included the financial statement schedule listed in the Index to
Financial Statements. These financial statements and schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Owens-Illinois
Group, Inc. at December 31, 2001 and 2000, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles generally accepted
in the United States. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.

                                          Ernst & Young LLP

Toledo, Ohio
January 24, 2002

                                      F-2

                           OWENS-ILLINOIS GROUP, INC.
                       CONSOLIDATED RESULTS OF OPERATIONS
                             (MILLIONS OF DOLLARS)



                                                                 YEARS ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Revenues:
  Net sales.................................................  $5,402.5   $5,552.1   $5,522.9
  Royalties and net technical assistance....................      24.6       25.3       30.3
  Equity earnings...........................................      19.4       19.8       22.3
  Interest..................................................      26.9       32.5       28.5
  Other.....................................................     539.9      185.1      182.7
                                                              --------   --------   --------
                                                               6,013.3    5,814.8    5,786.7

Costs and expenses:
  Manufacturing, shipping and delivery......................   4,218.4    4,359.1    4,296.4
  Research and development..................................      41.2       46.7       37.5
  Engineering...............................................      31.4       31.3       42.2
  Selling and administrative................................     341.3      285.1      295.6
  Interest..................................................     434.0      486.7      425.9
  Other.....................................................     279.8      447.5      191.3
                                                              --------   --------   --------
                                                               5,346.1    5,656.4    5,288.9
                                                              --------   --------   --------
Earnings before items below.................................     667.2      158.4      497.8
Provision for income taxes..................................     286.4       64.1      185.5
Minority share owners' interests in earnings of
  subsidiaries..............................................      20.1       22.0       13.2
                                                              --------   --------   --------

Earnings before extraordinary items.........................     360.7       72.3      299.1
Extraordinary charges from early extinguishment of debt, net
  of applicable income taxes................................      (4.1)                 (0.8)
                                                              --------   --------   --------
Net earnings................................................  $  356.6   $   72.3   $  298.3
                                                              ========   ========   ========


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-3

                           OWENS-ILLINOIS GROUP, INC.
                          CONSOLIDATED BALANCE SHEETS
                             (MILLIONS OF DOLLARS)



                                                                  DECEMBER 31,
                                                              --------------------
                                                                2001       2000
                                                              --------   ---------
                                                                   
ASSETS
CURRENT ASSETS:
  Cash, including time deposits of $33.7 ($61.2 in 2000)....  $  155.6   $   229.7
  Short-term investments....................................      16.4        19.7
  Receivables, less allowances of $71.1 ($69.9 in 2000).....     754.5       770.9
  Inventories...............................................     836.7       862.4
  Prepaid expenses..........................................     147.0       136.0
                                                              --------   ---------
  Total current assets......................................   1,910.2     2,018.7

OTHER ASSETS:
  Equity investments........................................     166.1       181.4
  Repair parts inventories..................................     199.2       232.0
  Prepaid pension...........................................     879.5       770.9
  Deposits, receivables and other assets....................     582.4       490.6
  Excess of purchase cost over net assets acquired, net of
    accumulated amortization of $690.0 ($597.7 in 2000).....   2,995.3     3,101.0
                                                              --------   ---------
  Total other assets........................................   4,822.5     4,775.9

PROPERTY, PLANT, AND EQUIPMENT:
  Land, at cost.............................................     168.8       165.1
  Buildings and equipment, at cost:
    Buildings and building equipment........................     792.5       817.1
    Factory machinery and equipment.........................   4,368.9     4,301.0
    Transportation, office and miscellaneous equipment......     135.7       134.5
    Construction in progress................................     330.3       244.7
                                                              --------   ---------
                                                               5,796.2     5,662.4
  Less accumulated depreciation.............................   2,536.3     2,377.5
  Net property, plant, and equipment........................   3,259.9     3,284.9
                                                              --------   ---------
Total assets................................................  $9,992.6   $10,079.5
                                                              ========   =========


                                      F-4

                           OWENS-ILLINOIS GROUP, INC.
                    CONSOLIDATED BALANCE SHEETS (CONTINUED)
                             (MILLIONS OF DOLLARS)



                                                                  DECEMBER 31,
                                                              --------------------
                                                                2001       2000
                                                              --------   ---------
                                                                   
LIABILITIES AND SHARE OWNER'S EQUITY
CURRENT LIABILITIES:
  Short-term loans..........................................  $   40.4   $    89.2
  Accounts payable..........................................     457.4       522.7
  Salaries and wages........................................     116.1        83.8
  U.S. and foreign income taxes.............................      12.4        21.4
  Other accrued liabilities.................................     354.4       390.1
  Long-term debt due within one year........................      30.8        30.8
                                                              --------   ---------
    Total current liabilities...............................   1,011.5     1,138.0
LONG-TERM DEBT..............................................   5,329.7     5,729.8
DEFERRED TAXES..............................................     479.8       275.6
NONPENSION POSTRETIREMENT BENEFITS..........................     303.4       296.1
OTHER LIABILITIES...........................................     386.9       360.5
COMMITMENTS AND CONTINGENCIES
MINORITY SHARE OWNERS' INTERESTS............................     159.3       172.9
SHARE OWNER'S EQUITY:
  Common Stock, par value $.01 per share, 1,000 shares
    authorized, 100 shares issued and outstanding...........        --          --
  Other contributed capital.................................   1,735.1     1,806.4
  Retained earnings.........................................   1,163.2       806.6
  Accumulated other comprehensive income (loss).............    (576.3)     (506.4)
                                                              --------   ---------

    Total share owner's equity..............................   2,322.0     2,106.6
                                                              --------   ---------

Total liabilities and share owner's equity..................  $9,992.6   $10,079.5
                                                              ========   =========


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-5

                           OWENS-ILLINOIS GROUP, INC.
                       CONSOLIDATED SHARE OWNER'S EQUITY
                             (MILLIONS OF DOLLARS)



                                                                 YEARS ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
OTHER CONTRIBUTED CAPITAL
  Balance at beginning of year..............................  $1,806.4   $1,937.6   $2,253.1
  Net investment by (distribution to) OI Inc................     (71.3)    (131.2)    (315.5)
                                                              --------   --------   --------
    Balance at end of year..................................   1,735.1    1,806.4    1,937.6
                                                              ========   ========   ========

RETAINED EARNINGS
  Balance at beginning of year..............................     806.6      757.6      459.3
  Net earnings..............................................     356.6       72.3      298.3
  Net loss for the month ended December 31, 2000 for the
    change in the fiscal year end of certain international
    affiliates..............................................                (23.3)
                                                              --------   --------   --------
    Balance at end of year..................................   1,163.2      806.6      757.6
                                                              ========   ========   ========

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
  Balance at beginning of year..............................    (506.4)    (368.6)    (190.7)
  Foreign currency translation adjustments..................     (67.4)    (137.8)    (177.9)
  Change in fair value of certain derivative instruments....      (2.5)
                                                              --------   --------   --------
    Balance at end of year..................................    (576.3)    (506.4)    (368.6)
                                                              ========   ========   ========
Total share owner's equity..................................  $2,322.0   $2,106.6   $2,326.6
                                                              ========   ========   ========

TOTAL COMPREHENSIVE INCOME (LOSS)
  Net earnings..............................................  $  356.6   $   72.3   $  298.3
  Foreign currency translation adjustments..................     (67.4)    (137.8)    (177.9)
  Change in fair value of certain derivative instruments....      (2.5)
                                                              --------   --------   --------
    Total...................................................  $  286.7   $  (65.5)  $  120.4
                                                              ========   ========   ========


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-6

                           OWENS-ILLINOIS GROUP, INC.
                            CONSOLIDATED CASH FLOWS
                             (MILLIONS OF DOLLARS)



                                                                 YEARS ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
OPERATING ACTIVITIES:
  Earnings before extraordinary items.......................  $  360.7    $ 72.3     $299.1
  Non-cash charges (credits):
    Depreciation............................................     403.2     412.6      403.7
    Amortization of deferred costs..........................     140.5     136.9      141.6
    Deferred tax provision (credit).........................     227.3     (35.8)     110.8
    Restructuring costs, writeoffs of certain assets and
      settlement of environmental litigation................     129.4     248.3       20.8
    Gains on asset sales....................................    (439.4)               (40.8)
    Other...................................................    (112.3)   (104.9)     (69.8)
  Change in non-current operating assets....................       8.0     (43.0)     (47.1)
  Change in non-current liabilities.........................     (30.0)    (28.4)     (18.6)
  Change in components of working capital...................     (67.1)   (116.3)    (122.4)
                                                              --------    ------     ------
    Cash provided by operating activities...................     620.3     541.7      677.3
INVESTING ACTIVITIES:
  Additions to property, plant and equipment................    (531.9)   (481.4)    (650.4)
  Acquisitions, net of cash acquired........................    (184.6)    (77.1)     (34.0)
  Net cash proceeds from divestitures and other.............     605.3      94.4      337.1
                                                              --------    ------     ------
    Cash utilized in investing activities...................    (111.2)   (464.1)    (347.3)
FINANCING ACTIVITIES:
  Additions to long-term debt...............................   3,899.8     182.9      117.5
  Repayments of long-term debt..............................  (1,382.6)   (377.5)    (377.3)
  Increase (decrease) in short-term loans...................     (44.4)    (43.8)     (19.6)
  Net change in payable to parent...........................  (2,857.0)    297.6      309.7
  Investment by (distribution to) parent....................    (106.5)   (213.0)    (356.8)
  Collateral deposits for certain derivatives...............     (26.1)
  Payment of finance fees and debt retirement costs.........     (62.1)                (1.0)
                                                              --------    ------     ------
    Cash utilized in financing activities...................    (578.9)   (153.8)    (327.5)
    Effect of exchange rate fluctuations on cash............      (4.3)     15.6      (16.8)
    Effect of change in fiscal year end for certain
      international affiliates..............................                33.2
                                                              --------    ------     ------
Decrease in cash............................................     (74.1)    (27.4)     (14.3)
Cash at beginning of period.................................     229.7     257.1      271.4
                                                              --------    ------     ------
Cash at end of period.......................................  $  155.6    $229.7     $257.1
                                                              --------    ------     ------


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-7

                  STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

    BASIS OF CONSOLIDATED STATEMENTS.  The consolidated financial statements of
Owens-Illinois Group, Inc. ("Company") include the accounts of its subsidiaries.
Newly acquired subsidiaries have been included in the consolidated financial
statements from dates of acquisition. Prior to December 2000, substantially all
of the Company's consolidated foreign subsidiaries reported their results of
operations on a one-month lag, which allowed additional time to compile their
results. Beginning in December 2000, the one-month lag was eliminated. As a
result, the December 2000 results of operations for these subsidiaries, which
amounted to a net loss of $23.3 million, was recorded directly to retained
earnings in December 2000.

    The Company uses the equity method of accounting for investments in which it
has a significant ownership interest, generally 20% to 50%. Other investments
are accounted for at cost.

    RELATIONSHIP WITH OWENS-ILLINOIS INC.  The Company is a wholly-owned
subsidiary of Owens-Illinois, Inc. ("OI Inc."). Although OI Inc. does not
conduct any operations, it has substantial obligations related to outstanding
indebtedness, dividends for preferred stock and asbestos-related payments.
OI Inc. relies primarily on distributions from the Company to meet these
obligations.

    For federal and certain state income tax purposes, the taxable income of the
Company is included in the consolidated tax returns of OI Inc. and income taxes
are allocated to the Company on a basis consistent with separate returns.
Current income taxes are recorded by the Company on a basis consistent with
separate returns.

    NATURE OF OPERATIONS.  The Company is a leading manufacturer of glass
containers and plastics packaging products operating in two product segments.
The Company's principal product lines in the Glass Containers product segment
are glass containers for the food and beverage industries. Sales of the Glass
Containers product segment were 66% of the Company's 2001 consolidated sales.
The Company has glass container operations located in 19 countries, while the
plastics packaging products operations are located in 10 countries. The
principal markets and operations for the Company's glass products are in North
America, Europe, South America and Australia. The Company's principal product
lines in the Plastics Packaging product segment include plastic containers,
closures and plastic prescription containers. Major markets for the Company's
plastics packaging products include the United States household products,
personal care products, health care products, and food and beverage industries.

    USE OF ESTIMATES.  The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires
management of the Company to make estimates and assumptions that affect certain
amounts reported in the financial statements and accompanying notes. Actual
results may differ from those estimates, at which time the Company would revise
its estimates accordingly.

    CASH.  The Company defines "cash" as cash and time deposits with maturities
of three months or less when purchased.

    FAIR VALUES OF FINANCIAL INSTRUMENTS.  The carrying amounts reported for
cash, short-term investments and short-term loans approximate fair value. In
addition, carrying amounts approximate fair value for certain long-term debt
obligations subject to frequently redetermined interest rates. The Company has
guaranteed, on a subordinated basis, OI Inc.'s public debt securities. Fair
values of such securities are generally based on public market quotations.
Derivative financial instruments are included on the balance sheet at fair
value.

                                      F-8

    INVENTORY VALUATION.  The Company values most U.S. inventories at the lower
of last-in, first-out (LIFO) cost or market. Other inventories are valued at the
lower of standard costs (which approximate average costs) or market.

    EXCESS OF PURCHASE COST OVER NET ASSETS ACQUIRED.  Through December 31,
2001, the excess of purchase cost over net assets acquired was being amortized
over 40 years. The Company evaluated the recoverability of long-lived assets
based on undiscounted projected cash flows, excluding interest and taxes, when
factors indicated that an impairment may have existed. (See "New Accounting
Standards").

    PROPERTY, PLANT, AND EQUIPMENT.  In general, depreciation is computed using
the straight-line method. Renewals and improvements are capitalized. Maintenance
and repairs are expensed as incurred.

    REVENUE RECOGNITION.  The Company recognizes sales, net of estimated
discounts and allowances, when title to products is transferred to customers.
Shipping and handling costs are included with manufacturing, shipping, and
delivery costs.

    INCOME TAXES ON UNDISTRIBUTED EARNINGS.  In general, the Company plans to
continue to reinvest the undistributed earnings of foreign subsidiaries and
foreign corporate joint ventures accounted for by the equity method.
Accordingly, taxes are provided only on that amount of undistributed earnings in
excess of planned reinvestments.

    FOREIGN CURRENCY TRANSLATION.  The assets and liabilities of most affiliates
and associates are translated at current exchange rates and any related
translation adjustments are recorded directly in share owner's equity. For the
years ended December 31, 2001, 2000 and 1999, the Company's affiliates located
in Venezuela operated in a "highly inflationary" economy. As such, certain
assets of these affiliates were translated at historical exchange rates and all
translation adjustments are reflected in the statements of Consolidated Results
of Operations. During 2002, the affiliates in Venezuela will no longer be
considered operating in a "highly inflationary" economy. Assets and liabilities
will be translated at current exchange rates with any related translation
adjustments being recorded directly to share owners' equity.

    NEW ACCOUNTING STANDARDS.  In July 2001, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 141, "Business
Combinations" which is effective for business combinations completed after
June 30, 2001. Also in July 2001, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" ("FAS No. 142"), which is effective for goodwill acquired
after June 30, 2001. For goodwill acquired prior to June 30, 2001, FAS No. 142
will be effective for fiscal years beginning after December 15, 2001. Under FAS
No. 142, goodwill and intangible assets with indefinite lives will no longer be
amortized but will be reviewed annually (or more frequently if impairment
indicators arise) for impairment.

    The Company estimates that adopting FAS No. 142 will increase 2002 earnings
before the effects of the accounting change by approximately $90 million
compared to 2001 results. The Company has not completed its assessment of the
effects that adopting FAS No. 142 will have on the reported value of goodwill,
however, the Company expects that it will record an impairment charge in 2002 in
connection with adopting FAS No. 142.

    In October 2001, the Financial Accounting Standards Board ("FASB") issued
Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets" ("FAS No. 144"). FAS No. 144 supersedes FASB Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of" ("FAS No. 121"). FAS No. 144 provides additional guidance on
estimating cash flows when performing a recoverability test, requires that a
long-lived asset (group) to be disposed of other than by sale (e.g. abandoned)
be classified as "held and used" until it is disposed

                                      F-9

of, and establishes more restrictive criteria to classify an asset (group) as
"held for sale," however, it retains the fundamental provisions of FAS No. 121
related to the recognition and measurement of the impairment of long-lived
assets to be "held and used." FAS No. 144 is effective for fiscal years
beginning after December 15, 2001 and transition is prospective for committed
disposal activities that are initiated after the effective date of FAS
No. 144's initial application. The impact of adopting FAS No. 144 on the
Company's reporting and disclosure is not expected to be material to the
Company's financial position or results of operations.

                                      F-10

                                FINANCIAL REVIEW
                      TABULAR DATA IN MILLIONS OF DOLLARS.

    CHANGES IN COMPONENTS OF WORKING CAPITAL RELATED TO OPERATIONS.  Changes in
the components of working capital related to operations (net of the effects
related to acquisitions and divestitures) were as follows (certain amounts from
prior year have been reclassified to conform to current presentation):



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Decrease (increase) in current assets:
  Short-term investments....................................   $  3.2    $  10.4    $ (14.9)
  Receivables...............................................     (0.2)     (43.9)     (50.2)
  Inventories...............................................     43.2      (50.9)     (46.9)
  Prepaid expenses..........................................      3.4        0.8        4.4
Increase (decrease) in current liabilities:
  Accounts payable..........................................    (36.1)        .7       (7.0)
  Accrued liabilities.......................................    (54.7)     (47.8)     (22.2)
  Salaries and wages........................................     12.6       (5.0)       3.2
  U.S. and foreign income taxes.............................    (38.5)      19.4       11.2
                                                               ------    -------    -------
                                                               $(67.1)   $(116.3)   $(122.4)
                                                               ======    =======    =======


    INVENTORIES.  Major classes of inventory are as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Finished goods..............................................   $641.8     $651.9
Work in process.............................................      6.2       11.7
Raw materials...............................................    125.3      130.6
Operating supplies..........................................     63.4       68.2
                                                               ------     ------
                                                               $836.7     $862.4
                                                               ======     ======


    If the inventories which are valued on the LIFO method had been valued at
standard costs, which approximate current costs, consolidated inventories would
be higher than reported by $19.9 million and $23.0 million at December 31, 2001
and 2000, respectively.

    Inventories which are valued at the lower of standard costs (which
approximate average costs) or market at December 31, 2001 and 2000 were
approximately $501.7 million and $455.4 million, respectively.

                                      F-11

    EQUITY INVESTMENTS.  Summarized information pertaining to the Company's
equity associates follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
At end of year:
  Equity in undistributed earnings:
    Foreign.................................................   $ 90.0     $ 89.3
    Domestic................................................     21.6       19.0
                                                               ------     ------
      Total.................................................   $111.6     $108.3
                                                               ======     ======
  Equity in cumulative translation adjustment...............   $(54.2)    $(46.7)
                                                               ======     ======




                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
For the year:
  Equity in earnings:
    Foreign.................................................   $ 7.8      $ 5.8      $ 9.5
    Domestic................................................    11.6       14.0       12.8
                                                               -----      -----      -----
      Total.................................................   $19.4      $19.8      $22.3
                                                               =====      =====      =====
  Dividends received........................................   $18.2      $14.5      $10.1
                                                               =====      =====      =====


    LONG-TERM DEBT.  The following table summarizes the long-term debt of the
Company at December 31, 2001 and 2000:



                                                                2001       2000
                                                              --------   --------
                                                                   
Secured Credit Agreement:
  Revolving Credit Facility.................................  $2,410.4
  Term Loan.................................................   1,045.0
Second Amended and Restated Credit Agreement:
  Revolving Credit Facility:
    Offshore Loans:
      Australian Dollars
        1.39 billion........................................             $  775.3
      British Pounds
        125.0 million.......................................                186.8
      Italian Lira
        18.0 billion........................................                  8.7
Payable to OI Inc...........................................   1,700.0    4,557.0
Other.......................................................     205.1      232.8
                                                              --------   --------
                                                               5,360.5    5,760.6
                                                              --------   --------
  Less amounts due within one year..........................      30.8       30.8
                                                              --------   --------
    Long-term debt..........................................  $5,329.7   $5,729.8
                                                              ========   ========


    In April 2001, certain of the Company's subsidiaries (the "Borrowers")
entered into the Secured Credit Agreement (the "Agreement") with a group of
banks, which expires on March 31, 2004. The Agreement provides for a
$3.0 billion revolving credit facility (the "Revolving Credit Facility") and a
$1.5 billion term loan (the "Term Loan"). The Agreement includes an Overdraft
Account Facility providing for aggregate borrowings up to $50 million which
reduce the amount available for borrowing under the Revolving Credit Facility.
The Agreement also provides for the issuance of letters of credit

                                      F-12

totaling up to $500 million, which also reduce the amount available for
borrowings under the Revolving Credit Facility. At December 31, 2001, the
Company had unused credit of $491.4 million available under the Secured Credit
Agreement.

    Prior to April 2001, the Company's significant bank financing was provided
under OI Inc.'s April 1998 Second Amended and Restated Credit Agreement. The
Second Amended and Restated Credit Agreement provided for a $4.5 billion
Revolving Credit Facility, which included a $1.75 billion fronted offshore loan
revolving facility denominated in certain foreign currencies, subject to certain
sublimits, available to certain of the Company's foreign subsidiaries.
Borrowings under the Secured Credit Agreement were used to repay all amounts
outstanding under, and terminate, the Second Amended and Restated Credit
Agreement through the payment of amounts owed to OI Inc.

    The interest rate on borrowings under the Revolving Credit Facility is, at
the Borrower's option, the Base Rate or a reserve adjusted Eurodollar rate. The
interest rate on borrowings under the Revolving Credit Facility also includes a
margin linked to OI Inc.'s Consolidated Leverage Ratio, as defined in the
Agreement. The margin is limited to ranges of 1.75% to 2.00% for Eurodollar
loans and .75% to 1.00% for Base Rate loans. The interest rate on Overdraft
Account loans is the Base Rate minus .50%. The weighted average interest rate on
borrowings outstanding under the Revolving Credit Facility at December 31, 2001
was 4.14%. While no compensating balances are required by the Agreement, the
Borrowers must pay a facility fee on the Revolving Credit Facility commitments
of .50%.

    The interest rate on borrowings under the Term Loan is, at the Borrowers'
option, the Base Rate or a reserve adjusted Eurodollar rate. The interest rate
on borrowings under the Term Loan also includes a margin of 2.50% for Eurodollar
loans and 1.50% for Base Rate loans. The weighted average interest rate on
borrowings outstanding under the Term Loan at December 31, 2001 was 4.50%.

    Borrowings under the Agreement are secured by substantially all of the
assets of the Company's domestic subsidiaries and certain foreign subsidiaries
which have a book value of approximately $3.5 billion. Borrowings under the
Agreement are also secured by a pledge of intercompany debt and equity in most
of the Company's domestic subsidiaries and certain stock of certain foreign
subsidiaries.

    The Agreement contains covenants and provisions that, among other things,
restrict the ability of the Company and its subsidiaries to dispose of assets,
incur additional indebtedness, prepay other indebtedness or amend certain debt
instruments, pay dividends. create liens on assets, enter into contingent
obligations, enter into sale and leaseback transactions, make investments, loans
or advances, make acquisitions, engage in mergers or consolidations, change the
business conducted by the Company, engage in certain transactions with
affiliates and otherwise restrict certain corporate activities. In addition, the
Agreement contains financial covenants that require the Company and its
subsidiaries to maintain, based upon the financial statements of OI Inc. and its
subsidiaries on a consolidated basis, specified financial ratios and tests,
including minimum fixed charge coverage ratios, maximum leverage ratios, minimum
net worth and specified capital expenditures tests.

    During January 2002, a subsidiary of the Company completed a $1.0 billion
private placement of senior secured notes. The notes bear interest at 8 7/8% and
are due February 15, 2009. The notes are guaranteed by the Company and
substantially all of its domestic subsidiaries. The assets of substantially all
of the Company's domestic subsidiaries are pledged as security for the notes.
The issuing subsidiary used the net cash proceeds from the notes to reduce the
outstanding term loan under the Agreement by $980.0 million. As such, the
Company wrote off unamortized deferred financing fees in January 2002 related to
the term loan and recorded an extraordinary charge totaling $10.9 million less
applicable income taxes of $4.2 million. The indenture for the notes restricts
among other things, the ability of the Company's subsidiaries to borrow money,
pay dividends on, or redeem or repurchase stock, make investments, create liens,
enter into certain transactions with affiliates and sell certain assets or merge
with or into other companies.

                                      F-13

    Amounts payable to OI Inc. above equal OI Inc.'s total indebtedness.
Interest costs on amounts payable to OI Inc. are charged to the Company in the
same amount as incurred by OI Inc. On June 26, 2001, OI Inc. sought and received
consent from the holders of a majority of the principal amount of each of its
six series of senior notes and debentures to amend the indenture governing those
securities. The amendments implement a previously announced offer by the Company
and a principal subsidiary of the Company to guarantee the senior notes and
debentures on a subordinated basis. The fair value of the OI Inc. debt being
guaranteed by the Company at December 31, 2001 was $1,545.1 million.

    Annual maturities for all of the Company's long-term debt through 2006 are
as follows: 2002, $30.8 million; 2003, $43.4 million; 2004, $2,807.4 million;
2005, $421.1 million; and 2006, $5.2 million. These maturities reflect the
issuance of the senior secured notes in January 2002 as noted above.

    Including interest paid by OI Inc., interest paid in cash aggregated
$424.7 million, $467.6 million, and $388.1 million for the years ended
December 31, 2001, 2000, and 1999, respectively.

    OPERATING LEASES.  Rent expense attributable to all operating leases was
$95.0 million in 2001, $77.8 million in 2000, and $73.7 million in 1999. Minimum
future rentals under operating leases are as follows: 2002, $62.0 million; 2003,
$50.6 million; 2004, $37.9 million; 2005, $31.6 million; 2006, $25.5 million;
and 2007 and thereafter, $35.5 million.

    FOREIGN CURRENCY TRANSLATION.  Aggregate foreign currency exchange gains
(losses) included in other costs and expenses were $2.6 million in 2001, $(1.0)
million in 2000 and $4.9 million in 1999.

    DERIVATIVE INSTRUMENTS.  The terms of OI Inc.'s former bank credit agreement
provided for foreign currency borrowings by certain of its international
affiliates. Such borrowings provided a natural hedge against a portion of the
Company's investment. Under the April 2001 Secured Credit Agreement,
international affiliates are only permitted to borrow in U.S. dollars. The
Company's affiliates in Australia and the United Kingdom have entered into
currency swaps covering their initial borrowings under the Agreement. These
swaps are being used to manage the affiliates exposure to fluctuating foreign
exchange rates by swapping the principal and interest payments due under the
Secured Credit Agreement.

    As of December 31, 2001, the Company's affiliate in Australia has swapped
$650.0 million of borrowings into $1,275.0 million of Australian dollars. This
swap matures on March 31, 2003, with interest resets every 90 days. The interest
reset terms of the swap approximate the terms of the U.S. dollar borrowings.
This derivative instrument swaps both the interest and principal from U.S.
dollars to Australian dollars and also swaps the interest rate from a U.S. based
rate to an Australian based rate. The Company's affiliate in the United Kingdom
has swapped $200.0 million of borrowings into 139.0 million British pounds. This
swap also matures on March 31, 2003, with interest resets every 90 days. This
derivative instrument swaps both the interest and principal from U.S. dollars to
British pounds and also swaps the interest rate from a U.S. based rate to a
British based rate.

    On October 1, 2001, the Company completed the acquisition of the Canadian
glass container assets of Consumers Packaging Inc. for a purchase price of
approximately $150 million. The Company financed this purchase through
borrowings under the Secured Credit Agreement, which were transferred to Canada
through intercompany loans in U.S. dollars. The Company's affiliate in Canada
has entered into swap transactions to manage the affiliate's exposure to
fluctuating foreign exchange rates by swapping the principal and interest
portion of the intercompany loan. At December 31, 2001, the Canadian affiliate
has swapped $90.0 million of borrowings into $142.0 million Canadian dollars.
This swap matures on October 1, 2003. This derivative instrument swaps both the
interest and principal from U.S. dollars to Canadian dollars and also swaps the
interest rate from a U.S. based rate to a Canadian based rate. The affiliate has
also entered into a forward hedge related to the fourth quarter interest
receivable and payable related to the previous swap. The affiliate has also
entered in forward

                                      F-14

hedges which effectively swap $10 million of borrowings into $16 million
Canadian dollars. These hedges swap both the interest and principal from U.S.
dollars to Canadian dollars and mature monthly.

    The Company recognizes the above derivatives on the balance sheet at fair
value. The Company accounts for the above swaps as fair value hedges. As such,
the changes in the value of the swaps are included in other expense and are
expected to substantially offset any exchange rate gains or losses on the
related U.S. dollar borrowings. For the year ended December 31, 2001, the amount
not offset was immaterial.

    The Company also uses commodity futures contracts related to forecasted
future natural gas requirements. The objective of these futures contracts is to
limit the fluctuations in prices paid and the potential volatility in earnings
or cash flows from future price movements. During 2001, the Company entered into
commodity futures contracts for approximately 75% of its domestic natural gas
usage (approximately 1.2 billion BTUs) through March, 2002.

    The Company accounts for the above futures contracts on the balance sheet at
fair value. The effective portion of changes in the fair value of a derivative
that is designated as and meets the required criteria for a cash flow hedge are
recorded in accumulated other comprehensive income ("OCI") and reclassified into
earnings in the same period or periods during which the underlying hedged item
affects earnings. The ineffective portion of the change in the fair value of a
derivative designated as a cash flow hedge is recognized in current earnings.

    The above futures contracts are accounted for as cash flow hedges at
December 31, 2001. Hedge accounting is only applied when the derivative is
deemed to be highly effective at offsetting anticipated cash flows of the hedged
transactions. For hedged forecasted transactions, hedge accounting will be
discontinued if the forecasted transaction is no longer probable to occur, and
any previously deferred gains or losses will be recorded to earnings
immediately.

    During 2001, an unrealized net loss of $2.5 million (net of tax) related to
these commodity futures contracts was included in OCI. There was no
ineffectiveness recognized during 2001.

    ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS).  Foreign currency translation
adjustments and changes in certain derivative balances comprise accumulated
other comprehensive income (loss). Changes in accumulated other comprehensive
income (loss) were as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Balance at beginning of year................................  $(506.4)   $(368.6)   $(190.7)
Net effect of exchange rate fluctuations....................    (70.0)    (140.6)    (175.8)
Deferred income taxes.......................................      2.6        2.8       (2.1)
Change in certain derivative balances.......................     (2.5)
                                                              -------    -------    -------
Balance at end of year......................................  $(576.3)   $(506.4)   $(368.6)
                                                              =======    =======    =======


    The net effect of exchange rate fluctuations generally reflects changes in
the relative strength of the U.S. dollar against major foreign currencies
between the beginning and end of the year.

                                      F-15

    INCOME TAXES.  Deferred income taxes reflect: (1) the net tax effects of
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes and
(2) carryovers and credits for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities at December 31, 2001 and 2000
are as follows (certain amounts from prior year have been reclassified to
conform to current year presentation):



                                                                2001       2000
                                                              --------   --------
                                                                   
Deferred tax assets:
  Accrued postretirement benefits...........................  $ 106.2    $ 103.6
  U.S. federal tax loss carryovers..........................     63.5      149.7
  Alternative minimum tax credits...........................     31.5       23.6
  Other.....................................................    253.9      296.3
                                                              -------    -------
    Total deferred tax assets...............................    455.1      573.2
Deferred tax liabilities:
  Property, plant and equipment.............................    317.1      262.8
  Prepaid pension costs.....................................    301.9      254.1
  Inventory.................................................     37.4       42.3
  Other.....................................................    156.8      183.5
                                                              -------    -------
    Total deferred tax liabilities..........................    813.2      742.7
                                                              -------    -------
    Net deferred tax liabilities............................  $(358.1)   $(169.5)
                                                              =======    =======


    Deferred taxes are included in the Consolidated Balance Sheets at
December 31, 2001 and 2000 as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Prepaid expenses............................................  $ 121.7    $ 106.1
Deferred tax liabilities....................................   (479.8)    (275.6)
                                                              -------    -------
Net deferred tax liabilities................................  $(358.1)   $(169.5)
                                                              =======    =======


                                      F-16

    The provision (benefit) for income taxes consists of the following:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Current:
  U.S. Federal..............................................   $ 8.0      $ 0.8      $  3.8
  State.....................................................    19.4        2.1         2.9
  Foreign...................................................    31.7       97.0        68.0
                                                               -----      -----      ------
                                                                59.1       99.9        74.7
                                                               -----      -----      ------
Deferred:
  U.S. Federal..............................................   192.2       16.9       111.1
  State.....................................................     1.2       (9.2)       11.4
  Foreign...................................................    33.9      (43.5)      (11.7)
                                                               -----      -----      ------
                                                               227.3      (35.8)      110.8
                                                               -----      -----      ------
Total:
  U.S. Federal..............................................   200.2       17.7       114.9
  State.....................................................    20.6       (7.1)       14.3
  Foreign...................................................    65.6       53.5        56.3
                                                               -----      -----      ------
                                                               286.4      $64.1      $185.5
                                                               =====      =====      ======


    The provision for income taxes was calculated based on the following
components of earnings (loss) before income taxes:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Domestic....................................................   $516.8     $(16.0)    $320.9
Foreign.....................................................   $150.4      174.4      176.9
                                                               ------     ------     ------
                                                               $667.2     $158.4     $497.8
                                                               ======     ======     ======


    Income taxes paid (received) in cash were as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Domestic....................................................   $ 8.1      $(0.7)     $11.0
Foreign.....................................................    52.1       46.4       51.5
                                                               -----      -----      -----
                                                               $60.2      $45.7      $62.5
                                                               =====      =====      =====


    A reconciliation of the provision for income taxes based on the statutory
U.S. Federal tax rate of 35% to the provision for income taxes is as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Pretax earnings at statutory U.S. Federal tax rate..........   $233.5     $55.4      $174.2
Increase (decrease) in provision for income taxes due to:
  Amortization of goodwill..................................     31.5      32.1        33.1
  State taxes, net of federal benefit.......................     12.7      (4.1)        9.3
  Foreign earnings at different rates.......................     (2.7)     (6.9)       (7.3)
  Adjustment for non-U.S. tax law changes...................      6.0      (9.3)
  Other items...............................................      5.4      (3.1)      (23.8)
                                                               ------     -----      ------
Provision for income taxes..................................   $286.4     $64.1      $185.5
                                                               ======     =====      ======
Effective tax rate..........................................     42.9%     40.4%       37.3%
                                                               ======     =====      ======


                                      F-17

    At December 31, 2001, the Company had unused net operating losses and
research tax credits expiring from 2007 to 2021.

    The Company also has unused alternative minimum tax credits which do not
expire and will be available to offset future U.S. Federal income tax.

    At December 31, 2001, the Company's equity in the undistributed earnings of
foreign subsidiaries for which income taxes had not been provided approximated
$562.6 million. It is not practicable to estimate the U.S. and foreign tax which
would be payable should these earnings be distributed.

    PARTICIPATION IN OI INC. STOCK OPTION PLANS.  The Company participates in
the stock option plans of OI Inc. under which employees of the Company may be
granted options to purchase common shares of OI Inc. No options may be exercised
in whole or in part during the first year after the date granted. In general,
subject to certain accelerated exercisability provisions, 50% of the options
become exercisable on the fifth anniversary of the date of the option grant,
with the remaining 50% becoming exercisable on the sixth anniversary date of the
option grant. In general, options expire following termination of employment or
the day after the tenth anniversary date of the option grant.

    All options have been granted at prices equal to the market price of the
OI Inc.'s common stock on the date granted. Accordingly, the Company recognizes
no compensation expense related to the stock option plans. The Company has
adopted the disclosure-only provisions of Statement of Financial Accounting
Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation." If the
Company had elected to recognize compensation cost based on the fair value of
the options granted at grant date as allowed by SFAS No. 123, pro forma net
income would have been as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Net income:
  As reported...............................................   $356.6     $72.3      $298.3
  Pro forma.................................................    347.7      64.3       291.4


    The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following assumptions:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Expected life of options....................................  5 years    5 years    5 years
Expected stock price volatility.............................     69.8%      62.9%      36.5%
Risk-free interest rate.....................................     4.85%      6.60%      5.10%
Expected dividend yield.....................................     0.00%      0.00%      0.00%


    PENSION BENEFIT PLANS.  Net credits to results of operations for all of the
Company's pension plans and certain deferred compensation arrangements amounted
to $83.4 million in 2001, $88.6 million in 2000 and $58.6 million in 1999.

    On October 1, 2001, the Company completed the acquisition of the Canadian
glass container assets of Consumers Packaging Inc. As part of the transaction,
the Company assumed certain of the pension liabilities of Consumers Packaging.
The information below includes the activity of these pension plans from
October 1, 2001 through December 31, 2001.

    The Company has pension plans covering substantially all employees located
in the U.S., the United Kingdom, Australia and Canada. Benefits generally are
based on compensation for salaried employees and on length of service for hourly
employees. The Company's policy is to fund pension plans such that sufficient
assets will be available to meet future benefit requirements. The following
tables relate to the Company's principal U.S., United Kingdom, Australian and
Canadian pension plans.

                                      F-18

    The changes in the pension benefit obligations for the year were as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Obligations at beginning of year............................  $2,388.8   $2,286.5
Change in benefit obligations:
  Service cost..............................................      36.6       36.6
  Interest cost.............................................     169.3      168.8
  Actuarial loss (gain).....................................     (52.0)     182.7
  Special separation program benefits.......................                 92.2
  Acquisitions..............................................     179.2
  Benefit payments..........................................    (218.9)    (348.1)
  Other.....................................................      17.6      (29.9)
                                                              --------   --------
    Net increase in benefit obligations.....................     131.8      102.3
                                                              --------   --------
Obligations at end of year..................................  $2,520.6   $2,388.8
                                                              ========   ========


    The changes in the fair value of the pension plans' assets for the year were
as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Fair value at beginning of year.............................  $2,948.7   $3,712.4
Change in fair value:
  Actual return (loss) on plan assets.......................    (120.6)    (362.9)
  Benefit payments..........................................    (218.9)    (348.1)
  Transfer of assets to a special trust to fund qualified
    current retiree health liabilities......................                (38.5)
  Acquisitions..............................................     119.9
  Other.....................................................      14.9      (14.2)
                                                              --------   --------
    Net decrease in fair value of assets....................    (204.7)    (763.7)
                                                              --------   --------
Fair value at end of year...................................  $2,744.0   $2,948.7
                                                              ========   ========


    The funded status of the pension plans at year end was as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Plan assets at fair value...................................  $2,744.0   $2,948.7
Projected benefit obligations...............................   2,520.6    2,388.8
                                                              --------   --------
  Plan assets in excess of projected benefit obligations....     223.4      559.9

Net unrecognized items:
  Actuarial loss............................................     552.2      170.0
  Prior service cost........................................      49.4       41.0
                                                              --------   --------
                                                                 601.6      211.0
                                                              --------   --------
Net prepaid pension.........................................  $  825.0   $  770.9
                                                              ========   ========


                                      F-19

    The net prepaid pension is included in the Consolidated Balance Sheets at
December 31, 2001 and 2000 as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Prepaid pension.............................................   $879.5     $770.9
Other liabilities...........................................    (54.5)
                                                               ------     ------
                                                               $825.0     $770.9
                                                               ======     ======


    The components of the net pension credit for the year were as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Service cost................................................   $ 36.6    $  36.6     $ 41.8
Interest cost...............................................    169.3      168.8      155.2
Expected asset return.......................................   (311.0)    (318.5)    (280.6)
Amortization:
  Prior service cost........................................      7.6        7.9        8.1
  (Gain) loss...............................................      0.5       (0.2)       1.1
                                                               ------    -------     ------
    Net amortization........................................      8.1        7.7        9.2
                                                               ------    -------     ------
Net credit..................................................   $(97.0)   $(105.4)    $(74.4)
                                                               ======    =======     ======


    The following selected information is for plans with benefit obligations in
excess of the fair value of plan assets:



                                                                2001
                                                              --------
                                                           
Benefit obligations at the end of the year..................   $484.7
Fair value of plan assets at the end of the year............    411.8
                                                               ======


    The following information is for plans with accumulated benefit obligations
in excess of the fair value of plan assets:



                                                                2001
                                                              --------
                                                           
Accumulated benefit obligations at the end of the year......   $145.8
Fair value of plan assets at the end of the year............    131.5
                                                               ======


    The actuarial present value of benefit obligations is based on a weighted
discount rate of approximately 7.00% for 2001 and 2000. Future benefits are
assumed to increase in a manner consistent with past experience of the plans,
which, to the extent benefits are based on compensation, includes assumed salary
increases on a weighted scale of approximately 4.75% for 2001 and 2000. The
expected weighted long-term rate of return on assets was approximately 10.00%
for 2001 and 2000, and 9.50% for 1999. Amortization included in net pension
credits is based on the average remaining service of employees. Plan assets
include marketable equity securities (which at December 31, 2001 and 2000
included 14,423,621 shares of OI Inc.'s common stock), government and corporate
debt securities, real estate and commingled funds.

    The Company also sponsors several defined contribution plans for all
salaried and hourly U.S. employees. Participation is voluntary and participants'
contributions are based on their compensation. The Company matches substantially
all plan participants' contributions up to various limits. Company contributions
to these plans amounted to $9.2 million in 2001, $10.2 million in 2000 and
$10.5 million in 1999.

                                      F-20

    POSTRETIREMENT BENEFITS OTHER THAN PENSIONS.  The Company provides certain
retiree health care and life insurance benefits covering substantially all U.S.
salaried and certain hourly employees. Employees are generally eligible for
benefits upon retirement and completion of a specified number of years of
creditable service.

    On October 1, 2001, the Company completed the acquisition of the Canadian
glass container assets of Consumers Packaging Inc. The information below
includes the activity of the related Canadian retiree health care plan from
October 1, 2001 through December 31, 2001.

    The changes in the postretirement benefit obligations for the year were as
follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Obligations at beginning of year............................   $279.5     $267.5
Change in benefit obligations:
  Service cost..............................................      1.8        1.6
  Interest cost.............................................     20.5       20.4
  Actuarial loss............................................     22.1       15.2
  Curtailments..............................................                 5.8
  Special separation program termination benefits...........                 2.0
  Acquisition...............................................     31.3
  Benefit payments..........................................    (34.0)     (33.0)
                                                               ------     ------
    Net change in benefit obligations.......................     41.7       12.0
                                                               ------     ------
Obligations at end of year..................................   $321.2     $279.5
                                                               ======     ======


    The funded status of the postretirement benefit plans at year end was as
follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Accumulated postretirement benefit obligations..............   $321.2     $279.5
Net unrecognized items:
  Prior service cost........................................     30.6       43.6
  Actuarial loss............................................    (48.4)     (27.0)
                                                               ------     ------
                                                                (17.8)      16.6
                                                               ------     ------
Nonpension postretirement benefit obligations...............   $303.4     $296.1
                                                               ======     ======


    The components of the net postretirement benefit cost for the year were as
follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Service cost................................................   $ 1.8      $ 1.6      $ 2.3
Interest cost...............................................    20.5       20.5       19.1
Amortization:
  Prior service cost (credit)...............................   (13.0)     (13.6)     (13.7)
  (Gain) loss...............................................     0.8       (0.1)       1.9
                                                               -----      -----      -----
    Net amortization........................................   (12.2)     (13.7)     (11.8)
                                                               -----      -----      -----
Net postretirement benefit cost.............................   $10.1      $ 8.4      $ 9.6
                                                               =====      =====      =====


    Assumed health care cost inflation was based on a weighted average rate of
6.25% in 2001, declining to ultimate rate of 6.00%. A one percentage point
decrease in the rate would have decreased the accumulated postretirement benefit
obligation at December 31, 2001 by $12.2 million and decreased the net
postretirement benefit cost for 2001 by $0.9 million. A one percentage point
increase in the rate would have increased the accumulated postretirement benefit
obligation at December 31, 2001 by

                                      F-21

$14.5 million and increased the net postretirement benefit cost for 2001 by
$1.0 million. The assumed weighted average discount rates used in determining
the accumulated postretirement benefit obligation were 7.25% and 7.50% at
December 31, 2001 and 2000, respectively. Amortization included in net
postretirement benefit cost is based on the average remaining service of
employees.

    Benefits provided by the Company for certain of the hourly retirees are
determined by collective bargaining. Most other domestic hourly retirees receive
health and life insurance benefits from a multi-employer trust established by
collective bargaining. Payments to the trust as required by the bargaining
agreements are based upon specified amounts per hour worked and were
$6.3 million in 2001, $7.5 million in 2000, and $8.0 million in 1999.
Postretirement health and life benefits for retirees of foreign affiliates are
generally provided through the national health care programs of the countries in
which the affiliates are located.

    OTHER REVENUE.  Other revenue for 2001 includes a gain of $457.3 million
related to the sale of the Company's Harbor Capital Advisors business and gains
totaling $13.1 million related to the sale of the Company's label business and
the sale of a minerals business in Australia. Other revenue for the year ended
December 31, 1999 includes gains totaling $40.8 million related to the sales of
a U.S. glass container plant and a mold manufacturing business in Colombia.

    OTHER COSTS AND EXPENSES.  Other costs and expenses for the year ended
December 31, 2001 include pretax charges of $129.5 million related to the
following: (1) net charges of $82.1 million consisting of $87.3 million for a
restructuring program and impairment at certain of the Company's international
and domestic operations offset by a $5.2 million reversal of a prior charge. The
charges include the impairment of assets at the Company's affiliate in Puerto
Rico and the consolidation of manufacturing capacity and the closing of a
facility in Venezuela. The program also includes consolidation of capacity at
certain other international and domestic facilities in response to decisions
about pricing and market strategy; (2) a charge of $31.0 million related to the
loss on the sale of the Company's facilities in India; (3) a charge of
$8.5 million for certain contingencies; and (4) a charge of $7.9 million related
to restructuring manufacturing capacity in the medical devices business. The
Company expects its actions related to the restructuring and impairment charges
to be completed during the next several quarters.

    Other costs and expenses for the year ended December 31, 2000 include
$248.3 million principally related to a restructuring and capacity realignment
program. The restructuring and capacity realignment program, initiated in the
third quarter of 2000, includes the consolidation of manufacturing capacity and
a reduction of 350 employees in the U.S. salaried work force, or about 10%,
principally as a result of early retirement incentives. Also included in the
program are a write-down of plant and equipment for the Company's glass
container affiliate in India and certain other asset write-offs. Manufacturing
capacity consolidations principally involve U.S. glass container facilities and
reflect technology-driven improvements in productivity, conversions from some
juice and similar products to plastic containers, Company and customer decisions
regarding pricing and volume and the further concentration of production in the
most strategically-located facilities. The Company expects that it will continue
to make cash payments over the next several quarters for benefits and on-going
closing costs related to the closing of these facilities.

    As a result of a 10% reduction of the U.S. salaried workforce in 2000, the
Company recognized a settlement gain of approximately $40 million related to its
defined benefit pension plan. This gain has been included in the net charge of
$52.4 million for retirement incentives and special termination benefits.

    The 2000 pretax charge of $40.0 million was related to the write-down of
property, plant and equipment in India. Based on the Company's expectation of
future net cash flows of its affiliate in India, the related property, plant,
and equipment was written down to realizable values in accordance

                                      F-22

with Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."

    Selected information relating to the restructuring accruals follows:



                                               EARLY RETIREMENT       WRITE-DOWN OF        OTHER,
                                                INCENTIVES AND      IMPAIRED PROPERTY,   PRINCIPALLY
                                 CAPACITY     SPECIAL TERMINATION       PLANT AND         SOFTWARE
                                REALIGNMENT        BENEFITS             EQUIPMENT         WRITE-OFF     TOTAL
                                -----------   -------------------   ------------------   -----------   --------
                                                                                        
2000 restructuring charges        $  122.4           $  52.4              $ 40.0           $ 33.5      $  248.3
Write-down of assets to net
  realizable value............       (49.0)                                (40.0)           (31.5)       (120.5)
Reduction of prepaid pension
  asset.......................       (13.6)            (45.8)                                             (59.4)
Increase in nonpension
  postretirement benefit
  liability...................        (0.6)             (5.4)                                              (6.0)
Net cash paid.................        (1.5)             (0.4)                                              (1.9)
                                  --------           -------              ------           ------      --------
Remaining liabilities at
  December 31, 2000...........        57.7               0.8                  --              2.0          60.5
Restructuring program and
  impairment..................        45.6                                  41.7                           87.3
Reversal of second quarter
  restructuring charge........        (5.2)                                                                (5.2)
Medical Devices
  restructuring...............         7.9                                                                  7.9
Write-down of assets to net
  realizable value............       (43.8)                                (41.7)                         (85.5)
Net cash paid.................       (24.7)             (0.8)                                             (25.5)
                                  --------           -------              ------           ------      --------
Remaining liabilities at
  December 31, 2001...........    $   37.5           $    --              $   --           $  2.0      $   39.5
                                  ========           =======              ======           ======      ========


    Capacity realignment includes charges for plant closings, severance
benefits, and write-downs of assets for disposal or abandonment as a result of
restructuring of manufacturing capacity. Write-downs of assets represent the
majority of charges for 2001.

    Other costs and expenses for the year ended December 31, 1999 include
charges totaling $20.8 million related principally to restructuring costs and
write-offs of certain assets in Europe and South America.

                                      F-23

    EXTRAORDINARY CHARGES FROM EARLY EXTINGUISHMENT OF DEBT.  During 2001, the
Company wrote off unamortized deferred financing fees related to indebtedness
repaid prior to its scheduled maturity. As a result, the Company recorded
extraordinary charges totaling $6.6 million less applicable income taxes of
$2.5 million. During 1999, OI Inc. incurred redemption premiums and wrote off
unamortized deferred financing fees related to indebtedness repaid prior to its
scheduled maturity. As a result, the Company was allocated extraordinary charges
totaling $1.2 million less applicable income taxes of $0.4 million.

    CONTINGENCIES.  The Company's parent, OI Inc., is one of a number of
defendants (typically from 20 to 100 or more) in a substantial number of
lawsuits filed in numerous state and federal courts by persons alleging bodily
injury (including death) as a result of exposure to dust from asbestos fibers.
OI Inc. relies primarily on distributions from the Company to fund its indemnity
payments and legal fees related to these lawsuits.

    From 1948 to 1958, one of OI Inc.'s former business units commercially
produced and sold approximately $40 million of a high-temperature,
calcium-silicate based pipe and block insulation material containing asbestos.
OI Inc. exited the pipe and block insulation business in April 1958. The
traditional asbestos personal injury lawsuits and claims relating to such
production and sale of asbestos material typically allege various theories of
liability, including negligence, gross negligence and strict liability and seek
compensatory and punitive damages in various amounts (herein referred to as
"asbestos claims").

    The following table shows the approximate number of plaintiffs and claimants
involved in asbestos claims pending at the beginning of, disposed of and filed
during, and pending at the end of, each of the years listed (eliminating
duplicate filings):



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Pending at beginning of year................................   20,000     17,000     15,000
Disposed....................................................   24,000     17,000     10,000
Filed.......................................................   31,000     20,000     12,000
                                                               ------     ------     ------
Pending at end of year......................................   27,000     20,000     17,000
                                                               ======     ======     ======


    Additionally, OI Inc. has claims-handling agreements in place with many
plaintiff's counsel throughout the country. These agreements require evaluation
and negotiation regarding whether particular claimants qualify under the
criteria established by such agreements. The criteria for such claims include
verification of a compensable illness and a reasonable probability of exposure
to a product manufactured by OI Inc.'s former business unit during its
manufacturing period ending in 1958. OI Inc. believes that the bankruptcies of
additional co-defendants, as discussed below, have resulted in an acceleration
of the presentation and disposition of a number of claims under such agreements,
which claims would otherwise have been presented and disposed of over the next
several years. This acceleration is reflected in an increased number of pending
asbestos claims and, to the extent disposed, contributes to an increase in
asbestos-related payments which is expected to continue in the near term.

    Since receiving its first asbestos claim, OI Inc., as of December 31, 2001,
has disposed of the asbestos claims of approximately 264,000 plaintiffs and
claimants at an average indemnity payment per claim of approximately $5,300.
Certain of these dispositions have included deferred payment amounts payable
over periods ranging from one to seven years. Deferred payments at December 31,
2001 totaled $37 million and are included in the foregoing average indemnity
payment per claim. OI Inc.'s indemnity payments for these claims have varied on
a per claim basis, and are expected to continue to vary considerably over time.

    OI Inc. believes that its ultimate asbestos-related contingent liability
(i.e., its indemnity or other claim disposition costs plus related legal fees)
cannot be estimated with certainty. In 1993, OI Inc. established a liability of
$975 million to cover indemnity payments and legal fees associated with the

                                      F-24

resolution of outstanding and expected future asbestos lawsuits and claims. In
1998, an additional liability of $250 million was established. During the third
quarter of 2000, OI Inc. established an additional liability of $550 million to
cover OI Inc.'s estimated indemnity payments and legal fees arising from
outstanding asbestos personal injury lawsuits and claims and asbestos personal
injury lawsuits and claims filed in the ensuing several years. OI Inc.'s ability
to reasonably estimate its liability has been significantly affected by the
volatility of asbestos-related litigation in the United States, the expanding
list of non-traditional defendants that have been sued in this litigation and
found liable for substantial damage awards, the continued use of litigation
screenings to generate new lawsuits, the large number of claims asserted or
filed by parties who claim prior exposure to asbestos materials but have no
present physical impairment as a result of such exposure, and the growing number
of co-defendants that have filed for bankruptcy. Since the beginning of 2000, A.
P. Green Industries, Inc., Armstrong World Industries, Babcock & Wilcox,
Federal-Mogul Corporation, Fibreboard Corporation, G-I Holdings (GAF),
Harbison-Walker Refractories Group, Kaiser Aluminum Corporation, North American
Refractories Co., Owens Corning, Pittsburgh-Corning, Plibrico Company, Porter
Hayden Company, USG Corporation, W. R. Grace & Co. and several other smaller
companies have sought protection under Chapter 11 of the Bankruptcy Code.

    OI Inc. has continued to monitor trends which may affect its ultimate
liability and has continued to analyze the developments and variables affecting
or likely to affect the resolution of pending and future asbestos claims against
OI Inc. OI Inc. expects that the gross amount of total asbestos-related payments
will be moderately lower in 2002 compared to payments of $245.9 million in 2001
and will continue to decline thereafter as the number of potential claimants
continues to decrease. However, the trend toward lower aggregate annual payments
has not occurred as soon as had been anticipated when the additional liability
was established in 2000. In addition, the number of claims and lawsuits filed
against OI Inc. has exceed the number anticipated at that time. As a result,
OI Inc. is continuing to evaluate trends to determine whether further adjustment
of the asbestos-related liabilities is appropriate. While the results of this
review cannot be estimated at this time, OI Inc. expects that an increase of the
liability will be required in order to cover estimated indemnity payments and
legal fees arising from asbestos personal injury lawsuits and claims filed in
the next several years. Subject to the completion of this review, based on all
the factors and matters relating to OI Inc.'s asbestos-related lawsuits and
claims, OI Inc. presently believes that the ultimate resolution of its
asbestos-related costs and liabilities will not have a material effect on
OI Inc.'s financial condition.

    Various litigation is pending against the Company, in many cases involving
ordinary and routine claims incidental to the business of the Company and in
others presenting allegations that are nonroutine and involve compensatory,
punitive or treble damage claims as a well as other types of relief. The
ultimate legal and financial liability of the Company in respect to such pending
litigation and the ultimate amount of distributions which may be required to be
made by the Company and other subsidiaries of OI, Inc. to fund OI Inc.'s
asbestos-related payments cannot be estimated with certainty. However, the
Company believes, based on its examination and review of such matters and
experience to date and subject to the matters discussed above, that such
ultimate liability will not be material in relation to the Company's
Consolidated Financial Statements.

    SEGMENT INFORMATION.  The Company operates in the rigid packaging industry.
The Company has two reportable product segments within the rigid packaging
industry: (1) Glass Containers and (2) Plastics Packaging. The Glass Containers
segment includes operations in North America, Europe, the Asia Pacific region,
and South America. The Plastics Packaging segment consists of two business
units--consumer products (plastic containers and closures) and prescription
products. The Other segment consists primarily of the Company's labels and
carriers products business unit, substantially all of which was divested in
early 2001.

    The Company evaluates performance and allocates resources based on earnings
before interest income, interest expense, provision for income taxes, minority
share owners' interests in earnings of

                                      F-25

subsidiaries, and extraordinary charges (collectively "EBIT") excluding unusual
items. EBIT for product segments includes an allocation of corporate expenses
based on both a percentage of sales and direct billings based on the costs of
specific services provided. For the Company's U.S. pension plans, net periodic
pension cost (credit) has been allocated to product segments while the related
prepaid pension asset is included in the caption "Eliminations and Other
Retained." Net sales as shown in the geographic segment information are based on
the location of the Company's affiliate which recorded the sales.

    Financial information regarding the Company's product segments is as follows
(certain prior year amounts have been reclassified in order to conform to
current year presentation):



                                                                                         ELIMINATIONS
                                                                                          AND OTHER
                                       GLASS      PLASTICS               TOTAL PRODUCT     RETAINED     CONSOLIDATED
                                     CONTAINERS   PACKAGING    OTHER       SEGMENTS         ITEMS          TOTALS
                                     ----------   ---------   --------   -------------   ------------   ------------
                                                                                      
Net sales:
  2001                               $ 3,571.2    $1,817.5    $   13.8     $ 5,402.5                      $5,402.5
  2000                                 3,695.6     1,787.6        68.9       5,552.1                       5,552.1
  1999                                 3,762.6     1,686.7        73.6       5,522.9                       5,522.9
                                     =========    ========    ========     =========       ========       ========
EBIT, excluding unusual items:
  2001                               $   582.5    $  247.9    $   (8.2)    $   822.2       $  (57.9)      $  764.3
  2000                                   587.2       249.2         1.1         837.5           23.4          860.9
  1999                                   582.4       277.7         9.2         869.3            5.9          875.2
                                     =========    ========    ========     =========       ========       ========
Unusual items:
  2001:
    Gain on the sale of a minerals
      business in Australia........  $    10.3                             $    10.3                      $   10.3
    Gain on the sale of the
      Company's label business.....                           $    2.8           2.8                           2.8
    Gain on the sale of the
      Company's Harbor Capital
      business.....................                                                        $  457.3          457.3
    Restructuring and impairment
      charges......................      (64.3)      (17.8)                    (82.1)                        (82.1)
    Loss on the sale of the
      Company's facilities in
      India........................      (31.0)                                (31.0)                        (31.0)
    Special employee benefit
      programs.....................       (7.6)       (3.5)                    (11.1)         (19.8)         (30.9)
    Charges related to certain
      contingencies................                   (8.5)                     (8.5)                         (8.5)
    Restructuring manufacturing
      capacity in the medical
      devices business.............                               (7.9)         (7.9)                         (7.9)


                                      F-26




                                                                                         ELIMINATIONS
                                                                                          AND OTHER
                                       GLASS      PLASTICS               TOTAL PRODUCT     RETAINED     CONSOLIDATED
                                     CONTAINERS   PACKAGING    OTHER       SEGMENTS         ITEMS          TOTALS
                                     ----------   ---------   --------   -------------   ------------   ------------
                                                                                      
Unusual items (continued):
  2000:
    Charges related to
      consolidation of
      manufacturing capacity.......  $  (120.4)   $   (2.0)                $  (122.4)                     $ (122.4)
    Charges related to early
      retirement incentives and
      special termination
      benefits.....................      (22.0)       (9.2)                    (31.2)      $  (21.2)         (52.4)
    Charges related to impairment
      of property, plant and
      equipment in India...........      (40.0)                                (40.0)                        (40.0)
    Other charges, principally
      related to the write-off of
      software.....................       (3.6)                                 (3.6)         (29.9)         (33.5)
  1999:
    Gains related to the sales of
      two manufacturing
      facilities...................       40.8                                  40.8                          40.8
    Charges related principally to
      restructuring costs and
      write-offs of certain assets
      in Europe and South
      America......................      (20.8)                                (20.8)                        (20.8)
                                     =========    ========    ========     =========       ========       ========
Depreciation and amortization
  expense:
  2001.............................  $   342.8    $  181.8    $    6.0     $   530.6       $   13.1       $  543.7
  2000.............................      346.2       177.3         6.4         529.9           19.6          549.5
  1999.............................      348.8       173.0         6.5         528.3           17.0          545.3
                                     =========    ========    ========     =========       ========       ========
Total assets:
  2001.............................  $ 5,579.5    $3,355.0    $   34.9     $ 8,969.4       $1,023.2       $9,992.6
  2000.............................    5,633.8     3,398.4       117.0       9,149.2          930.3       10,079.5
  1999.............................    6,016.8     3,399.5       109.3       9,525.6          995.6       10,521.2
                                     =========    ========    ========     =========       ========       ========
Capital expenditures (1):
  2001.............................  $   351.3    $  177.2    $    0.5     $   529.0       $    2.9       $  531.9
  2000.............................      290.9       184.9         2.4         478.2            3.2          481.4
  1999.............................      428.4       212.3         3.4         644.1            6.3          650.4
                                     =========    ========    ========     =========       ========       ========


- ------------------------

(1) Excludes property, plant and equipment acquired through acquisitions.

    Financial information regarding the Company's geographic segments is as
follows:



                                                                                             TOTAL
                                                                       ASIA      SOUTH     GEOGRAPHIC
                                          NORTH AMERICA    EUROPE    PACIFIC    AMERICA     SEGMENTS
                                          -------------   --------   --------   --------   ----------
                                                                            
Net sales:
  2001..................................     $3,301.1     $  913.0   $  660.6   $  527.4    $5,402.5
  2000..................................      3,390.5        896.9      760.0      504.7     5,552.1
  1999..................................      3,319.4        968.8      814.9      419.8     5,522.9
                                             ========     ========   ========   ========    ========


                                      F-27




                                                                                             TOTAL
                                                                       ASIA      SOUTH     GEOGRAPHIC
                                          NORTH AMERICA    EUROPE    PACIFIC    AMERICA     SEGMENTS
                                          -------------   --------   --------   --------   ----------
                                                                            
EBIT, excluding unusual items:
  2001..................................     $  535.8     $   91.8   $  102.2   $   92.4    $  822.2
  2000..................................        555.3         81.8      123.9       76.5       837.5
  1999..................................        601.7        101.2      135.1       31.3       869.3
                                             ========     ========   ========   ========    ========
Unusual items:
  2001:
  Gain on the sale of a minerals
    business in Australia...............                             $   10.3               $   10.3
  Gain on the sale of the Company's
    label business......................     $    2.8                                            2.8
  Restructuring and impairment
    charges.............................        (51.0)    $   (7.1)      (0.8)  $  (23.2)      (82.1)
  Loss on the sale of the Company's
    facilities in India.................                                (31.0)                 (31.0)
  Special employee benefit programs.....         (7.9)        (0.7)      (2.3)      (0.2)      (11.1)
  Charges related to certain
    contingencies.......................         (8.5)                                          (8.5)
  Restructuring manufacturing capacity
    in the medial devices business......         (7.9)                                          (7.9)
  2000:
  Charges related to consolidation of
    manufacturing capacity..............       (126.0)                               3.6      (122.4)
  Charges related to early retirement
    incentives and special termination
    benefits............................        (31.2)                                         (31.2)
  Charges related to impairment of
    property, plant, and equipment in
    India...............................                                (40.0)                 (40.0)
  Other.................................                                            (3.6)       (3.6)
  1999:
  Gains related to the sales of two
    manufacturing facilities............         30.8                               10.0        40.8
  Charges related principally to
    restructuring costs and write-offs
    of certain assets in Europe and
    South America.......................                     (10.8)                (10.0)      (20.8)
                                             ========     ========   ========   ========    ========


    The Company's net fixed assets by geographic segment are as follows:



                                                              UNITED STATES   FOREIGN     TOTAL
                                                              -------------   --------   --------
                                                                                
2001........................................................    $1,688.2      $1,571.7   $3,259.9
2000........................................................     1,721.8       1,563.1    3,284.9
1999........................................................     1,755.0       1,689.1    3,444.1


                                      F-28

    Reconciliations to consolidated totals are as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Revenues:
  Net sales for reportable segments.........................  $5,402.5   $5,552.1   $5,522.9
  Royalties and net technical assistance....................      24.6       25.3       30.3
  Equity earnings...........................................      19.4       19.8       22.3
  Interest income...........................................      26.9       32.5       28.5
  Other revenue.............................................     539.9      185.1      182.7
                                                              --------   --------   --------
    Total...................................................  $6,013.3   $5,814.8   $5,786.7
                                                              ========   ========   ========
Reconciliation of EBIT to earnings before income taxes and
  minority share owners' interests in earnings:
  EBIT, excluding unusual items for reportable segments.....  $  822.2   $  837.5   $  869.3
  Unusual items excluded from reportable segment
    information.............................................    (127.5)    (197.2)      20.0
  Eliminations and other retained, excluding unusual
    items...................................................     (57.9)      23.4        5.9
  Unusual items excluded from eliminations and other
    retained:
    2001:
      Gain on the sale of the Company's Harbor Capital
        Advisors business...................................     457.3
      Special employee benefit programs.....................     (19.8)
    2000:
      Charges related to early retirement incentives and
        special termination benefits........................                (21.2)
      Other, principally software write-off.................                (29.9)
Net interest expense........................................    (407.1)    (454.2)    (397.4)
                                                              --------   --------   --------
Total.......................................................  $  667.2   $  158.4   $  497.8
                                                              ========   ========   ========


    FINANCIAL INFORMATION FOR SUBSIDIARY GUARANTORS AND NON-GUARANTORS.  The
following presents condensed consolidating financial information for the
Company, segregating: (1) Owens-Illinois Group, Inc. (the "Parent");
(2) Owens-Brockway Glass Container Inc. (the "Issuer"); (3) those domestic
subsidiaries which will guarantee the notes (the "Guarantor Subsidiaries"); and
(4) all other subsidiaries (the "Non-Guarantor Subsidiaries"). The Guarantor
Subsidiaries are wholly-owned direct and indirect subsidiaries of the Parent and
their guarantees are full, unconditional and joint and several.

    Subsidiaries of the Parent and of the Issuer are presented on the equity
basis of accounting. Certain reclassifications have been made to conform all of
the financial information to the financial presentation on a consolidated basis.
The principal eliminating entries eliminate investments in subsidiaries and
intercompany balances and transactions.

                                      F-29

    The following information presents consolidating results of operations,
balance sheets and cash flows for the periods and at the dates indicated.



                                                               YEAR ENDED DECEMBER 31, 2001
                                     --------------------------------------------------------------------------------
                                                                               NON-
                                                             GUARANTOR      GUARANTOR
                                      PARENT     ISSUER     SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                     --------   ---------   ------------   ------------   ------------   ------------
                                                                                       
RESULTS OF OPERATIONS
Net sales..........................  $          $ 1,636.6     $1,518.1       $2,330.9      $   (83.1)      $ 5,402.5
Interest...........................                   0.4          2.9           23.6                           26.9
Equity earnings from
  subsidiaries.....................     360.7        31.2         33.6                        (425.5)             --
Other equity earnings..............                  10.9          4.9            3.7           (0.1)           19.4
Other revenue......................                  36.7        513.2           39.0          (24.4)          564.5
                                     --------   ---------     --------       --------      ---------       ---------
  Total revenue....................     360.7     1,715.8      2,072.7        2,397.2         (533.1)        6,013.3
Manufacturing, shipping, and
  delivery.........................               1,297.5      1,168.8        1,858.0         (105.9)        4,218.4
Research, engineering, selling,
  administrative, and other........                 112.0        311.8          268.9            1.0           693.7
Net intercompany interest..........    (199.7)      135.4         57.4            6.9                             --
Other interest expense.............     199.7        70.1         44.2          120.0                          434.0
                                     --------   ---------     --------       --------      ---------       ---------
  Total costs and expense..........        --     1,615.0      1,582.2        2,253.8         (104.9)        5,346.1
Earnings before items below........     360.7       100.8        490.5          143.4         (428.2)          667.2
Provision for income taxes.........                  31.4        200.3           55.7           (1.0)          286.4
Minority share owners' interests in
  earnings of subsidiaries.........                                              22.9           (2.8)           20.1
                                     --------   ---------     --------       --------      ---------       ---------
Earnings before extraordinary
  charge...........................     360.7        69.4        290.2           64.8         (424.4)          360.7
Extraordinary charge...............      (4.1)                    (4.1)                          4.1            (4.1)
                                     --------   ---------     --------       --------      ---------       ---------
Net income (loss)..................  $  356.6   $    69.4     $  286.1       $   64.8      $  (420.3)      $   356.6
                                     ========   =========     ========       ========      =========       =========




                                                               YEAR ENDED DECEMBER 31, 2000
                                     --------------------------------------------------------------------------------
                                                                               NON-
                                                             GUARANTOR      GUARANTOR
                                      PARENT     ISSUER     SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                     --------   ---------   ------------   ------------   ------------   ------------
                                                                                       
RESULTS OF OPERATIONS
Net sales..........................  $          $ 1,762.6     $1,524.9       $2,336.3      $   (71.7)      $ 5,552.1
Interest...........................                   0.5          4.1           27.9                           32.5
Equity earnings from
  subsidiaries.....................      72.3        64.1         20.6                        (157.0)             --
Other equity earnings..............                   9.8          4.3            5.7                           19.8
Other revenue......................                  41.5        152.1           40.0          (23.2)          210.4
                                     --------   ---------     --------       --------      ---------       ---------
  Total revenue....................      72.3     1,878.5      1,706.0        2,409.9         (251.9)        5,814.8
Manufacturing, shipping, and
  delivery.........................               1,408.4      1,164.0        1,880.9          (94.2)        4,359.1
Research, engineering, selling,
  administrative and other.........                 249.8        333.9          226.5            0.4           810.6
Net intercompany interest..........    (352.8)      219.3        126.7            6.8                             --
Other interest expense.............     352.8         0.3          5.7          127.9                          486.7
                                     --------   ---------     --------       --------      ---------       ---------
  Total costs and expenses.........        --     1,877.8      1,630.3        2,242.1          (93.8)        5,656.4
                                     --------   ---------     --------       --------      ---------       ---------
Earnings before items below........      72.3         0.7         75.7          167.8         (158.1)          158.4
Provision for income taxes.........                 (19.3)        22.7           61.0           (0.3)           64.1
Minority share owners' interests in
  earnings of subsidiaries.........                                0.1           22.1           (0.2)           22.0
                                     --------   ---------     --------       --------      ---------       ---------
Net income.........................  $   72.3   $    20.0     $   52.9       $   84.7      $  (157.6)      $    72.3
                                     ========   =========     ========       ========      =========       =========


                                      F-30




                                                                    YEAR ENDED DECEMBER 31, 1999
                                          --------------------------------------------------------------------------------
                                                                                    NON-
                                                                  GUARANTOR      GUARANTOR
                                           PARENT     ISSUER     SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                          --------   ---------   ------------   ------------   ------------   ------------
                                                                                            
RESULTS OF OPERATIONS
Net sales...............................  $          $ 1,814.6     $1,440.1       $2,383.7       $  (115.5)    $ 5,522.9
Interest................................                   0.2          5.5           22.8                          28.5
Equity earnings from subsidiaries.......     299.1        80.8         24.5                         (404.4)           --
Other equity earnings...................                   9.0          3.9            9.4                          22.3
Other revenue...........................                  74.3        126.9           34.0           (22.2)        213.0
                                          --------   ---------     --------       --------       ---------     ---------
  Total revenue.........................     299.1     1,978.9      1,600.9        2,449.9          (542.1)      5,786.7
Manufacturing, shipping, and delivery...               1,437.9      1,039.1        1,954.4          (135.0)      4,296.4
Research, engineering, selling,
  administrative and other..............                 111.6        271.5          183.5                         566.6
Net intercompany interest...............    (285.7)      178.5         98.2            9.0                            --
Other interest expense..................     285.7         0.2          6.4          133.6                         425.9
                                          --------   ---------     --------       --------       ---------     ---------
  Total costs and expenses..............        --     1,728.2      1,415.2        2,280.5          (135.0)      5,288.9
                                          --------   ---------     --------       --------       ---------     ---------
Earnings before items below.............     299.1       250.7        185.7          169.4          (407.1)        497.8
Provision for income taxes..............                  71.0         61.7           53.8            (1.0)        185.5
Minority share owners' interests in
  earnings of subsidiaries..............                                0.1           10.3             2.8          13.2
                                          --------   ---------     --------       --------       ---------     ---------
Earnings before extraordinary charge....     299.1       179.7        123.9          105.3          (408.9)        299.1
Extraordinary charge....................      (0.8)                    (0.8)                           0.8          (0.8)
                                          --------   ---------     --------       --------       ---------     ---------
Net income..............................  $  298.3   $   179.7     $  123.1       $  105.3       $  (408.1)    $   298.3
                                          ========   =========     ========       ========       =========     =========




                                                                         DECEMBER 31, 2001
                                          --------------------------------------------------------------------------------
                                                                                    NON-
                                                                  GUARANTOR      GUARANTOR
                                           PARENT     ISSUER     SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                          --------   ---------   ------------   ------------   ------------   ------------
                                                                                            
BALANCE SHEET
Current assets:
  Accounts receivable...................  $          $   123.7     $  185.8       $  517.0       $   (72.0)    $   754.5
  Inventories...........................                 162.9        212.1          462.5            (0.8)    $   836.7
  Other current assets..................                   1.1        155.2          162.5             0.2     $   319.0
                                          --------   ---------     --------       --------       ---------     ---------
Total current assets....................                 287.7        553.1        1,142.0           (72.6)      1,910.2
Investments in and advances to
  subsidiaries..........................   4,021.9     1,967.5         57.1                       (6,046.5)
Goodwill................................                 554.6      1,447.7          993.0                       2,995.3
Other non-current assets................                 255.0      1,050.0          528.1            (5.9)      1,827.2
                                          --------   ---------     --------       --------       ---------     ---------
Total other assets......................   4,021.9     2,777.1      2,554.8        1,521.1        (6,052.4)      4,822.5
Property, plant and equipment, net......                 600.9      1,105.9        1,553.1                       3,259.9
                                          --------   ---------     --------       --------       ---------     ---------
Total assets............................  $4,021.9   $ 3,665.7     $4,213.8       $4,216.2       $(6,125.0)    $ 9,992.6
                                          ========   =========     ========       ========       =========     =========
Current liabilities:
  Accounts payable and accrued
    liabilities.........................             $   183.9     $  317.0       $  496.6       $   (57.2)    $   940.3
  Short-term loans and long-term debt
    due within one year.................                                4.8           66.4                          71.2
                                          --------   ---------     --------       --------       ---------     ---------
Total current liabilities...............                 183.9        321.8          563.0           (57.2)      1,011.5
Long-term debt..........................   1,700.0     1,661.3        851.3        1,117.1                       5,329.7
Other non-current liabilities and
  minority interests....................                  92.3        746.9          482.4             7.8       1,329.4
Investment by and advances from
  parent................................               1,728.2      2,293.7        2,053.7        (6,075.6)
Share owner's equity....................   2,322.0                                                               2,322.0
                                          --------   ---------     --------       --------       ---------     ---------
Total liabilities and share owner's
  equity................................  $4,022.0   $ 3,665.7     $4,213.7       $4,216.2       $(6,125.0)    $ 9,992.6
                                          ========   =========     ========       ========       =========     =========


                                      F-31




                                                                         DECEMBER 31, 2000
                                          --------------------------------------------------------------------------------
                                                                                    NON-
                                                                  GUARANTOR      GUARANTOR
                                           PARENT     ISSUER     SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                          --------   ---------   ------------   ------------   ------------   ------------
                                                                                            
BALANCE SHEET
Current assets:
  Accounts receivable...................  $          $   148.1     $  197.1       $  472.5       $   (46.8)    $   770.9
  Inventories...........................                 208.3        237.7          417.4            (1.0)        862.4
  Other current assets..................                  25.9        114.7          244.4             0.4         385.4
                                          --------   ---------     --------       --------       ---------     ---------
Total current assets....................        --       382.3        549.5        1,134.3           (47.4)      2,018.7
Investments in and advances to
  subsidiaries..........................   6,663.6     1,925.5         37.7                       (8,626.8)           --
Goodwill................................                 574.9      1,510.2        1,015.9                       3,101.0
Other non-current assets................                 264.5        963.5          450.0            (3.1)      1,674.9
                                          --------   ---------     --------       --------       ---------     ---------
Total other assets......................   6,663.6     2,764.9      2,511.4        1,465.9        (8,629.9)      4,775.9
Property, plant and equipment, net......                 608.3      1,113.2        1,563.4                       3,284.9
                                          --------   ---------     --------       --------       ---------     ---------
Total assets............................  $6,663.6   $ 3,755.5     $4,174.1       $4,163.6       $(8,677.3)    $10,079.5
                                          --------   ---------     --------       --------       ---------     ---------
Current liabilities:
  Accounts payable and accrued
    liabilities.........................  $          $   197.9     $  340.3       $  520.8       $   (41.0)    $ 1,018.0
  Short-term loans and long-term debt
    due within one year.................                                5.0          115.0                         120.0
                                          --------   ---------     --------       --------       ---------     ---------
Total current liabilities...............        --       197.9        345.3          635.8           (41.0)      1,138.0
Long-term debt..........................   4,557.0                      7.3        1,165.5                       5,729.8
Other non-current liabilities and
  minority interests....................                 136.7        578.8          367.6            22.0       1,105.1
Investment by and advances from
  parent................................               3,420.9      3,242.7        1,994.7        (8,658.3)           --
Share owner's equity....................   2,106.6                                                               2,106.6
                                          --------   ---------     --------       --------       ---------     ---------
Total liabilities and share owner's
  equity................................  $6,663.6   $ 3,755.5     $4,174.1       $4,163.6       $(8,677.3)    $10,079.5
                                          ========   =========     ========       ========       =========     =========




                                                                    YEAR ENDED DECEMBER 31, 2001
                                          --------------------------------------------------------------------------------
                                                                                    NON-
                                                                  GUARANTOR      GUARANTOR
                                           PARENT     ISSUER     SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                          --------   ---------   ------------   ------------   ------------   ------------
                                                                                            
CASH FLOWS
Cash provided by (used in) operating
  activities............................  $          $   189.8     $   80.4       $  350.1       $             $  $620.3
Investing Activities:
  Additions to property, plant, and
    equipment...........................                 (68.6)      (156.5)        (306.8)                       (531.9)
  Acquisitions, net of cash acquired....                               (7.6)        (177.0)                       (184.6)
  Proceeds from sales...................                   7.0        525.4           72.9                         605.3
                                          --------   ---------     --------       --------       ---------     ---------
    Cash provided by (used in) investing
      activities........................        --       (61.6)       361.3         (410.9)             --        (111.2)
Financing Activities:
  Net change in payable to OI, Inc......  (2,857.0)                                                             (2,857.0)
  Net investment by (distribution to)
    OI, Inc.............................    (106.5)                                                               (106.5)
  Change in intercompany transactions...   2,963.5    (1,767.1)    (1,271.9)          75.5                            --
  Change in short term debt.............                               (0.3)         (44.1)                        (44.4)
  Payments of long term debt............                 (71.5)      (461.3)        (849.8)                     (1,382.6)
  Borrowings of long term debt..........               1,732.9      1,305.5          861.4                       3,899.8
  Collateral deposits for certain
    derivatives.........................                                             (26.1)                        (26.1)
  Payment of finance fees...............                 (22.5)       (20.1)         (19.5)                        (62.1)
                                          --------   ---------     --------       --------       ---------     ---------
    Cash provided by (used in) financing
      activities........................        --      (128.2)      (448.1)          (2.6)             --        (578.9)
Effect of exchange rate changes on
  cash..................................                                              (4.3)                         (4.3)
                                          --------   ---------     --------       --------       ---------     ---------
Net change in cash......................        --          --         (6.4)         (67.7)             --         (74.1)
Cash at beginning of period.............                    --         28.7          201.0              --         229.7
                                          --------   ---------     --------       --------       ---------     ---------
Cash at end of period...................  $     --   $      --     $   22.3       $  133.3       $      --     $   155.6
                                          ========   =========     ========       ========       =========     =========


                                      F-32




                                                                    YEAR ENDED DECEMBER 31, 2000
                                          --------------------------------------------------------------------------------
                                                                                    NON-
                                                                  GUARANTOR      GUARANTOR
                                           PARENT     ISSUER     SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                          --------   ---------   ------------   ------------   ------------   ------------
                                                                                            
CASH FLOWS
Cash provided by (used in) operating
  activities............................  $          $   (24.7)    $  199.2       $  355.2       $    12.0     $   541.7
Investing Activities:
  Additions to property, plant, and
    equipment...........................                 (72.3)      (175.8)        (233.3)                       (481.4)
  Acquisitions, net of cash acquired....                                             (77.1)                        (77.1)
  Proceeds from sales...................                   1.8         80.3           12.3                          94.4
                                          --------   ---------     --------       --------       ---------     ---------
  Cash provided by (used in) investing
    activities..........................        --       (70.5)       (95.5)        (298.1)             --        (464.1)
Financing Activities:
  Net change in payable to OI Inc.......     297.6                                                                 297.6
  Net investment by (distribution to) OI
    Inc.................................    (213.0)                                                               (213.0)
  Change in intercompany balances.......     (84.6)       95.1       (147.4)         148.9           (12.0)           --
  Change in short term debt.............                                             (43.8)                        (43.8)
  Payments of long term debt............                               (5.6)        (371.9)                       (377.5)
  Borrowings of long term debt..........                                1.5          181.4                         182.9
                                          --------   ---------     --------       --------       ---------     ---------
    Cash provided by (used in) financing
      activities........................        --        95.1       (151.5)         (85.4)          (12.0)       (153.8)
Effect of exchange rate changes on
  cash..................................                                              15.6                          15.6
Effect of change in fiscal year end for
  certain international affiliates......                                              33.2                          33.2
                                          --------   ---------     --------       --------       ---------     ---------
Net change in cash......................        --        (0.1)       (47.8)          20.5              --         (27.4)
Cash at beginning of period.............                   0.1         76.5          180.5                         257.1
                                          --------   ---------     --------       --------       ---------     ---------
Cash at end of period...................  $     --   $      --     $   28.7       $  201.0       $      --     $   229.7
                                          ========   =========     ========       ========       =========     =========




                                                                    YEAR ENDED DECEMBER 31, 1999
                                          --------------------------------------------------------------------------------
                                                                                    NON-
                                                                  GUARANTOR      GUARANTOR
                                           PARENT     ISSUER     SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                          --------   ---------   ------------   ------------   ------------   ------------
                                                                                            
CASH FLOWS
Cash provided by (used in) operating
  activities............................  $          $   132.9     $  257.9       $  313.8       $   (27.3)    $   677.3
Investing Activities:
  Additions to property, plant, and
    equipment...........................                (118.9)      (201.5)        (330.0)                       (650.4)
  Acquisitions, net of cash acquired....                                             (34.0)                        (34.0)
  Proceeds from sales...................                  61.2         14.2          261.7                         337.1
                                          --------   ---------     --------       --------       ---------     ---------
    Cash provided by (used in) investing
      activities........................        --       (57.7)      (187.3)        (102.3)             --        (347.3)
Financing Activities:
  Net change in payable to OI Inc.......     309.7                                                                 309.7
  Net investment by (distribution to) OI
    Inc.................................    (356.8)                                                               (356.8)
  Change in intercompany balances.......      47.1       (75.3)       (59.0)          59.9            27.3            --
  Change in short term debt.............                                             (19.6)                        (19.6)
  Payments of long term debt............                               (4.6)        (372.7)                       (377.3)
  Borrowings of long term debt..........                                1.6          115.9                         117.5
  Payment of finance fees...............                               (1.0)                                        (1.0)
                                          --------   ---------     --------       --------       ---------     ---------
    Cash provided by (used in) financing
      activities........................        --       (75.3)       (63.0)        (216.5)           27.3        (327.5)
Effect of exchange rate changes on
  cash..................................                                             (16.8)                        (16.8)
                                          --------   ---------     --------       --------       ---------     ---------
Net change in cash......................        --        (0.1)         7.6          (21.8)             --         (14.3)
Cash at beginning of period.............       0.2        68.9        202.3          271.4
                                          --------   ---------     --------       --------       ---------     ---------
Cash at end of period...................  $     --   $     0.1     $   76.5       $  180.5       $      --     $   257.1
                                          ========   =========     ========       ========       =========     =========


                                      F-33

                           OWENS-ILLINOIS GROUP, INC.

         SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS (CONSOLIDATED)

                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
                             (MILLIONS OF DOLLARS)

Reserves deducted from assets in the balance sheets:

ALLOWANCES FOR LOSSES AND DISCOUNTS ON RECEIVABLES



                                                              ADDITIONS
                                        BALANCE AT   ---------------------------
                                        BEGINNING    CHARGED TO COSTS    OTHER     DEDUCTIONS    BALANCE AT
                                        OF PERIOD      AND EXPENSES     (NOTE 2)    (NOTE 1)    END OF PERIOD
                                        ----------   ----------------   --------   ----------   -------------
                                                                                 
2001..................................     $69.9           $79.3          $6.3        $84.4         $71.1
                                           =====           =====          ====        =====         =====
2000..................................     $56.9           $68.0          $7.1        $62.1         $69.9
                                           =====           =====          ====        =====         =====
1999..................................     $56.9           $53.3          $ --        $53.3         $56.9
                                           =====           =====          ====        =====         =====


- ------------------------

(1) Deductions from allowances for losses and discounts on receivables represent
    uncollectible notes and accounts written off.

(2) Other for 2001 and 2000 relate to acquisitions during the year.

                                      F-34

                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Share Owner
Owens-Brockway Packaging, Inc.

    We have audited the accompanying consolidated balance sheets of
Owens-Brockway Packaging, Inc. as of December 31, 2001 and 2000, and the related
consolidated statements of results of operations, net Parent investment, and
cash flows for each of the three years in the period ended December 31, 2001.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Owens-Brockway
Packaging, Inc. at December 31, 2001 and 2000, and the consolidated results of
its operations and its cash flows for each of the three years in the period
ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States.

                                          Ernst & Young LLP

Toledo, Ohio
January 24, 2002

                                      F-35

                         OWENS-BROCKWAY PACKAGING, INC.
                       CONSOLIDATED RESULTS OF OPERATIONS
                             (MILLIONS OF DOLLARS)



                                                                 YEARS ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Revenues:
  Net sales.................................................  $3,749.4   $3,894.1   $3,970.7
  Other revenue.............................................      92.2      110.3      130.0
                                                              --------   --------   --------
                                                               3,841.6    4,004.4    4,100.7

Costs and expenses:
  Manufacturing, shipping, and delivery.....................   2,946.4    3,091.7    3,168.6
  Research and development..................................      10.5       15.0       13.0
  Engineering...............................................      30.0       31.2       35.2
  Selling and administrative................................     173.7      170.1      178.5
  Net intercompany interest.................................     156.3      244.1      207.9
  Other interest expense....................................     189.4      126.6      131.2
  Other.....................................................     159.0      254.5       64.2
                                                              --------   --------   --------
                                                               3,665.3    3,933.2    3,798.6
                                                              --------   --------   --------
Earnings before items below.................................     176.3       71.2      302.1
Provision for income taxes..................................      87.3       19.8      109.6
Minority share owners' interests in earnings of
  subsidiaries..............................................      19.6       20.6       11.2
                                                              --------   --------   --------
Net earnings................................................  $   69.4   $   30.8   $  181.3
                                                              ========   ========   ========


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-36

                         OWENS-BROCKWAY PACKAGING, INC.
                          CONSOLIDATED BALANCE SHEETS
                             (MILLIONS OF DOLLARS)
                                     ASSETS



                                                                 DECEMBER 31,
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
                                                                   
CURRENT ASSETS:
  Cash, including time deposits of $28.2 ($45.3 in 2000)....  $  124.7   $  169.6
  Short-term investments....................................                  3.7
  Receivables including amount from related parties of $1.6
    ($1.1 in 2000), less allowances of $32.2 ($40.6 in 2000)
    for losses and discounts................................     575.3      568.0
  Inventories...............................................     611.0      611.4
  Prepaid expenses..........................................      23.9       57.0
                                                              --------   --------
    Total current assets....................................   1,334.9    1,409.7
OTHER ASSETS:
  Equity investments........................................     153.9      164.8
  Repair parts inventories..................................     173.5      201.6
  Prepaid pension...........................................      49.8       41.2
  Deposits, receivables, and other assets...................     421.4      337.4
  Excess of purchase cost over net assets acquired, net of
    accumulated amortization of $531.0 ($417.2 in 2000).....   1,556.2    1,602.3
                                                              --------   --------
    Total other assets......................................   2,354.8    2,347.3
PROPERTY, PLANT, AND EQUIPMENT:
  Land, at cost.............................................     135.1      130.9
  Buildings and equipment, at cost:
    Buildings and building equipment........................     526.7      540.7
    Factory machinery and equipment.........................   2,828.9    2,809.3
    Transportation, office, and miscellaneous equipment.....      79.3       77.5
    Construction in progress................................     196.8      111.3
                                                              --------   --------
                                                               3,766.8    3,669.7
  Less accumulated depreciation.............................   1,663.5    1,546.8
                                                              --------   --------
    Net property, plant, and equipment......................   2,103.3    2,122.9
                                                              --------   --------
Total assets................................................  $5,793.0   $5,879.9
                                                              ========   ========


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-37

                         OWENS-BROCKWAY PACKAGING, INC.
                    CONSOLIDATED BALANCE SHEETS (CONTINUED)
                             (MILLIONS OF DOLLARS)
                     LIABILITIES AND NET PARENT INVESTMENT



                                                                  DECEMBER 31,
                                                              ---------------------
                                                                 2001        2000
                                                              ----------   --------
                                                                     
CURRENT LIABILITIES:
  Short-term loans..........................................   $   40.4    $   80.9
  Accounts payable including amount to related parties of
    $30.1 ($9.9 in 2000)....................................      337.0       313.9
  Salaries and wages........................................       89.4        67.0
  U.S. and foreign income taxes.............................        0.2         6.3
  Other accrued liabilities.................................      196.0       268.4
  Long-term debt due within one year........................       26.0        26.1
                                                               --------    --------
    Total current liabilities...............................      689.0       762.6
EXTERNAL LONG-TERM DEBT.....................................    2,778.5     1,165.5
DEFERRED TAXES..............................................      161.9       149.1
OTHER LIABILITIES...........................................      275.7       218.4
MINORITY SHARE OWNERS' INTERESTS............................      159.7       165.1
NET PARENT INVESTMENT:
  Investment by and advances from parent....................    2,276.1     3,898.6
  Accumulated other comprehensive loss......................     (547.9)     (479.4)
                                                               --------    --------
    Total net Parent investment.............................    1,728.2     3,419.2
                                                               --------    --------
Total liabilities and net Parent investment.................   $5,793.0    $5,879.9
                                                               ========    ========


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-38

                         OWENS-BROCKWAY PACKAGING, INC.
                       CONSOLIDATED NET PARENT INVESTMENT
                             (MILLIONS OF DOLLARS)



                                                                 YEARS ENDED DECEMBER 31,
                                                              -------------------------------
                                                                2001        2000       1999
                                                              ---------   --------   --------
                                                                            
INVESTMENT BY AND ADVANCES TO PARENT
  Balance at beginning of year..............................  $ 3,898.6   $3,739.8   $3,712.2
  Net intercompany transactions.............................   (1,691.9)     153.0     (153.7)
  Net earnings..............................................       69.4       30.8      181.3
  Net loss for the month ended December 31, 2000 for the
    change in the fiscal year end of certain international
    affiliates..............................................                 (25.0)
                                                              ---------   --------   --------
    Balance at end of year..................................    2,276.1    3,898.6    3,739.8
                                                              =========   ========   ========

ACCUMULATED OTHER COMPREHENSIVE LOSS
  Balance at beginning of year..............................     (479.4)    (343.5)    (179.9)
  Foreign currency translation adjustments..................      (66.0)    (135.9)    (163.6)
  Change in certain derivative instruments..................       (2.5)
                                                              ---------   --------   --------
    Balance at end of year..................................     (547.9)    (479.4)    (343.5)
                                                              =========   ========   ========
Total net Parent investment.................................  $ 1,728.2   $3,419.2   $3,396.3
                                                              =========   ========   ========

TOTAL COMPREHENSIVE INCOME (LOSS)
  Net earnings..............................................  $    69.4   $   30.8   $  181.3
  Foreign currency translation adjustments..................      (66.0)    (135.9)    (163.6)
  Change in certain derivative instruments..................       (2.5)
                                                              =========   ========   ========
    Total...................................................  $     0.9   $ (105.1)  $   17.7
                                                              =========   ========   ========


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-39

                         OWENS-BROCKWAY PACKAGING, INC.
                            CONSOLIDATED CASH FLOWS
                             (MILLIONS OF DOLLARS)



                                                                 YEARS ENDED DECEMBER 31,
                                                              -------------------------------
                                                                2001        2000       1999
                                                              ---------   --------   --------
                                                                            
OPERATING ACTIVITIES:
  Net earnings..............................................  $    69.4   $  30.8    $ 181.3
  Non-cash charges (credits):
    Depreciation............................................      286.4     298.3      299.0
    Amortization of deferred costs..........................       72.3      62.2       66.1
    Deferred tax provision (credit).........................       72.5     (64.2)      45.2
    Restructuring costs and write-offs of certain assets....       65.2     186.0       20.8
    (Gains) losses on asset sales...........................       20.7                (40.8)
    Other...................................................      (64.0)    (80.0)     (95.7)
  Change in non-current operating assets....................       18.9     (16.8)      (7.8)
  Reduction of non-current liabilities......................      (22.1)     (0.1)       1.4
  Change in components of working capital...................      (28.7)    (80.0)     (69.9)
                                                              ---------   -------    -------
      Cash provided by operating activities.................     (490.6)    336.2      399.6

INVESTING ACTIVITIES:
  Additions to property, plant and equipment................     (364.8)   (301.6)    (441.9)
  Acquisitions, net of cash acquired........................     (169.0)    (77.2)     (34.2)
  Net cash proceeds from divestitures and other.............       80.0      31.7      327.6
                                                              ---------   -------    -------
      Cash utilized in investing activities.................     (453.8)   (347.1)    (148.5)

FINANCING ACTIVITIES:
  Additions to long-term debt...............................    2,593.0     172.3      222.6
  Repayments of long-term debt..............................     (918.5)   (357.0)    (475.8)
  Decrease in short-term loans..............................      (35.7)    (40.4)     (14.9)
  Net change in intercompany debt...........................   (1,643.0)    189.9        6.5
  Collateral deposits for certain derivative instruments....      (26.1)
  Payment of finance fees...................................      (45.3)
                                                              ---------   -------    -------
      Cash utilized in financing activities.................      (75.6)    (35.2)    (261.6)
  Effect of exchange rate fluctuations on cash..............       (6.1)     16.1      (17.9)
  Effect of change in fiscal year end for certain
    international affiliates................................                 31.9
                                                              ---------   -------    -------
Increase (decrease) in cash.................................      (44.9)      1.9      (28.4)
Cash at beginning of year...................................      169.6     167.7      196.1
                                                              ---------   -------    -------
Cash at end of year.........................................  $   124.7   $ 169.6    $ 167.7
                                                              =========   =======    =======


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-40

                  STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

    BASIS OF CONSOLIDATED STATEMENTS.  The consolidated financial statements of
Owens-Brockway Packaging, Inc. ("Company") include the accounts of its
subsidiaries. Newly acquired subsidiaries have been included in the consolidated
financial statements from dates of acquisition. Prior to December 2000,
substantially all of the Company's consolidated foreign subsidiaries reported
their results of operations on a one-month lag, which allowed additional time to
compile the results. Beginning in December 2000, the one-month lag was
eliminated. As a result, the December 2000 results of operations for these
subsidiaries, which amounted to a net loss of $25.0 million, was recorded
directly to retained earnings in December 2000.

    The Company uses the equity method of accounting for investments in which it
has a significant ownership interest, generally 20% to 50%. Other investments
are accounted for at cost.

    RELATIONSHIP WITH OWENS-ILLINOIS GROUP, INC. AND OWENS-ILLINOIS, INC.  The
Company is a wholly-owned subsidiary of Owens-Illinois Group, Inc. ("OI Group")
and an indirect subsidiary of Owens-Illinois, Inc. ("OI Inc."). Although
OI Inc. does not conduct any operations, it has substantial obligations related
to outstanding indebtedness, dividends for preferred stock and asbestos-related
payments. OI Inc. relies primarily on distributions from its direct and indirect
subsidiaries to meet these obligations.

    For federal and certain state income tax purposes, the taxable income of the
Company is included in the consolidated tax returns of OI Inc. and income taxes
are allocated to the Company on a basis consistent with separate returns.

    NATURE OF OPERATIONS.  The Company is a leading manufacturer of glass
container products. The Company's principal product lines in the Glass
Containers product segment are glass containers for the food and beverage
industries. The Company has glass container operations located in 19 countries.
The principal markets and operations for the Company's glass products are in
North America, Europe, South America, and Australia. One customer accounted for
11.5%, 10.9%, and 10.3% of the Company's sales in 2001, 2000, and 1999,
respectively.

    USE OF ESTIMATES.  The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires
management of the Company to make estimates and assumptions that affect certain
amounts reported in the financial statements and accompanying notes. Actual
results may differ from those estimates, at which time the Company would revise
its estimates accordingly.

    CASH.  The Company defines "cash" as cash and time deposits with maturities
of three months or less when purchased.

    FAIR VALUES OF FINANCIAL INSTRUMENTS.  The carrying amounts reported for
cash, short-term investments and short-term loans approximate fair value. In
addition, carrying amounts approximate fair value for certain long-term debt
obligations subject to frequently redetermined interest rates. Derivative
financial instruments are included on the balance sheet at fair value.

    INVENTORY VALUATION.  The Company values most U.S. inventories at the lower
of last-in, first-out (LIFO) cost or market. Other inventories are valued at the
lower of standard costs (which approximate average costs) or market.

    EXCESS OF PURCHASE COST OVER NET ASSETS ACQUIRED.  Through December 31,
2001, the excess of purchase cost over net assets acquired was being amortized
over 40 years. The Company evaluated the recoverability of long-lived assets
based on undiscounted projected cash flows, excluding interest and taxes, when
factors indicate that an impairment may exist. (See "New Accounting Standards).

                                      F-41

    PROPERTY, PLANT, AND EQUIPMENT.  In general, depreciation is computed using
the straight-line method. Renewals and improvements are capitalized. Maintenance
and repairs are expensed as incurred.

    REVENUE RECOGNITION.  The Company recognizes sales, net of estimated
discounts and allowances, when title to products is transferred to customers.
Shipping and handling costs are included with manufacturing, shipping, and
delivery costs.

    INCOME TAXES ON UNDISTRIBUTED EARNINGS.  In general, the Company plans to
continue to reinvest the undistributed earnings of foreign subsidiaries and
foreign corporate joint ventures accounted for by the equity method.
Accordingly, taxes are provided only on that amount of undistributed earnings in
excess of planned reinvestments.

    FOREIGN CURRENCY TRANSLATION.  The assets and liabilities of certain
affiliates and associates are translated at current exchange rates and any
related translation adjustments are recorded directly in share owners' equity.
For the years ended December 31, 2001, 2000, and 1999, the Company's affiliates
located in Venezuela operated in a "highly inflationary" economy. As such,
certain assets of these affiliates were translated at historical exchange rates
and all translation adjustments are reflected in the statements of Consolidated
Results of Operations. Effective January 1, 2002, the affiliates in Venezuela
will no longer be considered operating in a "highly inflationary" economy.
Assets and liabilities will be translated at current exchange rates with any
related translation adjustments being recorded directly to net Parent
investment.

    NEW ACCOUNTING STANDARDS.  In July 2001, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 141, "Business
Combinations," which is effective for business combinations completed after
June 30, 2001. Also in July 2001, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" ("FAS No. 142"), which is effective for goodwill acquired
after June 30, 2001. For goodwill acquired prior to July 1, 2001, FAS No. 142
will be effective for fiscal years beginning after December 15, 2001. Under FAS
No. 142, goodwill and intangible assets with indefinite lives will no longer be
amortized but will be reviewed annually (or more frequently if impairment
indicators arise) for impairment.

    The Company estimates that adopting FAS No. 142 will increase 2002 earnings
before the effects of the accounting change by approximately $45 million. The
Company has not completed its assessment of the effects that adopting FAS
No. 142 will have on the reported value of goodwill.

    In October 2001, the Financial Accounting Standards Board ("FASB") issued
Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets" ("FAS No. 144"). FAS No. 144 supersedes FASB Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of" ("FAS No. 121"). FAS No. 144 provides additional guidance on
estimating cash flows when performing a recoverability test, requires that a
long-lived asset (group) to be disposed of other than by sale (e.g. abandoned)
be classified as "held and used" until it is disposed of, and establishes more
restrictive criteria to classify an asset (group) as "held for sale", however it
retains the fundamental provisions of FAS No. 121 related to the recognition and
measurement of the impairment of long-lived assets to be "held and used." FAS
No. 144 is effective for fiscal years beginning after December 15, 2001 and
transition is prospective for committed disposal activities that are initiated
after the effective date of FAS No. 144's initial application. The impact of
adopting FAS No. 144 on the Company's reporting and disclosure is not expected
to be material to the Company's financial position or results of operations.

                                      F-42

                                FINANCIAL REVIEW
                      TABULAR DATA IN MILLIONS OF DOLLARS

    CHANGES IN COMPONENTS OF WORKING CAPITAL RELATED TO OPERATIONS.  Changes in
the components of working capital related to operations (net of the effects
related to acquisitions and divestitures) were as follows:



                                                         2001       2000       1999
                                                       --------   --------   --------
                                                                    
Decrease (increase) in current assets:
  Short-term investments.............................   $  3.6     $ 12.0     $(15.2)
  Receivables........................................      2.3      (35.1)      19.9
  Net intercompany receivable........................     17.2      (43.9)      11.0
  Inventories........................................     24.3      (19.5)     (10.1)
  Prepaid expenses...................................      0.8        3.8      (25.3)
Increase (decrease) in current liabilities:
  Accounts payable and accrued liabilities...........    (46.3)     (20.1)     (47.2)
  Salaries and wages.................................      1.4       (2.6)       8.6
  U.S. and foreign income taxes......................    (32.0)      25.4      (11.6)
                                                        ------     ------     ------
                                                        $(28.7)    $(80.0)    $(69.9)
                                                        ======     ======     ======


    INVENTORIES.  Major classes of inventory are as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Finished goods..............................................   $507.2     $494.9
Work in process.............................................      5.9        7.9
Raw materials...............................................     53.5       58.0
Operating supplies..........................................     44.4       50.6
                                                               ------     ------
                                                               $611.0     $611.4
                                                               ======     ======


    If the inventories which are valued on the LIFO method had been valued at
standard costs, which approximate current costs, consolidated inventories would
be higher than reported by $14.7 million and $10.8 million, at December 31, 2001
and 2000, respectively.

    Inventories which are valued at the lower of standard costs (which
approximate average costs), or market at December 31, 2001 and 2000 were
approximately $465.9 million and $420.0 million, respectively.

    EQUITY INVESTMENTS.  Summarized information pertaining to the Company's
equity associates follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
At end of year:
  Equity in undistributed earnings:
    Foreign.................................................   $ 86.2     $ 85.6
    Domestic................................................     21.6       19.0
                                                               ------     ------
      Total.................................................   $107.8     $104.6
                                                               ======     ======
  Equity in cumulative translation adjustment...............   $(54.2)    $(46.7)
                                                               ======     ======


                                      F-43




                                                           2001       2000       1999
                                                         --------   --------   --------
                                                                      
For the year:
  Equity in earnings:
    Foreign............................................   $ 7.3      $ 4.7      $ 8.2
    Domestic...........................................    11.6       14.0       12.8
                                                          -----      -----      -----
      Total............................................   $18.9      $18.7      $21.0
                                                          =====      =====      =====
  Dividends received...................................   $18.2      $13.9      $ 9.7
                                                          =====      =====      =====


    EXTERNAL LONG-TERM DEBT.  The following table summarizes the external
long-term debt of the Company at December 31, 2001 and 2000:



                                                             2001       2000
                                                           --------   --------
                                                                
Secured Credit Agreement:
  Revolving Credit Facility..............................  $1,560.4
  Term Loan..............................................   1,045.0
Second Amended and Restated Credit Agreement:
  Revolving Credit Facility:
    Offshore Loans:
      Australian Dollars
        1.39 billion.....................................             $  775.3
      British Pounds
        125.0 million....................................                186.8
      Italian Lira
        18.0 billion.....................................                  8.7
Other....................................................     199.1      220.8
                                                           --------   --------
                                                            2,804.5    1,191.6
                                                           --------   --------
Less amounts due within one year.........................      26.0       26.1
                                                           --------   --------
External long-term debt..................................  $2,778.5   $1,165.5
                                                           ========   ========


    In April 2001, OI Group and certain of its domestic and foreign
subsidiaries, including subsidiaries of the Company (the "Borrowers") entered
into the Secured Credit Agreement (the "Agreement") with a group of banks, which
expires on March 31, 2004. The Agreement provides for a $3.0 billion revolving
credit facility (the "Revolving Credit Facility") and a $1.5 billion term loan
(the "Term Loan"). The Agreement includes an Overdraft Account Facility
providing for aggregate borrowings up to $50 million which reduce the amount
available for borrowing under the Revolving Credit Facility. The Agreement also
provides for the issuance of letters of credit totaling up to $500 million,
which also reduce the amount available for borrowings under the Revolving Credit
Facility.

    Under the Secured Credit Agreement, the Company's subsidiaries have a total
commitment of $2.0 billion provided by the Revolving Credit Facility and a total
commitment of $1.045 billion provided by the Term Loan. At December 31, 2001,
the Company's subsidiaries had unused credit of $341.2 million available under
the Secured Credit Agreement.

    Prior to April 2001, the Company's significant domestic financing was
provided by OI Inc. under the April 1998 Second Amended and Restated Credit
Agreement through intercompany loans. Borrowings under the Secured Credit
Agreement by the Company's subsidiaries and certain other domestic subsidiaries
of OI Group were used to repay all amounts outstanding under, and terminate the
Second Amended and Restated Credit Agreement.

    The interest rate on borrowings under the Revolving Credit Facility is, at
the Borrower's option, the Base Rate or a reserve adjusted Eurodollar rate. The
interest rate on borrowings under the

                                      F-44

Revolving Credit Facility also includes a margin linked to the Company's
Consolidated Leverage Ratio, as defined in the Agreement. The margin is limited
to ranges of 1.75% to 2.00% for Eurodollar loans and .75% to 1.00% for Base Rate
loans. The interest rate on Overdraft Account loans is the Base Rate minus .50%.
The weighted average interest rate on borrowings outstanding under the Revolving
Credit Facility at December 31, 2001 was 4.12%. While no compensating balances
are required by the Agreement, the Borrowers must pay a facility fee on the
Revolving Credit Facility commitments of .50%.

    The interest rate on borrowings under the Term Loan is, at the Borrowers'
option, the Base Rate or a reserve adjusted Eurodollar rate. The interest rate
on borrowings under the Term Loan also includes a margin of 2.50% for Eurodollar
loans and 1.50% for Base Rate loans. The weighted average interest rate on
borrowings outstanding under the Term Loan at December 31, 2001 was 4.50%.

    The Agreement requires, among other things, the maintenance of certain
financial ratios, and restricts the creation of liens and certain types of
business activities and investments.

    Borrowings under the Agreement are secured by substantially all the assets
of the Company's domestic subsidiaries and certain foreign subsidiaries, which
have a book value of approximately $1.9 billion. Borrowings are also secured by
a pledge of intercompany debt and equity in most of the Company's domestic
subsidiaries and certain stock of certain foreign subsidiaries.

    During January 2002, a subsidiary of the Company completed a $1.0 billion
private placement of senior secured notes. The notes bear interest at 8 7/8% and
are due February 15, 2009. The notes are guaranteed by OI Group and
substantially all of its domestic subsidiaries. The assets of substantially all
of OI Group's domestic subsidiaries are pledged as security for the notes. The
Company's subsidiary used substantially all the net cash proceeds from the notes
to reduce its outstanding term loan under the Agreement by $980 million. As
such, the Company wrote off unamortized deferred financing fees in January 2002
related to the term loan and recorded an extraordinary charge totaling
$10.9 million less applicable income taxes of $4.2 million. The indenture for
the notes restricts among other things, the ability of the Company and its
restricted subsidiaries to borrow money, pay dividends on, or redeem or
repurchase stock, make investments, create liens, enter into certain
transactions with affiliates, and sell certain assets or merge with or into
other companies.

    Annual maturities for all of the Company's long-term debt through 2006 are
as follows: 2002, $26.0 million; 2003, $43.0 million; 2004, $1,657.2 million;
2005, $70.9 million; and 2006, $5.0 million. These maturities reflect the
issuance of the senior secured notes in January 2002 as noted above.

    Interest paid in cash aggregated $180.5 million for 2001, $117.7 million for
2000, and $116.6 million for 1999.

    GUARANTEES OF DEBT.  The Company has guaranteed the borrowings of certain of
OI Group's domestic subsidiaries totaling $850 million and has also guaranteed
the borrowings of certain foreign subsidiaries under the Agreement.

    During the second quarter of 2001, OI Inc. sought and received consent from
the holders of a majority of the principal amount of each of its six series of
senior notes and debentures to amend the indenture governing those securities.
The amendments implement a previously announced offer by OI Group and the
Company to secure OI Inc.'s obligations under the indentures and the securities
with a second lien on the intercompany debt and capital stock of their direct
subsidiaries, including the Company. OI Group and the Company have also
guaranteed OI Inc.'s obligations under the indentures.

                                      F-45

    OPERATING LEASES.  Rent expense attributable to all operating leases was
$59.6 million in 2001, $44.1 million in 2000, and $43.2 million in 1999. Minimum
future rentals under operating leases are as follows: 2002, $33.2 million; 2003,
$26.2 million; 2004, $17.4 million; 2005, $12.2 million; 2006, $10.7 million;
and 2007 and thereafter, $25.5 million.

    FOREIGN CURRENCY TRANSLATION.  Aggregate foreign currency exchange gains
(losses) included in other costs and expenses were $3.9 million in 2001, $(0.4)
million in 2000, and $4.4 million in 1999.

    DERIVATIVE INSTRUMENTS.  The terms of OI Inc.'s former bank credit agreement
provided for foreign currency borrowings by certain of the Company's
international affiliates. Such borrowings provided a natural hedge against a
portion of the Company's investment. Under the April 2001 Secured Credit
Agreement, international affiliates are only permitted to borrow in U.S.
dollars. The Company's affiliates in Australia and the United Kingdom have
entered into currency swaps covering their initial borrowings under the
Agreement. These swaps are being used to manage the affiliates' exposure to
fluctuating foreign exchange rates by swapping the principal and interest
payments due under the Secured Credit Agreement.

    As of December 31, 2001, the Company's affiliate in Australia has swapped
$650.0 million of borrowings into $1,275.0 million Australian dollars. This swap
matures on March 31, 2003, with interest resets every 90 days. The interest
reset terms of the swap approximate the terms of the U.S. dollar borrowings.
This derivative instrument swaps both the interest and principal from U.S.
dollars to Australian dollars and also swaps the interest rate from a U.S. based
rate to an Australian based rate. The Company's affiliate in the United Kingdom
has swapped $200.0 million of borrowings into 139.0 million British pounds. This
swap also matures on March 31, 2003, with interest resets every 90 days. This
derivative instrument swaps both the interest and principal from U.S. dollars to
British pounds and also swaps the interest rate from a U.S. based rate to a
British rate.

    On October 1, 2001, the Company completed the acquisition of the Canadian
glass container assets of Consumers Packaging Inc. for a purchase price of
approximately $150 million. The Company financed this purchase through
borrowings under the Secured Credit Agreement, which were transferred to Canada
through intercompany loans in U.S. dollars. The Company's affiliate in Canada
has entered into swap transactions to manage the affiliate's exposure to
fluctuating foreign exchange rates by swapping the principal and interest
portion of the intercompany loan. At December 31, 2001, the Canadian affiliate
has swapped $90.0 million of borrowings into $142.0 million Canadian dollars.
This swap matures on October 1, 2003. This derivative instrument swaps both the
interest and principal from U.S. dollars to Canadian dollars and also swaps the
interest rate from a U.S. based rate to a Canadian based rate. The affiliate has
also entered into a forward hedge related to the fourth quarter interest
receivable and payable related to the previous swap. The affiliate has also
entered in forward hedges which effectively swap $10.0 million of borrowings
into $16.0 million Canadian dollars. These hedges swap both the interest and
principal from U.S. dollars to Canadian dollars and mature monthly.

    The Company recognizes the above derivatives on the balance sheet at fair
value. The Company accounts for the above swaps as fair value hedges. As such,
the changes in the value of the swaps are included in other expense and are
expected to substantially offset any exchange rate gains or losses on the
related U.S. dollar borrowings. For the year ended December 31, 2001, the amount
not offset was immaterial.

    The Company also uses commodity futures contracts related to forecasted
natural gas requirements. The objective of these futures contracts is to limit
the fluctuations in prices paid and the potential volatility in earnings or cash
flows from future market price movements. During 2001, the Company entered into
commodity futures contracts for approximately 75% of its domestic natural gas
usage (approximately 1.2 billion BTUs) through March 2002. The Company has also
entered into additional contracts in 2002 with respect to its forecasted natural
gas usage through the end of 2002.

                                      F-46

    The Company accounts for the above futures contracts on the balance sheet at
fair value. The effective portion of changes in the fair value of a derivative
that is designated as and meets the required criteria for a cash flow hedge is
recorded in accumulated other comprehensive income ("OCI") and reclassified into
earnings in the same period or periods during which the underlying hedged item
affects earnings. The ineffective portion of the change in the fair value of a
derivative designated as a cash flow hedge is recognized in current earnings.

    The above futures contracts are accounted for as cash flow hedges at
December 31, 2001. Hedge accounting is only applied when the derivative is
deemed to be highly effective at offsetting anticipated cash flows of the hedged
transactions. For hedged forecasted transactions, hedge accounting will be
discontinued if the forecasted transaction is no longer probable to occur, and
any previously deferred gains or losses will be recorded to earnings
immediately.

    During 2001, an unrealized net loss of $2.5 million (net of tax) related to
these commodity futures contracts was included in OCI. There was no
ineffectiveness recognized during the 2001.

    ACCUMULATED OTHER COMPREHENSIVE LOSS.  Foreign currency translation
adjustments and changes in certain derivative balances comprise accumulated
other comprehensive loss. Changes in accumulated other comprehensive loss was as
follows:



                                                              2001       2000       1999
                                                            --------   --------   --------
                                                                         
Balance at beginning of year..............................  $(479.4)   $(343.5)   $(179.9)
Net effect of exchange rate fluctuations..................    (68.6)    (138.7)    (161.5)
Deferred income taxes.....................................      2.6        2.8       (2.1)
Change in certain derivative balances.....................     (2.5)
                                                            -------    -------    -------
Balance at end of year....................................  $(547.9)   $(479.4)   $(343.5)
                                                            =======    =======    =======


    The net effect of exchange rate fluctuations generally reflects changes in
the relative strength of the U.S. dollar against major foreign currencies
between the beginning and end of the year.

    INCOME TAXES.  Deferred income taxes reflect: (1) the net tax effects of
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes and
(2) carryovers and credits for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities at December 31, 2001 and 2000
are as follows (certain amounts from prior year have been reclassified to
conform to current year presentation):



                                                                2001       2000
                                                              --------   --------
                                                                   
Deferred tax assets:
  Tax loss carryovers.......................................  $  19.4    $  15.3
  Other.....................................................    139.8      130.3
                                                              -------    -------
    Total deferred tax assets...............................    159.2      145.6
Deferred tax liabilities:
  Property, plant and equipment.............................    161.8      142.9
  Inventory.................................................     35.8       39.2
  Other.....................................................    117.6       75.7
                                                              -------    -------
    Total deferred tax liabilities..........................    315.2      257.8
                                                              -------    -------
    Net deferred tax liabilities............................  $(156.0)   $(112.2)
                                                              =======    =======


                                      F-47

    Deferred taxes are included in the Consolidated Balance Sheets at
December 31, 2001 and 2000 as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Prepaid expenses............................................  $   5.9    $  36.9
Deferred tax liabilities....................................   (161.9)    (149.1)
                                                              -------    -------
Net deferred tax liabilities................................  $(156.0)   $(112.2)
                                                              =======    =======


    The provision (benefit) for income taxes consists of the following:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Current:
  State.....................................................   $(0.3)     $ 0.3      $  1.7
  Foreign...................................................    15.1       87.9        61.8
                                                               -----      -----      ------
                                                                14.8       88.2        63.5
                                                               -----      -----      ------
Deferred:
  U.S. Federal..............................................    30.1      (17.4)       56.3
  State.....................................................     3.6       (5.6)        6.7
  Foreign...................................................    38.8      (45.4)      (16.9)
                                                               -----      -----      ------
                                                                72.5      (68.4)       46.1
                                                               -----      -----      ------
Total:
  U.S. Federal..............................................    30.1      (17.4)       56.3
  State.....................................................     3.3       (5.3)        8.4
  Foreign...................................................    53.9       42.5        44.9
                                                               -----      -----      ------
                                                               $87.3      $19.8      $109.6
                                                               =====      =====      ======


    The provision for income taxes was calculated based on the following
components of earnings (loss) before income taxes:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Domestic....................................................   $ 58.3     $(74.8)    $153.8
Foreign.....................................................    118.0      146.0      148.3
                                                               ------     ------     ------
                                                               $176.3     $ 71.2     $302.1
                                                               ======     ======     ======


    Income taxes paid in cash were as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Domestic....................................................   $ 0.2      $ 0.5      $ 0.3
Foreign.....................................................    45.7       44.3       47.1
                                                               -----      -----      -----
                                                               $45.9      $44.8      $47.4
                                                               =====      =====      =====


                                      F-48

    A reconciliation of the provision for income taxes based on the statutory
U.S. Federal tax rate of 35% to the provision for income taxes is as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Pretax earnings at statutory U.S. Federal tax rate..........   $61.7      $24.9      $105.8
Increase (decrease) in provision for income taxes due to:
  Amortization of goodwill..................................    15.1       15.6        16.6
  State taxes, net of federal benefit.......................     2.1       (3.4)        5.5
  Foreign earnings at different rates.......................    (3.4)      (9.3)      (17.0)
  Adjustment for non-U.S. tax law changes...................     6.0       (9.3)
  Other items...............................................     5.8        1.3        (1.3)
                                                               -----      -----      ------
Provision for income taxes..................................   $87.3      $19.8      $109.6
                                                               -----      -----      ------
Effective tax rate..........................................    49.5%      27.9%       36.3%
                                                               =====      =====      ======


    The Company is included with OI Inc.'s consolidated tax returns. OI Inc. has
net operating losses, alternative minimum tax credits, and research and
development credits available to offset future U.S. Federal income tax.

    At December 31, 2001, the Company's equity in the undistributed earnings of
foreign subsidiaries for which income taxes had not been provided approximated
$529.9 million. It is not practicable to estimate the U.S. and foreign tax which
would be payable should these earnings be distributed.

    RELATED PARTY TRANSACTIONS.  Charges for administrative services are
allocated to the Company by OI Inc. based on an annual utilization level. Such
services include compensation and benefits administration, payroll processing,
use of certain general accounting systems, auditing, income tax planning and
compliance, and treasury services. Management believes that such transactions
are on terms no less favorable to the Company than those that could be obtained
from unaffiliated third parties. The following information summarizes the
Company's significant related party transactions:



                                                                 YEARS ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Revenues:
  Sales to affiliated companies.............................   $ 1.0      $ 3.1      $ 4.3
                                                               =====      =====      =====
Expenses:
  Administrative services...................................    18.5       21.5       19.2
  Corporate management fee..................................    16.3       17.9       18.1
                                                               -----      -----      -----
Total expenses..............................................   $34.8      $39.4      $37.3
                                                               =====      =====      =====


    The above expenses are recorded in the statement of operations as follows:



                                                                2000       2001       1999
                                                              --------   --------   --------
                                                                           
Cost of sales...............................................   $16.4      $19.2      $17.0
Selling, general, and administrative expenses...............    18.4       20.2       20.3
                                                               -----      -----      -----
Total expenses..............................................   $34.8      $39.4      $37.3
                                                               =====      =====      =====


    Intercompany interest is charged to the Company from OI Inc. based on
intercompany debt balances. Intercompany interest expense is calculated using a
weighted average interest rate of external borrowings by OI Inc.

                                      F-49

    PARTICIPATION IN OI INC. STOCK OPTION PLANS.  The Company participates in
the stock option plans of OI Inc. under which employees of the Company may be
granted options to purchase common shares of OI Inc. No options may be exercised
in whole or in part during the first year after the date granted. In general,
subject to certain accelerated exercisability provisions, 50% of the options
become exercisable on the fifth anniversary of the date of the option grant,
with the remaining 50% becoming exercisable on the sixth anniversary date of the
option grant. In general, options expire following termination of employment or
the day after the tenth anniversary date of the option grant.

    All options have been granted at prices equal to the market price of the
OI Inc.'s common stock on the date granted. Accordingly, the Company recognizes
no compensation expense related to the stock option plans. OI Inc. has adopted
the disclosure-only provisions of Statement of Financial Accounting Standards
(SFAS) No. 123, "Accounting for Stock-Based Compensation."

    A substantial number of the options have been granted to key employees of
another subsidiary of OI Inc., some of whose compensation costs are included in
an allocation of costs to all operating subsidiaries of OI Inc., including the
Company. It is not practical to determine an amount of additional compensation
allocable to the Company if OI Inc. had elected to recognize compensation cost
based on the fair value of the options granted at grant date as allowed by SFAS
No. 123.

    PENSION BENEFIT PLANS.  The Company participates in OI Inc.'s pension plans
for substantially all employees located in the United States. Benefits generally
are based on compensation for salaried employees and on length of service for
hourly employees. OI Inc.'s policy is to fund pension plans such that sufficient
assets will be available to meet future benefit requirements. Independent
actuaries determine pension costs for each subsidiary of OI Inc. included in the
plans; however, accumulated benefit obligation information and plan assets
pertaining to each subsidiary have not been separately determined. As such, the
accumulated benefit obligation and the plan assets related to the pension plans
for domestic employees have been retained by another subsidiary of OI Inc. Net
credits to results of operations for the Company's allocated portion of the
domestic pension costs amounted to $77.1 million in 2001, $82.9 million in 2000,
and $67.2 million in 1999.

    On October 1, 2001, the Company completed the acquisition of the Canadian
glass container assets of Consumers Packaging Inc. As part of the transaction,
the Company assumed certain of the pension liabilities of Consumers Packaging.
The information below includes the activity of these pension plans from
October 1, 2001 through December 31, 2001.

    The Company's subsidiaries in the United Kingdom, Australia and Canada also
have pension plans covering substantially all employees. The following tables
relate to the Company's principal United Kingdom, Australian and Canadian
pension plans (the International Pension Plans).

    The changes in the International Pension Plans benefit obligations for the
year were as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Obligations at beginning of year............................   $392.7     $400.5
Change in benefit obligations:
  Service cost..............................................      9.3        9.1
  Interest cost.............................................     22.9       22.3
  Actuarial (gain) loss.....................................    (13.1)       6.9
  Acquisitions..............................................    170.0
  Benefit payments..........................................    (25.5)     (24.6)
  Other.....................................................    (11.9)     (21.5)
                                                               ------     ------
    Net increase (decrease) in benefit obligations..........    151.7       (7.8)
                                                               ------     ------
Obligations at end of year..................................   $544.4     $392.7
                                                               ======     ======


                                      F-50

    The changes in the fair value of the International Pension Plans' assets for
the year were as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Fair value at beginning of year.............................   $416.1     $459.5
Change in fair value:
  Actual return (loss) on plan assets.......................    (26.6)       9.2
  Benefit payments..........................................    (25.5)     (24.6)
  Acquisitions..............................................    119.9
  Other.....................................................     (3.3)     (28.0)
                                                               ------     ------
    Net increase (decrease) in fair value of assets.........     64.5      (43.4)
                                                               ------     ------
Fair value at end of year...................................   $480.6     $416.1
                                                               ======     ======


    The funded status of the International Pension Plans at year end was as
follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Plan assets at fair value...................................   $480.6     $416.1
Projected benefit obligations...............................    544.4      392.7
                                                               ------     ------
  Funded status of the plans................................    (63.8)      23.4
Net unrecognized items:
  Actuarial loss............................................     46.7        1.7
  Prior service cost........................................     12.4       16.1
                                                               ------     ------
                                                                 59.1       17.8
                                                               ------     ------
Net prepaid (accrued) pension...............................   $ (4.7)    $ 41.2
                                                               ======     ======


    The net prepaid (accrued) pension is included in the Consolidated Balance
Sheets at December 31, 2001 and 2000 as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Prepaid pension.............................................   $ 49.8     $41.2
Other liabilities...........................................    (54.5)
                                                               ------     -----
                                                               $ (4.7)    $41.2
                                                               ======     =====


    The components of the International Pension Plans' net pension expense
(credit) for the year were as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Service cost................................................   $  9.3     $  9.1     $  8.7
Interest cost...............................................     22.9       22.3       20.3
Expected asset return.......................................    (36.8)     (35.9)     (26.2)
Amortization:
  Prior service cost........................................      1.2        0.8        1.0
  Gain......................................................                (0.1)
                                                               ------     ------     ------
    Net amortization........................................      1.2        0.7        1.0
                                                               ------     ------     ------
Net expense (credit)........................................   $ (3.4)    $ (3.8)    $  3.8
                                                               ======     ======     ======


                                      F-51

    The following selected information is for plans with benefit obligations in
excess of the fair value of plan assets:



                                                                2001
                                                              --------
                                                           
Benefit obligations at the end of the year..................   $484.7
Fair value of plan assets at the end of the year............    411.8
                                                               ======


    The following information is for plans with accumulated benefit obligations
in excess of the fair value of plan assets:



                                                                2001
                                                              --------
                                                           
Accumulated benefit obligations at the end of the year......   $145.8
Fair value of plan assets at the end of the year............    131.5
                                                               ======


    For the International Pension Plans, the actuarial present value of benefit
obligations is based on a weighted discount rate of approximately 6.00% for 2001
and 5.25% for 2000. Future benefits are assumed to increase in a manner
consistent with past experience of the plans, which, to the extent benefits are
based on compensation, includes assumed salary increases on a weighted scale of
approximately 4.00% for 2001 and 2000. The expected weighted long-term rate of
return on assets was approximately 8.50% for 2001, 7.75% for 2000, and 6.75% for
1999. Amortization included in net pension credits is based on the average
remaining service of employees. Plan assets include marketable equity
securities, government and corporate debt securities, real estate and commingled
funds.

    OI Inc. also sponsors several defined contribution plans for all salaried
and hourly U.S. employees of the Company. Participation is voluntary and
participants' contributions are based on their compensation. OI Inc. matches
substantially all plan participants' contributions up to various limits.
OI Inc. charges the Company for its share of the match. The Company's share of
the contributions to these plans amounted to $4.8 million in 2001, $5.6 million
in 2000, and $5.8 million in 1999.

    POSTRETIREMENT BENEFITS OTHER THAN PENSIONS.  OI Inc. provides certain
retiree health care and life insurance benefits covering substantially all U.S.
salaried and certain hourly employees. Employees are generally eligible for
benefits upon retirement and completion of a specified number of years of
creditable service. Independent actuaries determine postretirement benefit costs
for each subsidiary of OI Inc.; however, accumulated postretirement benefit
obligation information pertaining to each subsidiary has not been separately
determined. As such, the accumulated postretirement benefit obligation has been
retained by another subsidiary of OI Inc.

    The Company's net periodic postretirement benefit cost, as allocated by
OI Inc., for domestic employees was $4.8 million, $4.2 million, and
$4.8 million at December 31, 2001, 2000, and 1999, respectively.

    On October 1, 2001, the Company completed the acquisition of the Canadian
glass container assets of Consumers Packaging Inc. The information below is the
activity of the Canadian related retiree health care plan from October 1, 2001
through December 31, 2001.

                                      F-52

    The changes in the Canadian postretirement benefit obligations were as
follows:



                                                                2001
                                                              --------
                                                           
Obligations at beginning of year............................   $  --
Change in benefit obligations:
  Service cost..............................................     0.1
  Interest cost.............................................     0.5
  Actuarial loss............................................     0.1
  Acquisition...............................................    31.2
  Benefit payments..........................................    (0.2)
                                                               -----
    Net change in benefit obligations.......................    31.7
                                                               -----
Obligations at end of year..................................   $31.7
                                                               =====


    The funded status of the Canadian postretirement benefit plans at year end
was as follows:



                                                                2001
                                                              --------
                                                           
Accumulated postretirement benefit obligations..............   $31.7
Net unrecognized items:
  Prior service credits.....................................      --
  Actuarial loss............................................    (0.1)
                                                               -----
                                                                (0.1)
                                                               -----
Nonpension postretirement benefit obligations...............   $31.6
                                                               =====


    The Company's nonpension postretirement benefit obligations are included
with other long term liabilities on the balance sheet.

    The components of the Canadian net postretirement benefit cost were as
follows:



                                                                2001
                                                              --------
                                                           
Service cost................................................    $0.1
Interest cost...............................................     0.5
                                                                ----
Net postretirement benefit cost.............................    $0.6
                                                                ====


    Assumed health care cost inflation was based on a rate of 9.00% in 2001,
declining to an ultimate rate of 5.50%. A one percentage point decrease in the
rate would have decreased the accumulated postretirement benefit obligation at
December 31, 2001 by $4.1 million and decreased the net postretirement benefit
cost for 2001 by $0.1 million. A one percentage point increase in the rate would
have increased the accumulated postretirement benefit obligation at
December 31, 2001 by $5.1 million and increased the net postretirement benefit
cost for 2001 by $0.1 million. The assumed weighted average discount rate used
in determining the accumulated postretirement benefit obligation was 6.50% at
December 31, 2001.

                                      F-53

    Benefits provided by OI Inc. for certain of the hourly retirees of the
Company are determined by collective bargaining. Most other domestic hourly
retirees receive health and life insurance benefits from a multi-employer trust
established by collective bargaining. Payments to the trust as required by the
bargaining agreements are based upon specified amounts per hour worked and were
$6.3 million in 2001, $7.5 million in 2000, and $8.0 million in 1999.
Postretirement health and life benefits for retirees of foreign affiliates are
generally provided through the national health care programs of the countries in
which the affiliates are located.

    OTHER REVENUE.  Other revenue for the year ended December 31, 2001 includes
$10.3 million from the sale of a minerals business in Australia. Other revenue
for the year ended December 31, 1999 includes gains totaling $40.8 million
related to the sales of a U.S. glass container plant and a mold manufacturing
business in Colombia.

    OTHER COSTS AND EXPENSES.  Other costs and expenses for the year ended
December 31, 2001 include pretax charges of $96.2 million related to the
following: (1) charges of $65.2 million principally related to a restructuring
program and impairment at certain of the Company's international and domestic
operations. The charge includes the impairment of assets at the Company's
affiliate in Puerto Rico and the consolidation of manufacturing capacity and the
closing of a facility in Venezuela. The program also includes consolidation of
capacity at certain other international and domestic facilities in response to
decisions about pricing and market strategy; and (2) a charge of $31.0 million
related to the loss on the sale of the Company's facilities in India; The
Company expects its actions related to the restructuring and impairment charges
to be completed during the next several quarters.

    Other costs and expenses for the year ended December 31, 2000 include
charges of $186.0 million principally related to a restructuring and capacity
realignment program. The program, initiated in the third quarter of 2000,
includes the consolidation of manufacturing capacity and a reduction of 175
employees in the U.S. salaried work force, or about 15%, principally as a result
of early retirement incentives. Also included in the program are a write-down of
plant and equipment for the Company's glass container affiliate in India and
certain other asset write-offs. Charges for manufacturing capacity
consolidations of $120.4 million principally involve U.S. glass container
facilities and reflect technology-driven improvements in productivity,
conversions from some juice and similar products to plastic containers, Company
and customer decisions regarding pricing and volume, and the further
concentration of production in the most strategically-located facilities. The
Company expects that it will continue to make cash payments over the next
several quarters for benefits and on-going closing costs related to the closing
of these facilities.

    As a result of reducing the U.S. salaried workforce in 2000, the Company
recognized a settlement gain of approximately $24 million related to its defined
benefit pension plan. This gain has been included in the net charge of
$22.0 million for early retirement incentives and special termination benefits.

    The 2000 pretax charge of $40.0 million was related to the write-down of
property, plant, and equipment in India. Based on the Company's expectation of
future net cash flows of its affiliate in India, the related property, plant,
and equipment was written down to realizable values in accordance with Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of."

                                      F-54

    Selected information relating to the restructuring accruals follows:



                                                                               WRITE-DOWN
                                                                                   OF
                                                          EARLY RETIREMENT      IMPAIRED
                                                           INCENTIVES AND      PROPERTY,
                                                         SPECIAL TERMINATION   PLANT AND
                               CAPACITY REALIGNMENT(A)        BENEFITS         EQUIPMENT     OTHER      TOTAL
                               -----------------------   -------------------   ----------   --------   --------
                                                                                        
2000 restructuring charges...          $120.4                  $ 22.0             $40.0      $ 3.6      $186.0
Write-down of assets to net
  realizable value...........           (48.4)                                    (40.0)      (3.6)      (92.0)
Reduction of OI Inc. prepaid
  pension asset..............           (13.0)                  (18.2)                                   (31.2)
Increase in OI Inc.
  nonpension postretirement
  benefit liability..........            (0.6)                   (3.2)                                    (3.8)
Net cash paid................            (1.2)                   (0.2)                                    (1.4)
                                       ------                  ------             -----      -----      ------
Remaining liabilities at
  December 31, 2000..........            57.2                     0.4                --         --        57.6
2001 restructuring charges...            23.5                                      41.7                   65.2
Write-down of assets to net
  realizable value...........           (33.7)                                    (41.7)                 (75.4)
Net cash paid................           (24.2)                   (0.4)                                   (24.6)
                                       ------                  ------             -----      -----      ------
Remaining liabilities at
  December 31, 2001..........          $ 22.8                  $   --             $  --      $  --      $ 22.8
                                       ======                  ======             =====      =====      ======


- ------------------------

(a) Capacity realignment includes charges for plant closing costs, severance
    benefits, and write-downs of assets for disposal or abandonment as a result
    of restructuring of manufacturing capacity. Write-downs of assets represent
    the majority of the charges for 2001.

    Other costs and expenses for the year ended December 31, 1999 include
charges totaling $20.8 million related principally to restructuring costs and
write-offs of certain assets in Europe and South America.

    GEOGRAPHIC INFORMATION.  The Company operates in the rigid packaging
industry. The Company has one primary reportable product segment within the
rigid packaging industry: Glass Containers. The Glass Containers segment
includes operations in North America, Europe, the Asia Pacific region, and South
America.

    The Company evaluates performance and allocates resources based on earnings
before interest income, interest expense, provision for income taxes, minority
share owners' interests in earnings of subsidiaries, and extraordinary charges
(collectively "EBIT") excluding unusual items. Net sales as shown in the
geographic segment information are based on the location of the Company's
affiliate which recorded the sales.

                                      F-55

    Financial information regarding the Company's geographic segments is as
follows:



                                                                                              TOTAL
                                                NORTH                   ASIA      SOUTH     GEOGRAPHIC
                                              AMERICA(A)    EUROPE    PACIFIC    AMERICA     SEGMENTS
                                              ----------   --------   --------   --------   ----------
                                                                             
Net sales:
  2001......................................   $1,662.2    $  909.7    $660.6     $516.9     $3,749.4
  2000......................................    1,744.9       894.0     760.7      494.5      3,894.1
  1999......................................    1,777.5       965.6     815.0      412.6      3,970.7
                                               ========    ========    ======     ======     ========
EBIT, excluding unusual items:
  2001......................................   $  306.2    $   93.2    $102.2     $ 91.6     $  593.2
  2000......................................      317.4        81.9     123.9       77.2        600.4
  1999......................................      336.0        97.9     135.0       29.9        598.8
                                               ========    ========    ======     ======     ========
Unusual items:
  2001:
    Gain on the sale of a minerals business
      in Australia..........................                           $ 10.3                $   10.3
    Restructuring and impairment charges....   $  (35.1)   $   (6.1)     (0.8)    $(23.2)       (65.2)
    Special employee benefit programs.......       (4.4)       (0.7)     (2.3)      (0.2)        (7.6)
    Loss on the sale of the Company's
      facilities in India...................                            (31.0)                  (31.0)
  2000:
    Charges related to consolidation of
      manufacturing capacity................     (124.0)                             3.6       (120.4)
    Charges related to early retirement
      incentives and special termination
      benefits..............................      (22.0)                                        (22.0)
    Charges related to impairment of
      property, plant, and equipment in
      India.................................                            (40.0)                  (40.0)
    Other...................................                                        (3.6)        (3.6)
  1999:
    Gains related to the sales of two
      manufacturing facilities..............       30.8                             10.0         40.8
    Charges related principally to
      restructuring costs and write-offs of
      certain assets in Europe and South
      America...............................                  (10.8)               (10.0)       (20.8)


- ------------------------

(a) One customer accounted for 11.5%, 10.9%, and 10.3% of the Company's sales in
    2001, 2000, and 1999 respectively.

    The Company's net fixed assets by location are as follows:



                                                            UNITED
                                                            STATES    FOREIGN     TOTAL
                                                           --------   --------   --------
                                                                        
2001.....................................................   $605.0    $1,498.3   $2,103.3
2000.....................................................    612.6     1,510.3    2,122.9
1999.....................................................    676.7     1,631.1    2,307.8
                                                            ======    ========   ========


                                      F-56

    Reconciliations to consolidated totals are as follows:



                                                           2001       2000       1999
                                                         --------   --------   --------
                                                                      
Revenues:
  Net sales............................................  $3,749.4   $3,894.1   $3,970.7
  Royalties and net technical assistance...............      17.2       17.9       21.3
  Equity earnings......................................      18.9       18.7       21.0
  Interest.............................................      22.3       27.5       22.4
  Other................................................      33.8       46.2       65.3
                                                         --------   --------   --------
  Total................................................  $3,841.6   $4,004.4   $4,100.7
                                                         ========   ========   ========
Reconciliation of EBIT to earnings before income taxes
  and minority share owners' interests in earnings of
  subsidiaries:
  EBIT, excluding unusual items........................  $  593.2   $  600.4   $  598.8
  Unusual items........................................     (93.5)    (186.0)      20.0
  Net interest expense.................................    (323.4)    (343.2)    (316.7)
                                                         --------   --------   --------
  Total................................................  $  176.3   $   71.2   $  302.1
                                                         ========   ========   ========


                                      F-57

                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Share Owner
Owens-Brockway Glass Container Inc.

    We have audited the accompanying consolidated balance sheets of
Owens-Brockway Glass Container Inc. as of December 31, 2001 and 2000, and the
related consolidated statements of results of operations, net Parent investment,
and cash flows for each of the three years in the period ended December 31,
2001. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Owens-Brockway
Glass Container Inc. at December 31, 2001 and 2000, and the consolidated results
of its operations and its cash flows for each of the three years in the period
ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States.

                                          Ernst & Young LLP

Toledo, Ohio
January 24, 2002

                                      F-58

                      OWENS-BROCKWAY GLASS CONTAINER INC.
                       CONSOLIDATED RESULTS OF OPERATIONS
                             (MILLIONS OF DOLLARS)



                                                                 YEARS ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Revenues:
  Net sales.................................................  $3,749.4   $3,891.6   $3,965.2
  Other revenue.............................................      92.2      105.5      130.0
                                                              --------   --------   --------
                                                               3,841.6    3,997.1    4,095.2
Costs and expenses:
  Manufacturing, shipping, and delivery.....................   2,946.4    3,090.1    3,165.2
  Research and development..................................      10.5       15.0       13.0
  Engineering...............................................      30.0       31.2       35.2
  Selling and administrative................................     173.7      170.1      178.5
  Net intercompany interest.................................     156.3      245.1      208.2
  Other interest expense....................................     189.4      126.6      131.2
  Other.....................................................     159.0      254.4       64.3
                                                              --------   --------   --------
                                                               3,665.3    3,932.5    3,795.6
                                                              --------   --------   --------
Earnings before items below.................................     176.3       64.6      299.6
Provision for income taxes..................................      87.3       24.0      108.7
                                                              --------   --------   --------
Minority share owners' interests in earnings of
  subsidiaries..............................................      19.6       20.6       11.2
                                                              --------   --------   --------
Net earnings................................................  $   69.4   $   20.0   $  179.7
                                                              ========   ========   ========


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-59

                      OWENS-BROCKWAY GLASS CONTAINER INC.
                          CONSOLIDATED BALANCE SHEETS
                             (MILLIONS OF DOLLARS)

                                     ASSETS



                                                                 DECEMBER 31,
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
                                                                   
CURRENT ASSETS:
  Cash, including time deposits of $28.2 ($45.3 in 2000)....  $  124.7   $  169.6
  Short-term investments....................................                  3.7
  Receivables including amount from related parties of $1.6
    ($1.1 in 2000), less allowances of $32.2 ($40.6 in 2000)
    for losses and discounts................................     575.3      568.0
  Inventories...............................................     611.0      611.4
  Prepaid expenses..........................................      23.9       57.0
                                                              --------   --------
    Total current assets....................................   1,334.9    1,409.7

OTHER ASSETS:
  Equity investments........................................     153.9      164.4
  Repair parts inventories..................................     173.5      201.6
  Prepaid pension...........................................      49.8       41.2
  Deposits, receivables, and other assets...................     421.4      337.4
  Excess of purchase cost over net assets acquired, net of
    accumulated amortization of $531.0 ($417.2 in 2000).....   1,556.2    1,602.3
                                                              --------   --------
    Total other assets......................................   2,354.8    2,346.9

PROPERTY, PLANT, AND EQUIPMENT:
  Land, at cost.............................................     135.1      130.9
  Buildings and equipment, at cost:
    Buildings and building equipment........................     526.7      540.7
    Factory machinery and equipment.........................   2,828.9    2,809.3
    Transportation, office, and miscellaneous equipment.....      79.3       77.5
    Construction in progress................................     196.8      111.3
                                                              --------   --------
                                                               3,766.8    3,669.7
  Less accumulated depreciation.............................   1,663.5    1,546.8
                                                              --------   --------
    Net property, plant, and equipment......................   2,103.3    2,122.9
                                                              --------   --------
Total assets................................................  $5,793.0   $5,879.5
                                                              ========   ========


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-60

                      OWENS-BROCKWAY GLASS CONTAINER INC.
                    CONSOLIDATED BALANCE SHEETS (CONTINUED)
                             (MILLIONS OF DOLLARS)

                     LIABILITIES AND NET PARENT INVESTMENT



                                                                 DECEMBER 31,
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
                                                                   
CURRENT LIABILITIES:
  Short-term loans..........................................  $   40.4   $   80.9
  Accounts payable including amount to related parties of
    $30.1 ($9.9 in 2000)....................................     337.0      313.9
  Salaries and wages........................................      89.4       67.0
  U.S. and foreign income taxes.............................       0.2        6.3
  Other accrued liabilities.................................     196.0      266.3
  Long-term debt due within one year........................      26.0       26.1
                                                              --------   --------
    Total current liabilities...............................     689.0      760.5
EXTERNAL LONG-TERM DEBT.....................................   2,778.5    1,165.5
DEFERRED TAXES..............................................     161.9      149.1
OTHER LIABILITIES...........................................     275.7      218.4
MINORITY SHARE OWNERS' INTERESTS............................     159.7      165.1

NET PARENT INVESTMENT:
  Investment by and advances from parent....................   2,276.1    3,900.3
  Accumulated other comprehensive loss......................    (547.9)    (479.4)
                                                              --------   --------
    Total net Parent investment.............................   1,728.2    3,420.9
                                                              --------   --------
Total liabilities and net Parent investment.................  $5,793.0   $5,879.5
                                                              ========   ========


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-61

                      OWENS-BROCKWAY GLASS CONTAINER INC.
                       CONSOLIDATED NET PARENT INVESTMENT
                             (MILLIONS OF DOLLARS)



                                                                 YEARS ENDED DECEMBER 31,
                                                              -------------------------------
                                                                2001        2000       1999
                                                              ---------   --------   --------
                                                                            
INVESTMENT BY AND ADVANCES TO PARENT
  Balance at beginning of year..............................  $ 3,900.3   $3,730.4   $3,701.8
  Net intercompany transactions.............................   (1,693.6)     174.9     (151.1)
  Net earnings..............................................       69.4       20.0      179.7
  Net loss for the month ended December 31, 2000 for the
    change in the fiscal year end of certain international
    affiliates..............................................                 (25.0)
                                                              ---------   --------   --------
    Balance at end of year..................................    2,276.1    3,900.3    3,730.4
                                                              =========   ========   ========

ACCUMULATED OTHER COMPREHENSIVE LOSS
  Balance at beginning of year..............................     (479.4)    (343.5)    (179.9)
  Foreign currency translation adjustments..................      (66.0)    (135.9)    (163.6)
  Change in certain derivative instruments..................       (2.5)
                                                              ---------   --------   --------
    Balance at end of year..................................     (547.9)    (479.4)    (343.5)
                                                              =========   ========   ========
Total net Parent investment.................................  $ 1,728.2   $3,420.9   $3,386.9
                                                              =========   ========   ========

TOTAL COMPREHENSIVE INCOME (LOSS)
  Net earnings..............................................  $    69.4   $   20.0   $  179.7
  Foreign currency translation adjustments..................      (66.0)    (135.9)    (163.6)
  Change in certain derivative instruments..................       (2.5)
                                                              ---------   --------   --------
    Total...................................................  $     0.9   $ (115.9)  $   16.1
                                                              =========   ========   ========


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-62

                      OWENS-BROCKWAY GLASS CONTAINER INC.
                            CONSOLIDATED CASH FLOWS
                              MILLIONS OF DOLLARS



                                                                 YEARS ENDED DECEMBER 31,
                                                              -------------------------------
                                                                2001        2000       1999
                                                              ---------   --------   --------
                                                                            
OPERATING ACTIVITIES:
  Net earnings..............................................  $    69.4   $  20.0    $ 179.7
  Non-cash charges (credits):
    Depreciation............................................      286.4     298.3      299.0
    Amortization of deferred costs..........................       72.3      62.2       66.1
    Deferred tax provision (credit).........................       72.5     (64.2)      45.2
    Restructuring costs and write-offs of certain assets....       65.2     186.0       20.8
    (Gains) losses on asset sales...........................       20.7                (40.8)
    Other...................................................      (64.0)    (80.0)     (95.7)
  Change in non-current operating assets....................       18.9     (16.8)      (7.8)
  Change in non-current liabilities.........................      (22.1)     (0.1)       1.4
  Change in components of working capital...................      (28.7)    (80.0)     (69.9)
                                                              ---------   -------    -------
    Cash provided by operating activities...................      490.6     325.4      398.0

INVESTING ACTIVITIES:
  Additions to property, plant and equipment................     (364.8)   (301.6)    (441.9)
  Acquisitions, net of cash acquired........................     (169.0)    (77.2)     (34.2)
  Net cash proceeds from divestitures and other.............       80.0      31.7      327.6
                                                              ---------   -------    -------
    Cash utilized in investing activities...................     (453.8)   (347.1)    (148.5)

FINANCING ACTIVITIES:
  Additions to long-term debt...............................    2,593.0     172.3      222.6
  Repayments of long-term debt..............................     (918.5)   (357.0)    (475.8)
  Decrease in short-term loans..............................      (35.7)    (40.4)     (14.9)
  Net change in intercompany debt...........................   (1,643.0)    200.7        8.1
  Collateral deposits for certain derivative instruments....      (26.1)
  Payment of finance fees...................................      (45.3)
                                                              ---------   -------    -------
    Cash utilized in financing activities...................      (75.6)    (24.4)    (260.0)
  Effect of exchange rate fluctuations on cash..............       (6.1)     16.1      (17.9)
  Effect of change in fiscal year end for certain
    international affiliates................................                 31.9
                                                              ---------   -------    -------
Increase (decrease) in cash.................................      (44.9)      1.9      (28.4)
Cash at beginning of year...................................      169.6     167.7      196.1
                                                              ---------   -------    -------
Cash at end of year.........................................  $   124.7   $ 169.6    $ 167.7
                                                              =========   =======    =======


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-63

                  STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

    BASIS OF CONSOLIDATED STATEMENTS.  The consolidated financial statements of
Owens-Brockway Glass Container, Inc. ("Company") include the accounts of its
subsidiaries. Newly acquired subsidiaries have been included in the consolidated
financial statements from dates of acquisition. Prior to December 2000,
substantially all of the Company's consolidated foreign subsidiaries reported
their results of operations on a one-month lag, which allowed additional time to
compile the results. Beginning in December 2000, the one-month lag was
eliminated. As a result, the December 2000 results of operations for these
subsidiaries, which amounted to a net loss of $25.0 million, was recorded
directly to retained earnings in December 2000.

    The Company uses the equity method of accounting for investments in which it
has a significant ownership interest, generally 20% to 50%. Other investments
are accounted for at cost.

    RELATIONSHIP WITH OWENS-BROCKWAY PACKAGING, INC., OWENS-ILLINOIS
GROUP, INC. AND OWENS-ILLINOIS, INC. The Company is a wholly-owned subsidiary of
Owens-Brockway Packaging, Inc. ("OB Packaging"), and an indirect subsidiary of
Owens-Illinois Group, Inc. ("OI Group") and Owens-Illinois, Inc. ("OI Inc.").
Although OI Inc. does not conduct any operations, it has substantial obligations
related to outstanding indebtedness, dividends for preferred stock and
asbestos-related payments. OI Inc. relies primarily on distributions from its
direct and indirect subsidiaries to meet these obligations.

    For federal and certain state income tax purposes, the taxable income of the
Company is included in the consolidated tax returns of OI Inc. and income taxes
are allocated to the Company on a basis consistent with separate returns.

    NATURE OF OPERATIONS.  The Company is a leading manufacturer of glass
container products. The Company's principal product lines in the Glass
Containers product segment are glass containers for the food and beverage
industries. The Company has glass container operations located in 19 countries.
The principal markets and operations for the Company's glass products are in
North America, Europe, South America, and Australia. One customer accounted for
11.5%, 10.9%, and 10.3% of the Company's sales in 2001, 2000, and 1999,
respectively.

    USE OF ESTIMATES.  The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires
management of the Company to make estimates and assumptions that affect certain
amounts reported in the financial statements and accompanying notes. Actual
results may differ from those estimates, at which time the Company would revise
its estimates accordingly.

    CASH.  The Company defines "cash" as cash and time deposits with maturities
of three months or less when purchased.

    FAIR VALUES OF FINANCIAL INSTRUMENTS.  The carrying amounts reported for
cash, short-term investments and short-term loans approximate fair value. In
addition, carrying amounts approximate fair value for certain long-term debt
obligations subject to frequently redetermined interest rates. Derivative
financial instruments are included on the balance sheet at fair value.

    INVENTORY VALUATION.  The Company values most U.S. inventories at the lower
of last-in, first-out (LIFO) cost or market. Other inventories are valued at the
lower of standard costs (which approximate average costs) or market.

    EXCESS OF PURCHASE COST OVER NET ASSETS ACQUIRED.  Through December 31,
2001, the excess of purchase cost over net assets acquired was being amortized
over 40 years. The Company evaluated the recoverability of long-lived assets
based on undiscounted projected cash flows, excluding interest and taxes, when
factors indicate that an impairment may exist. (See "New Accounting Standards").

                                      F-64

    PROPERTY, PLANT, AND EQUIPMENT.  In general, depreciation is computed using
the straight-line method. Renewals and improvements are capitalized. Maintenance
and repairs are expensed as incurred.

    REVENUE RECOGNITION.  The Company recognizes sales, net of estimated
discounts and allowances, when title to products is transferred to customers.
Shipping and handling costs are included with manufacturing, shipping, and
delivery costs.

    INCOME TAXES ON UNDISTRIBUTED EARNINGS.  In general, the Company plans to
continue to reinvest the undistributed earnings of foreign subsidiaries and
foreign corporate joint ventures accounted for by the equity method.
Accordingly, taxes are provided only on that amount of undistributed earnings in
excess of planned reinvestments.

    FOREIGN CURRENCY TRANSLATION.  The assets and liabilities of certain
affiliates and associates are translated at current exchange rates and any
related translation adjustments are recorded directly in share owners' equity.
For the years ended December 31, 2001, 2000, and 1999, the Company's affiliates
located in Venezuela operated in a "highly inflationary" economy. As such,
certain assets of these affiliates were translated at historical exchange rates
and all translation adjustments are reflected in the statements of Consolidated
Results of Operations. Effective January 1, 2002, the affiliates in Venezuela
will no longer be considered operating in a "highly inflationary" economy.
Assets and liabilities will be translated at current exchange rates with any
related translation adjustments being recorded directly to net Parent
investment.

    NEW ACCOUNTING STANDARDS.  In July 2001, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 141, "Business
Combinations," which is effective for business combinations completed after
June 30, 2001. Also in July 2001, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" ("FAS No. 142"), which is effective for goodwill acquired
after June 30, 2001. For goodwill acquired prior to July 1, 2001, FAS No. 142
will be effective for fiscal years beginning after December 15, 2001. Under FAS
No. 142, Goodwill and intangible assets with indefinite lives will no longer be
amortized but will be reviewed annually (or more frequently if impairment
indicators arise) for impairment.

    The Company estimates that adopting FAS No. 142 will increase 2002 earnings
before the effects of the accounting change by approximately $45 million. The
Company has not completed its assessment of the effects that adopting FAS
No. 142 will have on the reported value of goodwill.

    In October 2001, the Financial Accounting Standards Board ("FASB") issued
Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets" ("FAS No. 144"). FAS No. 144 supersedes FASB Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of" ("FAS No. 121"). FAS No. 144 provides additional guidance on
estimating cash flows when performing a recoverability test, requires that a
long-lived asset (group) to be disposed of other than by sale (e.g. abandoned)
be classified as "held and used" until it is disposed of, and establishes more
restrictive criteria to classify an asset (group) as "held for sale", however it
retains the fundamental provisions of FAS No. 121 related to the recognition and
measurement of the impairment of long-lived assets to be "held and used." FAS
No. 144 is effective for fiscal years beginning after December 15, 2001 and
transition is prospective for committed disposal activities that are initiated
after the effective date of FAS No. 144's initial application. The impact of
adopting FAS No. 144 on the Company's reporting and disclosure is not expected
to be material to the Company's financial position or results of operations.

                                      F-65

                                FINANCIAL REVIEW
                      TABULAR DATA IN MILLIONS OF DOLLARS

    CHANGES IN COMPONENTS OF WORKING CAPITAL RELATED TO OPERATIONS.  Changes in
the components of working capital related to operations (net of the effects
related to acquisitions and divestitures) were as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Decrease (increase) in current assets:
  Short-term investments....................................   $  3.6     $ 12.0     $(15.2)
  Receivables...............................................      2.3      (35.1)      19.9
  Net intercompany receivable...............................     17.2      (43.9)      11.0
  Inventories...............................................     24.3      (19.5)     (10.1)
  Prepaid expenses..........................................      0.8        3.8      (25.3)
Increase (decrease) in current liabilities:
  Accounts payable and accrued liabilities..................    (46.3)     (20.1)     (47.2)
  Salaries and wages........................................      1.4       (2.6)       8.6
  U.S. and foreign income taxes.............................    (32.0)      25.4      (11.6)
                                                               ------     ------     ------
                                                               $(28.7)    $(80.0)    $(69.9)
                                                               ------     ------     ------


    INVENTORIES.  Major classes of inventory are as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Finished goods..............................................   $507.2     $494.9
Work in process.............................................      5.9        7.9
Raw materials...............................................     53.5       58.0
Operating supplies..........................................     44.4       50.6
                                                               ------     ------
                                                               $611.0     $611.4
                                                               ======     ======


    If the inventories which are valued on the LIFO method had been valued at
standard costs, which approximate current costs, consolidated inventories would
be higher than reported by $14.7 million and $10.8 million, at December 31, 2001
and 2000, respectively.

    Inventories which are valued at the lower of standard costs (which
approximate average costs), or market at December 31, 2001 and 2000 were
approximately $465.9 million and $420.0 million, respectively.

                                      F-66

    EQUITY INVESTMENTS.  Summarized information pertaining to the Company's
equity associates follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
At end of year:
  Equity in undistributed earnings:
    Foreign.................................................   $ 86.2     $ 85.6
    Domestic................................................     21.6       19.0
                                                               ------     ------
      Total.................................................   $107.8     $104.6
                                                               ======     ======
Equity in cumulative translation adjustment.................   $(54.2)    $(46.7)
                                                               ======     ======




                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
For the year:
  Equity in earnings:
    Foreign.................................................   $ 7.3      $ 4.7      $ 8.2
    Domestic................................................    11.6       14.0       12.8
                                                               -----      -----      -----
      Total.................................................   $18.9      $18.7      $21.0
                                                               =====      =====      =====
Dividends received..........................................   $18.2      $13.9      $ 9.7
                                                               =====      =====      =====


    EXTERNAL LONG-TERM DEBT.  The following table summarizes the external
long-term debt of the Company at December 31, 2001 and 2000:



                                                                2001       2000
                                                              --------   --------
                                                                   
Secured Credit Agreement:
  Revolving Credit Facility.................................  $1,560.4
  Term Loan.................................................   1,045.0
Second Amended and Restated Credit Agreement:
  Revolving Credit Facility:
    Offshore Loans:
      Australian Dollars 1.39 billion.......................             $  775.3
      British Pounds 125.0 million..........................                186.8
      Italian Lira 18.0 billion.............................                  8.7
Other.......................................................     199.1      220.8
                                                              --------   --------
                                                               2,804.5    1,191.6
  Less amounts due within one year..........................      26.0       26.1
                                                              --------   --------
    External long-term debt.................................  $2,778.5   $1,165.5
                                                              ========   ========


    In April 2001, OI Group and certain of its subsidiaries, including the
Company and certain of its foreign subsidiaries (the "Borrowers") entered into
the Secured Credit Agreement (the "Agreement") with a group of banks, which
expires on March 31, 2004. The Agreement provides for a $3.0 billion revolving
credit facility (the "Revolving Credit Facility") and a $1.5 billion term loan
(the "Term Loan"). The Agreement includes an Overdraft Account Facility
providing for aggregate borrowings up to $50 million which reduce the amount
available for borrowing under the Revolving Credit Facility. The Agreement also
provides for the issuance of letters of credit totaling up to $500 million,
which also reduce the amount available for borrowings under the Revolving Credit
Facility.

    Under the Secured Credit Agreement, the Company and its subsidiaries have a
total commitment of $2.0 billion provided by the Revolving Credit Facility and a
total commitment of $1.045 billion

                                      F-67

provided by the Term Loan. At December 31, 2001, the Company and its
subsidiaries had unused credit of $341.2 million available under the Secured
Credit Agreement.

    Prior to April 2001, the Company's significant domestic financing was
provided by OI Inc. under the April 1998 Second Amended and Restated Credit
Agreement through intercompany loans. Borrowings under the Secured Credit
Agreement by the Company, its subsidiaries and certain other domestic
subsidiaries of OI Group were used to repay all amounts outstanding under, and
terminate the Second Amended and Restated Credit Agreement.

    The interest rate on borrowings under the Revolving Credit Facility is, at
the Borrower's option, the Base Rate or a reserve adjusted Eurodollar rate. The
interest rate on borrowings under the Revolving Credit Facility also includes a
margin linked to the Company's Consolidated Leverage Ratio, as defined in the
Agreement. The margin is limited to ranges of 1.75% to 2.00% for Eurodollar
loans and .75% to 1.00% for Base Rate loans. The interest rate on Overdraft
Account loans is the Base Rate minus .50%. The weighted average interest rate on
borrowings outstanding under the Revolving Credit Facility at December 31, 2001
was 4.12%. While no compensating balances are required by the Agreement, the
Borrowers must pay a facility fee on the Revolving Credit Facility commitments
of .50%.

    The interest rate on borrowings under the Term Loan is, at the Borrowers'
option, the Base Rate or a reserve adjusted Eurodollar rate. The interest rate
on borrowings under the Term Loan also includes a margin of 2.50% for Eurodollar
loans and 1.50% for Base Rate loans. The weighted average interest rate on
borrowings outstanding under the Term Loan at December 31, 2001 was 4.50%.

    The Agreement requires, among other things, the maintenance of certain
financial ratios, and restricts the creation of liens and certain types of
business activities and investments.

    Borrowings under the Agreement are secured by substantially all the assets
of the Company, its domestic subsidiaries and certain foreign subsidiaries,
which have a book value of approximately $1.9 billion. Borrowings are also
secured by a pledge of intercompany debt and equity in most of the Company's
domestic subsidiaries and certain stock of certain foreign subsidiaries.

    During January 2002, the Company completed a $1.0 billion private placement
of senior secured notes. The notes bear interest at 8 7/8% and are due
February 15, 2009. The notes are guaranteed by OI Group and substantially all of
its domestic subsidiaries. The assets of substantially all of OI Group's
domestic subsidiaries are pledged as security for the notes. The Company used
substantially all the net cash proceeds from the notes to reduce its outstanding
term loan under the Agreement by $980 million. As such, the Company wrote off
unamortized deferred financing fees in January 2002 related to the term loan and
recorded an extraordinary charge totaling $10.9 million less applicable income
taxes of $4.2 million. The indenture for the notes restricts among other things,
the ability of the Company and its restricted subsidiaries to borrow money, pay
dividends on, or redeem or repurchase stock, make investments, create liens,
enter into certain transactions with affiliates, and sell certain assets or
merge with or into other companies.

    Annual maturities for all of the Company's long-term debt through 2006 are
as follows: 2002, $26.0 million; 2003, $43.0 million; 2004, $1,657.2 million;
2005, $70.9 million; and 2006, $5.0 million. These maturities reflect the
issuance of the senior secured notes in January 2002 as noted above.

    Interest paid in cash aggregated $180.5 million for 2001, $117.7 million for
2000, and $116.6 million for 1999.

    GUARANTEES OF DEBT.  The Company has guaranteed the borrowings of certain of
OI Inc.'s domestic subsidiaries totaling $850 million and has also guaranteed
the borrowings of certain foreign subsidiaries under the Agreement.

                                      F-68

    OPERATING LEASES.  Rent expense attributable to all operating leases was
$59.6 million in 2001, $44.1 million in 2000, and $43.2 million in 1999. Minimum
future rentals under operating leases are as follows: 2002, $33.2 million; 2003,
$26.2 million; 2004, $17.4 million; 2005, $12.2 million; 2006, $10.7 million;
and 2007 and thereafter, $25.5 million.

    FOREIGN CURRENCY TRANSLATION.  Aggregate foreign currency exchange gains
(losses) included in other costs and expenses were $3.9 million in 2001, $(0.4)
million in 2000, and $4.4 million in 1999.

    DERIVATIVE INSTRUMENTS.  The terms of OI Inc.'s former bank credit agreement
provided for foreign currency borrowings by certain of the Company's
international affiliates. Such borrowings provided a natural hedge against a
portion of the Company's investment. Under the April 2001 Secured Credit
Agreement, international affiliates are only permitted to borrow in U.S.
dollars. The Company's affiliates in Australia and the United Kingdom have
entered into currency swaps covering their initial borrowings under the
Agreement. These swaps are being used to manage the affiliates' exposure to
fluctuating foreign exchange rates by swapping the principal and interest
payments due under the Secured Credit Agreement.

    As of December 31, 2001, the Company's affiliate in Australia has swapped
$650.0 million of borrowings into $1,275.0 million Australian dollars. This swap
matures on March 31, 2003, with interest resets every 90 days. The interest
reset terms of the swap approximate the terms of the U.S. dollar borrowings.
This derivative instrument swaps both the interest and principal from U.S.
dollars to Australian dollars and also swaps the interest rate from a U.S. based
rate to an Australian based rate. The Company's affiliate in the United Kingdom
has swapped $200.0 million of borrowings into 139.0 million British pounds. This
swap also matures on March 31, 2003, with interest resets every 90 days. This
derivative instrument swaps both the interest and principal from U.S. dollars to
British pounds and also swaps the interest rate from a U.S. based rate to a
British rate.

    On October 1, 2001, the Company completed the acquisition of the Canadian
glass container assets of Consumers Packaging Inc. for a purchase price of
approximately $150 million. The Company financed this purchase through
borrowings under the Secured Credit Agreement, which were transferred to Canada
through intercompany loans in U.S. dollars. The Company's affiliate in Canada
has entered into swap transactions to manage the affiliate's exposure to
fluctuating foreign exchange rates by swapping the principal and interest
portion of the intercompany loan. At December 31, 2001, the Canadian affiliate
has swapped $90.0 million of borrowings into $142.0 million Canadian dollars.
This swap matures on October 1, 2003. This derivative instrument swaps both the
interest and principal from U.S. dollars to Canadian dollars and also swaps the
interest rate from a U.S. based rate to a Canadian based rate. The affiliate has
also entered into a forward hedge related to the fourth quarter interest
receivable and payable related to the previous swap. The affiliate has also
entered in forward hedges which effectively swap $10.0 million of borrowings
into $16.0 million Canadian dollars. These hedges swap both the interest and
principal from U.S. dollars to Canadian dollars and mature monthly.

    The Company recognizes the above derivatives on the balance sheet at fair
value. The Company accounts for the above swaps as fair value hedges. As such,
the changes in the value of the swaps are included in other expense and are
expected to substantially offset any exchange rate gains or losses on the
related U.S. dollar borrowings. For the year ended December 31, 2001, the amount
not offset was immaterial.

    The Company also uses commodity futures contracts related to forecasted
natural gas requirements. The objective of these futures contracts is to limit
the fluctuations in prices paid and the potential volatility in earnings or cash
flows from future market price movements. During 2001, the Company entered into
commodity futures contracts for approximately 75% of its domestic natural gas
usage (approximately 1.2 billion BTUs) through March 2002. The Company has also
entered into additional contracts in 2002 with respect to its forecasted natural
gas usage through the end of 2002.

                                      F-69

    The Company accounts for the above futures contracts on the balance sheet at
fair value. The effective portion of changes in the fair value of a derivative
that is designated as and meets the required criteria for a cash flow hedge is
recorded in accumulated other comprehensive income ("OCI") and reclassified into
earnings in the same period or periods during which the underlying hedged item
affects earnings. The ineffective portion of the change in the fair value of a
derivative designated as a cash flow hedge is recognized in current earnings.

    The above futures contracts are accounted for as cash flow hedges at
December 31, 2001. Hedge accounting is only applied when the derivative is
deemed to be highly effective at offsetting anticipated cash flows of the hedged
transactions. For hedged forecasted transactions, hedge accounting will be
discontinued if the forecasted transaction is no longer probable to occur, and
any previously deferred gains or losses will be recorded to earnings
immediately.

    During 2001, an unrealized net loss of $2.5 million (net of tax) related to
these commodity futures contracts was included in OCI. There was no
ineffectiveness recognized during the 2001.

    ACCUMULATED OTHER COMPREHENSIVE LOSS.  Foreign currency translation
adjustments and changes in certain derivative balances comprise accumulated
other comprehensive loss. Changes in accumulated other comprehensive loss was as
follows:



                                                              2001       2000       1999
                                                            --------   --------   --------
                                                                         
Balance at beginning of year..............................  $(479.4)   $(343.5)   $(179.9)
Net effect of exchange rate fluctuations..................    (68.6)    (138.7)    (161.5)
Deferred income taxes.....................................      2.6        2.8       (2.1)
Change in certain derivative balances.....................     (2.5)
                                                            -------    -------    -------
Balance at end of year....................................  $(547.9)   $(479.4)   $(343.5)
                                                            =======    =======    =======


    The net effect of exchange rate fluctuations generally reflects changes in
the relative strength of the U.S. dollar against major foreign currencies
between the beginning and end of the year.

    INCOME TAXES.  Deferred income taxes reflect: (1) the net tax effects of
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes and
(2) carryovers and credits for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities at December 31, 2001 and 2000
are as follows (certain amounts from prior year have been reclassified to
conform to current year presentation):



                                                                2001       2000
                                                              --------   --------
                                                                   
Deferred tax assets:
  Tax loss carryovers.......................................  $  19.4    $  15.3
  Other.....................................................    139.8      130.3
                                                              -------    -------
    Total deferred tax assets...............................    159.2      145.6
Deferred tax liabilities:
  Property, plant and equipment.............................    161.8      142.9
  Inventory.................................................     35.8       39.2
  Other.....................................................    117.6       75.7
                                                              -------    -------
    Total deferred tax liabilities..........................    315.2      257.8
                                                              -------    -------
    Net deferred tax liabilities............................  $(156.0)   $(112.2)
                                                              =======    =======


                                      F-70

    Deferred taxes are included in the Consolidated Balance Sheets at
December 31, 2001 and 2000 as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Prepaid expenses............................................  $   5.9    $  36.9
Deferred tax liabilities....................................   (161.9)    (149.1)
                                                              -------    -------
Net deferred tax liabilities................................  $(156.0)   $(112.2)
                                                              =======    =======


    The provision (benefit) for income taxes consists of the following:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Current:
  State.....................................................   $(0.3)     $  0.3     $  1.7
  Foreign...................................................    15.1        87.9       61.8
                                                               -----      ------     ------
                                                                14.8        88.2       63.5
                                                               -----      ------     ------
Deferred:
  U.S. Federal..............................................    30.1       (14.1)      55.5
  State.....................................................     3.6        (4.7)       6.6
  Foreign...................................................    38.8       (45.4)     (16.9)
                                                               -----      ------     ------
                                                                72.5       (64.2)      45.2
                                                               =====      ======     ======
Total:
  U.S. Federal..............................................    30.1       (14.1)      55.5
  State.....................................................     3.3        (4.4)       8.3
  Foreign...................................................    53.9        42.5       44.9
                                                               -----      ------     ------
                                                               $87.3      $ 24.0     $108.7
                                                               =====      ======     ======


    The provision for income taxes was calculated based on the following
components of earnings (loss) before income taxes:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Domestic....................................................   $ 58.3     $(81.4)    $151.3
Foreign.....................................................    118.0      146.0      148.3
                                                               ------     ------     ------
                                                               $176.3     $ 64.6     $299.6
                                                               ------     ------     ------


    Income taxes paid in cash were as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Domestic....................................................   $ 0.2      $ 0.5      $ 0.3
Foreign.....................................................    45.7       44.3       47.1
                                                               -----      -----      -----
                                                               $45.9      $44.8      $47.4
                                                               =====      =====      =====


                                      F-71

    A reconciliation of the provision for income taxes based on the statutory
U.S. Federal tax rate of 35% to the provision for income taxes is as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Pretax earnings at statutory U.S. Federal tax rate..........   $61.7      $22.6      $104.9
Increase (decrease) in provision for income taxes due to:
  Amortization of goodwill..................................    15.1       15.6        16.6
  State taxes, net of federal benefit.......................     2.1       (2.9)        5.5
  Foreign earnings at different rates.......................    (3.4)      (9.3)      (17.0)
  Adjustment for non-U.S. tax law changes...................     6.0       (9.3)
  Other items...............................................     5.8        7.3        (1.3)
                                                               -----      -----      ------
Provision for income taxes..................................   $87.3      $24.0      $108.6
                                                               =====      =====      ======
Effective tax rate..........................................    49.5%      37.2%       36.3%
                                                               =====      =====      ======


    The Company is included with OI Inc.'s consolidated tax returns. OI Inc. has
net operating losses, alternative minimum tax credits, and research and
development credits available to offset future U.S. Federal income tax.

    At December 31, 2001, the Company's equity in the undistributed earnings of
foreign subsidiaries for which income taxes had not been provided approximated
$529.9 million. It is not practicable to estimate the U.S. and foreign tax which
would be payable should these earnings be distributed.

    RELATED PARTY TRANSACTIONS.  Charges for administrative services are
allocated to the Company by OI Inc. based on an annual utilization level. Such
services include compensation and benefits administration, payroll processing,
use of certain general accounting systems, auditing, income tax planning and
compliance, and treasury services. Management believes that such transactions
are on terms no less favorable to the Company than those that could be obtained
from unaffiliated third parties. The following information summarizes the
Company's significant related party transactions:



                                                                 YEARS ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Revenues:
  Sales to affiliated companies.............................   $ 1.0      $ 3.1      $ 4.3
                                                               =====      =====      =====
Expenses:
  Administrative services...................................    18.5       21.5       19.2
  Corporate management fee..................................    16.3       17.9       18.1
                                                               -----      -----      -----
Total expenses..............................................   $34.8      $39.4      $37.3
                                                               =====      =====      =====


    The above expenses are recorded in the statement of operations as follows:



                                                                 YEARS ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Cost of sales...............................................   $16.4      $19.2      $17.0
Selling, general, and administrative expenses...............    18.4       20.2       20.3
                                                               -----      -----      -----
Total expenses..............................................   $34.8      $39.4      $37.3
                                                               =====      =====      =====


    Intercompany interest is charged to the Company from OI Inc. based on
intercompany debt balances. Intercompany interest expense is calculated using a
weighted average interest rate of external borrowings by OI Inc.

                                      F-72

    PARTICIPATION IN OI INC. STOCK OPTION PLANS.  The Company participates in
the stock option plans of OI Inc. under which employees of the Company may be
granted options to purchase common shares of OI Inc. No options may be exercised
in whole or in part during the first year after the date granted. In general,
subject to certain accelerated exercisability provisions, 50% of the options
become exercisable on the fifth anniversary of the date of the option grant,
with the remaining 50% becoming exercisable on the sixth anniversary date of the
option grant. In general, options expire following termination of employment or
the day after the tenth anniversary date of the option grant.

    All options have been granted at prices equal to the market price of the
OI Inc.'s common stock on the date granted. Accordingly, the Company recognizes
no compensation expense related to the stock option plans. OI Inc. has adopted
the disclosure-only provisions of Statement of Financial Accounting Standards
(SFAS) No. 123, "Accounting for Stock-Based Compensation."

    A substantial number of the options have been granted to key employees of
another subsidiary of OI Inc., some of whose compensation costs are included in
an allocation of costs to all operating subsidiaries of OI Inc., including the
Company. It is not practical to determine an amount of additional compensation
allocable to the Company if OI Inc. had elected to recognize compensation cost
based on the fair value of the options granted at grant date as allowed by SFAS
No. 123.

    PENSION BENEFIT PLANS.  The Company participates in OI Inc.'s pension plans
for substantially all employees located in the United States. Benefits generally
are based on compensation for salaried employees and on length of service for
hourly employees. OI Inc.'s policy is to fund pension plans such that sufficient
assets will be available to meet future benefit requirements. Independent
actuaries determine pension costs for each subsidiary of OI Inc. included in the
plans; however, accumulated benefit obligation information and plan assets
pertaining to each subsidiary have not been separately determined. As such, the
accumulated benefit obligation and the plan assets related to the pension plans
for domestic employees have been retained by another subsidiary of OI Inc. Net
credits to results of operations for the Company's allocated portion of the
domestic pension costs amounted to $77.1 million in 2001, $82.9 million in 2000,
and $67.2 million in 1999.

    On October 1, 2001, the Company completed the acquisition of the Canadian
glass container assets of Consumers Packaging Inc. As part of the transaction,
the Company assumed certain of the pension liabilities of Consumers Packaging.
The information below includes the activity of these pension plans from
October 1, 2001 through December 31, 2001.

    The Company's subsidiaries in the United Kingdom, Australia and Canada also
have pension plans covering substantially all employees. The following tables
relate to the Company's principal United Kingdom, Australian and Canadian
pension plans (the International Pension Plans).

    The changes in the International Pension Plans benefit obligations for the
year were as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Obligations at beginning of year............................   $392.7     $400.5
Change in benefit obligations:
  Service cost..............................................      9.3        9.1
  Interest cost.............................................     22.9       22.3
  Actuarial (gain) loss.....................................    (13.1)       6.9
  Acquisitions..............................................    170.0
  Benefit payments..........................................    (25.5)     (24.6)
  Other.....................................................    (11.9)     (21.5)
                                                               ------     ------
    Net increase (decrease) in benefit obligations..........    151.7       (7.8)
                                                               ------     ------
Obligations at end of year..................................   $544.4     $392.7
                                                               ======     ======


                                      F-73

    The changes in the fair value of the International Pension Plans' assets for
the year were as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Fair value at beginning of year.............................   $416.1     $459.5
Change in fair value:
  Actual return (loss) on plan assets.......................    (26.6)       9.2
  Benefit payments..........................................    (25.5)     (24.6)
  Acquisitions..............................................    119.9
  Other.....................................................     (3.3)     (28.0)
                                                               ------     ------
    Net increase (decrease) in fair value of assets.........     64.5      (43.4)
                                                               ------     ------
Fair value at end of year...................................   $480.6     $416.1
                                                               ======     ======


    The funded status of the International Pension Plans at year end was as
follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Plan assets at fair value...................................   $480.6     $416.1
Projected benefit obligations...............................    544.4      392.7
                                                               ------     ------
  Funded status of the plans................................    (63.8)      23.4
Net unrecognized items:
  Actuarial loss............................................     46.7        1.7
  Prior service cost........................................     12.4       16.1
                                                               ------     ------
                                                                 59.1       17.8
                                                               ------     ------
Net prepaid (accrued) pension...............................   $ (4.7)    $ 41.2
                                                               ======     ======


    The net prepaid (accrued) pension is included in the Consolidated Balance
Sheets at December 31, 2001 and 2000 as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Prepaid pension.............................................   $ 49.8     $41.2
Other liabilities...........................................    (54.5)
                                                               ------     -----
                                                               $ (4.7)    $41.2
                                                               ======     =====


    The components of the International Pension Plans' net pension expense
(credit) for the year were as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Service cost................................................   $  9.3     $  9.1     $  8.7
Interest cost...............................................     22.9       22.3       20.3
Expected asset return.......................................    (36.8)     (35.9)     (26.2)
Amortization:
  Prior service cost........................................      1.2        0.8        1.0
  Gain......................................................                (0.1)
                                                               ------     ------     ------
    Net amortization........................................      1.2        0.7        1.0
                                                               ------     ------     ------
Net expense (credit)........................................   $ (3.4)    $ (3.8)    $  3.8
                                                               ======     ======     ======


                                      F-74

    The following selected information is for plans with benefit obligations in
excess of the fair value of plan assets:



                                                                2001
                                                              --------
                                                           
Benefit obligations at the end of the year..................   $484.7
Fair value of plan assets at the end of the year............    411.8
                                                               ======


    The following information is for plans with accumulated benefit obligations
in excess of the fair value of plan assets:



                                                                2001
                                                              --------
                                                           
Accumulated benefit obligations at the end of the year......   $145.8
Fair value of plan assets at the end of the year............    131.5
                                                               ======


    For the International Pension Plans, the actuarial present value of benefit
obligations is based on a weighted discount rate of approximately 6.00% for 2001
and 5.25% for 2000. Future benefits are assumed to increase in a manner
consistent with past experience of the plans, which, to the extent benefits are
based on compensation, includes assumed salary increases on a weighted scale of
approximately 4.00% for 2001 and 2000. The expected weighted long-term rate of
return on assets was approximately 8.50% for 2001, 7.75% for 2000, and 6.75% for
1999. Amortization included in net pension credits is based on the average
remaining service of employees. Plan assets include marketable equity
securities, government and corporate debt securities, real estate and commingled
funds.

    OI Inc. also sponsors several defined contribution plans for all salaried
and hourly U.S. employees of the Company. Participation is voluntary and
participants' contributions are based on their compensation. OI Inc. matches
substantially all plan participants' contributions up to various limits.
OI Inc. charges the Company for its share of the match. The Company's share of
the contributions to these plans amounted to $4.8 million in 2001, $5.6 million
in 2000, and $5.8 million in 1999.

    POSTRETIREMENT BENEFITS OTHER THAN PENSIONS.  OI Inc. provides certain
retiree health care and life insurance benefits covering substantially all U.S.
salaried and certain hourly employees. Employees are generally eligible for
benefits upon retirement and completion of a specified number of years of
creditable service. Independent actuaries determine postretirement benefit costs
for each subsidiary of OI Inc.; however, accumulated postretirement benefit
obligation information pertaining to each subsidiary has not been separately
determined. As such, the accumulated postretirement benefit obligation has been
retained by another subsidiary of OI Inc.

    The Company's net periodic postretirement benefit cost, as allocated by
OI Inc., for domestic employees was $4.8 million, $4.2 million, and
$4.8 million at December 31, 2001, 2000, and 1999, respectively.

    On October 1, 2001, the Company completed the acquisition of the Canadian
glass container assets of Consumers Packaging Inc. The information below is the
activity of the Canadian related

                                      F-75

retiree health care plan from October 1, 2001 through December 31, 2001. The
changes in the Canadian postretirement benefit obligations were as follows:



                                                                2001
                                                              --------
                                                           
Obligations at beginning of year............................   $  --
Change in benefit obligations:
  Service cost..............................................     0.1
  Interest cost.............................................     0.5
  Actuarial loss............................................     0.1
  Acquisition...............................................    31.2
  Benefit payments..........................................    (0.2)
                                                               -----
    Net change in benefit obligations.......................    31.7
                                                               -----
Obligations at end of year..................................   $31.7
                                                               =====


    The funded status of the Canadian postretirement benefit plans at year end
was as follows:



                                                                2001
                                                              --------
                                                           
Accumulated postretirement benefit obligations..............   $31.7
Net unrecognized items:
  Prior service credits.....................................      --
  Actuarial loss............................................    (0.1)
                                                               -----
                                                                (0.1)
                                                               -----
Nonpension postretirement benefit obligations...............   $31.6
                                                               =====


    The Company's nonpension postretirement benefit obligations are included
with other long term liabilities on the balance sheet.

    The components of the Canadian net postretirement benefit cost were as
follows:



                                                                2001
                                                              --------
                                                           
Service cost................................................    $0.1
Interest cost...............................................     0.5
                                                                ----
Net postretirement benefit cost.............................    $0.6
                                                                ====


    Assumed health care cost inflation was based on a rate of 9.00% in 2001,
declining to an ultimate rate of 5.50%. A one percentage point decrease in the
rate would have decreased the accumulated postretirement benefit obligation at
December 31, 2001 by $4.1 million and decreased the net postretirement benefit
cost for 2001 by $0.1 million. A one percentage point increase in the rate would
have increased the accumulated postretirement benefit obligation at
December 31, 2001 by $5.1 million and increased the net postretirement benefit
cost for 2001 by $0.1 million. The assumed weighted average discount rate used
in determining the accumulated postretirement benefit obligation was 6.50% at
December 31, 2001.

    Benefits provided by OI Inc. for certain of the hourly retirees of the
Company are determined by collective bargaining. Most other domestic hourly
retirees receive health and life insurance benefits from a multi-employer trust
established by collective bargaining. Payments to the trust as required by the
bargaining agreements are based upon specified amounts per hour worked and were
$6.3 million in 2001, $7.5 million in 2000, and $8.0 million in 1999.
Postretirement health and life benefits for retirees of foreign affiliates are
generally provided through the national health care programs of the countries in
which the affiliates are located.

                                      F-76

    OTHER REVENUE.  Other revenue for the year ended December 31, 2001 includes
$10.3 million from the sale of a minerals business in Australia. Other revenue
for the year ended December 31, 1999 includes gains totaling $40.8 million
related to the sales of a U.S. glass container plant and a mold manufacturing
business in Colombia.

    OTHER COSTS AND EXPENSES.  Other costs and expenses for the year ended
December 31, 2001 include pretax charges of $96.2 million related to the
following: (1) charges of $65.2 million principally related to a restructuring
program and impairment at certain of the Company's international and domestic
operations. The charge includes the impairment of assets at the Company's
affiliate in Puerto Rico and the consolidation of manufacturing capacity and the
closing of a facility in Venezuela. The program also includes consolidation of
capacity at certain other international and domestic facilities in response to
decisions about pricing and market strategy; and (2) a charge of $31.0 million
related to the loss on the sale of the Company's facilities in India; The
Company expects its actions related to the restructuring and impairment charges
to be completed during the next several quarters.

    Other costs and expenses for the year ended December 31, 2000 include
charges of $186.0 million principally related to a restructuring and capacity
realignment program. The program, initiated in the third quarter of 2000,
includes the consolidation of manufacturing capacity and a reduction of 175
employees in the U.S. salaried work force, or about 15%, principally as a result
of early retirement incentives. Also included in the program are a write-down of
plant and equipment for the Company's glass container affiliate in India and
certain other asset write-offs. Charges for manufacturing capacity
consolidations of $120.4 million principally involve U.S. glass container
facilities and reflect technology-driven improvements in productivity,
conversions from some juice and similar products to plastic containers, Company
and customer decisions regarding pricing and volume, and the further
concentration of production in the most strategically-located facilities. The
Company expects that it will continue to make cash payments over the next
several quarters for benefits and on-going closing costs related to the closing
of these facilities.

    As a result of reducing the U.S. salaried workforce in 2000, the Company
recognized a settlement gain of approximately $24 million related to its defined
benefit pension plan. This gain has been included in the net charge of
$22.0 million for early retirement incentives and special termination benefits.

    The 2000 pretax charge of $40.0 million was related to the write-down of
property, plant, and equipment in India. Based on the Company's expectation of
future net cash flows of its affiliate in India, the related property, plant,
and equipment was written down to realizable values in accordance with Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of."

                                      F-77

    Selected information relating to the restructuring accruals follows:



                                                              EARLY      WRITE-DOWN
                                                           RETIREMENT        OF
                                                           INCENTIVES     IMPAIRED
                                                           AND SPECIAL   PROPERTY,
                                             CAPACITY      TERMINATION   PLANT AND
                                          REALIGNMENT(A)    BENEFITS     EQUIPMENT     OTHER      TOTAL
                                          --------------   -----------   ----------   --------   --------
                                                                                  
2000 restructuring charges..............     $ 120.4         $ 22.0        $ 40.0      $ 3.6     $ 186.0
Write-down of assets to net realizable
  value.................................       (48.4)                       (40.0)      (3.6)      (92.0)
Reduction of OI Inc. prepaid pension
  asset.................................       (13.0)         (18.2)                               (31.2)
Increase in OI Inc. nonpension
  postretirement benefit liability......        (0.6)          (3.2)                                (3.8)
Net cash paid...........................        (1.2)          (0.2)                                (1.4)
                                             -------         ------        ------      -----     -------
Remaining liabilities at December 31,
  2000..................................        57.2            0.4            --         --        57.6
2001 restructuring charges..............        23.5                         41.7                   65.2
Write-down of assets to net realizable
  value.................................       (33.7)                       (41.7)                 (75.4)
Net cash paid...........................       (24.2)          (0.4)                               (24.6)
                                             -------         ------        ------      -----     -------
Remaining liabilities at December 31,
  2001..................................     $  22.8         $   --        $   --      $  --     $  22.8
                                             =======         ======        ======      =====     =======


- ------------------------

(a) Capacity realignment includes charges for plant closing costs, severance
    benefits, and write-downs of assets for disposal or abandonment as a result
    of restructuring of manufacturing capacity. Write-downs of assets represent
    the majority of the charges for 2001.

    Other costs and expenses for the year ended December 31, 1999 include
charges totaling $20.8 million related principally to restructuring costs and
write-offs of certain assets in Europe and South America.

    GEOGRAPHIC INFORMATION.  The Company operates in the rigid packaging
industry. The Company has one primary reportable product segment within the
rigid packaging industry: Glass Containers. The Glass Containers segment
includes operations in North America, Europe, the Asia Pacific region, and South
America.

    The Company evaluates performance and allocates resources based on earnings
before interest income, interest expense, provision for income taxes, minority
share owners' interests in earnings of subsidiaries, and extraordinary charges
(collectively "EBIT") excluding unusual items. Net sales as shown in the
geographic segment information are based on the location of the Company's
affiliate which recorded the sales.

                                      F-78

    Financial information regarding the Company's geographic segments is as
follows:



                                                                                               TOTAL
                                                 NORTH                   ASIA      SOUTH     GEOGRAPHIC
                                               AMERICA(A)    EUROPE    PACIFIC    AMERICA     SEGMENTS
                                               ----------   --------   --------   --------   ----------
                                                                              
Net sales:
  2001.......................................   $1,662.2     $909.7     $660.6     $516.9     $3,749.4
  2000.......................................    1,742.4      894.0      760.7      494.5      3,891.6
  1999.......................................    1,772.0      965.6      815.0      412.6      3,965.2
                                                ========     ======     ======     ======     ========
EBIT, excluding unusual items:
  2001.......................................   $  306.2     $ 93.2     $102.2     $ 91.6     $  593.2
  2000.......................................      311.8       81.9      123.9       77.2        594.8
  1999.......................................      333.8       97.9      135.0       29.9        596.6
                                                ========     ======     ======     ======     ========
Unusual items:
  2001:
    Gain on the sale of a minerals business
      in Australia...........................                           $ 10.3                $   10.3
    Restructuring and impairment charges.....   $  (35.1)    $ (6.1)      (0.8)    $(23.2)       (65.2)
    Special employee benefit programs........       (4.4)      (0.7)      (2.3)      (0.2)        (7.6)
    Loss on the sale of the Company's
      facilities in India....................                            (31.0)                  (31.0)
  2000:
    Charges related to consolidation of
      manufacturing capacity.................     (124.0)                             3.6       (120.4)
    Charges related to early retirement
      incentives and special termination
      benefits...............................      (22.0)                                        (22.0)
    Charges related to impairment of
      property, plant, and equipment in
      India..................................                            (40.0)                  (40.0)
    Other....................................                                        (3.6)        (3.6)
  1999:
    Gains related to the sales of two
      manufacturing facilities...............       30.8                             10.0         40.8
    Charges related principally to
      restructuring costs and write-offs of
      certain assets in Europe and South
      America................................                 (10.8)                (10.0)       (20.8)


- ------------------------

(a) One customer accounted for 11.5%, 10.9%, and 10.3% of the Company's sales in
    2001, 2000, and 1999 respectively.

    The Company's net fixed assets by location are as follows:



                                                            UNITED
                                                            STATES    FOREIGN     TOTAL
                                                           --------   --------   --------
                                                                        
2001.....................................................   $605.0    $1,498.3   $2,103.3
2000.....................................................    612.6     1,510.3    2,122.9
1999.....................................................    676.7     1,631.1    2,307.8
                                                            ======    ========   ========


                                      F-79

    Reconciliations to consolidated totals are as follows:



                                                           2001       2000       1999
                                                         --------   --------   --------
                                                                      
Revenues:
  Net sales............................................  $3,749.4   $3,891.6   $3,965.2
  Royalties and net technical assistance...............      17.2       17.9       21.3
  Equity earnings......................................      18.9       18.7       21.0
  Interest.............................................      22.3       27.5       22.4
  Other................................................      33.8       41.4       65.3
                                                         --------   --------   --------
  Total................................................  $3,841.6   $3,997.1   $4,095.2
                                                         ========   ========   ========
Reconciliation of EBIT to earnings before income taxes
  and minority share owners' interests in earnings of
  subsidiaries:
  EBIT, excluding unusual items........................  $  593.2   $  594.8   $  596.6
  Unusual items........................................     (93.5)    (186.0)      20.0
  Net interest expense.................................    (323.4)    (344.2)    (317.0)
                                                         --------   --------   --------
  Total................................................  $  176.3   $   64.6   $  299.6
                                                         ========   ========   ========


                                      F-80

                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Share Owner
OI Plastic Products FTS Inc.

    We have audited the accompanying consolidated balance sheets of OI Plastic
Products FTS Inc. as of December 31, 2001 and 2000, and the related consolidated
statements of results of operations, net Parent investment, and cash flows for
each of the three years in the period ended December 31, 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of OI Plastic
Products FTS Inc. at December 31, 2001 and 2000, and the consolidated results of
its operations and its cash flows for each of the three years in the period
ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States.

                                          Ernst & Young LLP

Toledo, Ohio
January 24, 2002

                                      F-81

                          OI PLASTIC PRODUCTS FTS INC.

                       CONSOLIDATED RESULTS OF OPERATIONS

                             (MILLIONS OF DOLLARS)



                                                                 YEARS ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Revenues:
  Net sales.................................................  $1,661.1   $1,668.4   $1,558.7
  Other revenue.............................................      14.9       11.3       12.4
                                                              --------   --------   --------
                                                               1,676.0    1,679.7    1,571.1
Costs and expenses:
  Manufacturing, shipping, and delivery.....................   1,288.9    1,287.6    1,144.0
  Research and development..................................      30.7       31.6       24.7
  Engineering...............................................       1.4        0.3        6.8
  Selling and administrative................................      70.2       68.5       69.2
  Net intercompany interest.................................      55.5      103.2       87.0
  Other interest expense....................................      38.6        2.7        3.8
  Other.....................................................      88.8       67.2       55.1
                                                              --------   --------   --------
                                                               1,574.1    1,561.1    1,390.6
                                                              --------   --------   --------
Earnings before items below.................................     101.9      118.6      180.5
Provision for income taxes..................................      53.3       60.5       83.8
Minority share owners' interests in earnings of
  subsidiaries..............................................       0.5        1.4        2.0
                                                              --------   --------   --------
Net earnings................................................  $   48.1   $   56.7   $   94.7
                                                              ========   ========   ========


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-82

                          OI PLASTIC PRODUCTS FTS INC.

                          CONSOLIDATED BALANCE SHEETS

                             (MILLIONS OF DOLLARS)

                                     ASSETS



                                                                 DECEMBER 31,
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
                                                                   
CURRENT ASSETS:
  Cash......................................................  $   10.3   $   34.2
  Receivables including amount from related parties of $9.2
    ($8.7 in 2000), less allowances of $38.2 ($29.2 in 2000)
    for losses and discounts................................     184.3      192.0
  Inventories...............................................     222.9      249.2
  Prepaid expenses..........................................      41.1       24.7
                                                              --------   --------
    Total current assets....................................     458.6      500.1
OTHER ASSETS:
  Equity investments........................................       9.2       14.2
  Repair parts inventories..................................      25.6       30.4
  Deposits, receivables, and other assets...................      95.9       95.3
  Excess of purchase cost over net assets acquired, net of
    accumulated amortization of $440.2 ($394.7 in 2000).....   1,468.2    1,523.6
                                                              --------   --------
    Total other assets......................................   1,598.9    1,663.5
PROPERTY, PLANT, AND EQUIPMENT:
  Land, at cost.............................................      28.7       29.3
  Buildings and equipment, at cost:
    Buildings and building equipment........................     212.8      223.6
    Factory machinery and equipment.........................   1,522.6    1,474.8
    Transportation, office, and miscellaneous equipment.....      22.5       19.4
    Construction in progress................................     131.1      128.5
                                                              --------   --------
                                                               1,917.7    1,875.6
  Less accumulated depreciation.............................     799.3      759.8
                                                              --------   --------
    Net property, plant, and equipment......................   1,118.4    1,115.8
                                                              --------   --------
Total assets................................................  $3,175.9   $3,279.4
                                                              ========   ========


                                      F-83

                          OI PLASTIC PRODUCTS FTS INC.

                    CONSOLIDATED BALANCE SHEETS (CONTINUED)

                             (MILLIONS OF DOLLARS)

                     LIABILITIES AND NET PARENT INVESTMENT



                                                                 DECEMBER 31,
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
                                                                   
CURRENT LIABILITIES:
  Short-term loans..........................................             $    8.3
  Accounts payable including amount to related parties of
    $12.3 ($8.0 in 2000)....................................  $  105.9      114.5
  Salaries and wages........................................      18.2       17.5
  U.S. and foreign income taxes.............................      10.8       13.2
  Other accrued liabilities.................................      47.6       13.6
  Long-term debt due within one year........................       4.9        4.6
                                                              --------   --------
    Total current liabilities...............................     187.4      171.7
EXTERNAL LONG-TERM DEBT.....................................     851.3        7.2
DEFERRED TAXES..............................................     172.6      173.4
OTHER LIABILITIES...........................................      12.9        1.9
MINORITY SHARE OWNERS' INTERESTS............................                  8.3
NET PARENT INVESTMENT
  Investment by and advances from parent....................   1,980.0    2,944.1
  Accumulated other comprehensive loss......................     (28.3)     (27.2)
                                                              --------   --------
    Total net Parent investment.............................   1,951.7    2,916.9
                                                              --------   --------
Total liabilities and net Parent investment.................  $3,175.9   $3,279.4
                                                              ========   ========


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-84

                          OI PLASTIC PRODUCTS FTS INC.

                       CONSOLIDATED NET PARENT INVESTMENT

                             (MILLIONS OF DOLLARS)



                                                                 YEARS ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
INVESTMENT BY AND ADVANCES TO PARENT
  Balance at beginning of year..............................  $2,944.1   $2,884.7   $2,742.0
  Net intercompany transactions.............................  (1,012.2)       4.5       48.0
  Net earnings..............................................      48.1       56.7       94.7
  Net loss for the month ended December 31, 2000 for the
    change in the fiscal year end of certain international
    affiliates..............................................                 (1.8)
                                                              --------   --------   --------
    Balance at end of year..................................   1,980.0    2,944.1    2,884.7
                                                              ========   ========   ========
ACCUMULATED OTHER COMPREHENSIVE LOSS
  Balance at beginning of year..............................     (27.2)     (25.0)      (9.7)
  Foreign currency translation adjustments..................      (1.1)      (2.2)     (15.3)
                                                              --------   --------   --------
    Balance at end of year..................................     (28.3)     (27.2)     (25.0)
                                                              ========   ========   ========
Total net Parent investment.................................  $1,951.7   $2,916.9   $2,859.7
                                                              ========   ========   ========
TOTAL COMPREHENSIVE INCOME (LOSS)
  Net earnings..............................................  $   48.1   $   56.7   $   94.7
  Foreign currency translation adjustments..................      (1.1)      (2.2)     (15.3)
                                                              --------   --------   --------
    Total...................................................  $   47.0   $   54.5   $   79.4
                                                              ========   ========   ========


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-85

                          OI PLASTIC PRODUCTS FTS INC.

                            CONSOLIDATED CASH FLOWS

                             (MILLIONS OF DOLLARS)



                                                                 YEARS ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
OPERATING ACTIVITIES:
  Net earnings..............................................  $   48.1    $ 56.7     $ 94.7
  Non-cash charges (credits):
    Depreciation............................................     111.2     107.6       97.6
    Amortization of deferred costs..........................      60.9      60.3       63.7
    Deferred tax provision..................................      42.9      51.9       75.5
    Restructuring costs and write-offs of certain assets....      33.3      26.6
    (Gains) losses on asset sales...........................      (2.8)                 4.0
    Other...................................................     (10.9)    (17.9)     (10.5)
  Change in non-current operating assets....................      (1.7)     (7.4)      (8.9)
  Reduction of non-current liabilities......................                (0.2)      (1.4)
  Change in components of working capital...................      35.7     (83.2)     (10.0)
                                                              --------    ------     ------
    Cash provided by operating activities...................     316.7     194.4      304.7
INVESTING ACTIVITIES:
  Additions to property, plant and equipment................    (164.0)   (176.4)    (192.3)
  Acquisitions, net of cash acquired........................     (15.6)
  Net cash proceeds from divestitures and other.............      66.7       4.8        9.2
                                                              --------    ------     ------
    Cash utilized in investing activities...................    (112.9)   (171.6)    (183.1)
FINANCING ACTIVITIES:
  Net change in intercompany debt...........................  (1,049.5)      3.5     (103.3)
  Additions to long-term debt...............................     850.4       1.5        1.6
  Payment of finance fees...................................     (14.9)
  Decrease in short-term loans..............................      (8.7)     (3.4)      (4.8)
  Repayments of long-term debt..............................      (6.8)    (10.5)      (6.9)
                                                              --------    ------     ------
    Cash utilized in financing activities...................    (229.5)     (8.9)    (113.4)
  Effect of exchange rate fluctuations on cash..............       1.8      (0.4)      (1.0)
  Effect of change in fiscal year end for certain
    international affiliates................................                 1.2
                                                              --------    ------     ------
Increase (decrease) in cash.................................     (23.9)     14.7        7.2
Cash at beginning of year...................................      34.2      19.5       12.3
                                                              --------    ------     ------
Cash at end of year.........................................  $   10.3    $ 34.2     $ 19.5
                                                              ========    ======     ======


  See accompanying Statement of Significant Accounting Policies and Financial
                                    Review.

                                      F-86

                  STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

    BASIS OF CONSOLIDATED STATEMENTS.  The consolidated financial statements of
OI Plastic Products FTS Inc. ("Company") include the accounts of its
subsidiaries. During January 2002, OI Closure FTS, Inc, another subsidiary of
Owens-Illinois Inc., was merged into the Company. Since both entities were under
common control of Owens-Illinois Inc., the consolidated statement of operations,
net parent investment, and cash flows for each of the three years ended
December 31, 2001 and the consolidated balance sheets at December 31, 2001 and
2000 include OI Closure FTS, Inc. for all periods at historical cost. Newly
acquired subsidiaries have been included in the consolidated financial
statements from dates of acquisition. Prior to December 2000, substantially all
of the Company's consolidated foreign subsidiaries reported their results of
operations on a one-month lag, which allowed additional time to compile the
results. Beginning in December 2000, the one-month lag was eliminated. As a
result, the December 2000 results of operations for these subsidiaries, which
amounted to a net loss of $1.8 million, was recorded directly to retained
earnings in December 2000.

    The Company uses the equity method of accounting for investments in which it
has a significant ownership interest, generally 20% to 50%. Other investments
are accounted for at cost.

    RELATIONSHIP WITH OWENS-ILLINOIS, INC. AND OWENS-ILLINOIS, GROUP INC.  The
Company is a wholly-owned subsidiary of Owens-Illinois Group, Inc. ("OI Group")
and an indirect subsidiary of Owens-Illinois, Inc. ("OI Inc."). Although
OI Inc. does not conduct any operations, it has substantial obligations related
to outstanding indebtedness, dividends for preferred stock and asbestos-related
payments. OI Inc. relies primarily on distributions from its direct and indirect
subsidiaries to meet these obligations.

    For federal and certain state income tax purposes, the taxable income of the
Company is included in the consolidated tax returns of OI Inc. and income taxes
are allocated to the Company on a basis consistent with separate returns.
Current income taxes are recorded by the Company on a basis consistent with
separate returns.

    NATURE OF OPERATIONS.  The Company is a leading manufacturer of plastics
packaging products. The Company's principal product lines are plastic
containers, closures and plastic prescription containers. The Company's
principal operations are in North America, however, the Company does have minor
operations in Europe and South America. Major markets include the United States
household products, personal care products, health care products, and food and
beverage industries. One customer accounted for 18.0%, 13.0%, and 12.1% of the
Company's sales in 2001, 2000, and 1999 respectively.

    USE OF ESTIMATES.  The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires
management of the Company to make estimates and assumptions that affect certain
amounts reported in the financial statements and accompanying notes. Actual
results may differ from those estimates, at which time the Company would revise
its estimates accordingly.

    CASH.  The Company defines "cash" as cash and time deposits with maturities
of three months or less when purchased.

    FAIR VALUES OF FINANCIAL INSTRUMENTS.  The carrying amounts reported for
cash, short-term investments and short-term loans approximate fair value. In
addition, carrying amounts approximate fair value for certain long-term debt
obligations subject to frequently redetermined interest rates. The Company is
not a party to any material derivative financial instruments.

    INVENTORY VALUATION.  The Company values most U.S. inventories at the lower
of last-in, first-out (LIFO) cost or market. Other inventories are valued at the
lower of standard costs (which approximate average costs) or market.

                                      F-87

    EXCESS OF PURCHASE COST OVER NET ASSETS ACQUIRED.  Through December 31,
2001, the excess of purchase cost over net assets acquired was being amortized
over 40 years. The Company evaluated the recoverability of long-lived assets
based on undiscounted projected cash flows, excluding interest and taxes, when
factors indicated that an impairment may have existed. (See "New Accounting
Standards").

    PROPERTY, PLANT, AND EQUIPMENT.  In general, depreciation is computed using
the straight-line method. Renewals and improvements are capitalized. Maintenance
and repairs are expensed as incurred.

    REVENUE RECOGNITION.  The Company recognizes sales, net of estimated
discounts and allowances, when title to products is transferred to customers.
Shipping and handling costs are included with manufacturing, shipping, and
delivery costs.

    INCOME TAXES ON UNDISTRIBUTED EARNINGS.  In general, the Company plans to
continue to reinvest the undistributed earnings of foreign subsidiaries and
foreign corporate joint ventures accounted for by the equity method.
Accordingly, taxes are provided only on that amount of undistributed earnings in
excess of planned reinvestments.

    FOREIGN CURRENCY TRANSLATION.  The assets and liabilities of most affiliates
and associates are translated at current exchange rates and any related
translation adjustments are recorded directly in share owners' equity. The
Company's affiliate located in Venezuela operates in a highly inflationary
economy. In such cases, certain assets of this affiliate are translated at
historical exchange rates and all translation adjustments are reflected in the
statements of consolidated results of operations.

    NEW ACCOUNTING STANDARDS.  In July 2001, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 141, "Business
Combinations" which is effective for business combinations completed after
June 30, 2001. Also in July 2001, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" ("FAS No. 142"), which is effective for goodwill acquired
after June 30, 2001. For goodwill acquired prior to July 1, 2001, FAS No. 142
will be effective for fiscal years beginning after December 15, 2001. Under FAS
No. 142, goodwill and intangible assets with indefinite lives will no longer be
amortized but will be reviewed annually (or more frequently if impairment
indicators arise) for impairment.

    The Company estimates that adopting FAS No. 142 will increase 2002 earnings
before the effects of the accounting change by approximately $45 million. The
Company has not completed its assessment of the effects that adopting FAS
No. 142 will have on the reported value of goodwill, however, the Company
expects that it will record an impairment charge in 2002 in connection with
adopting FAS No. 142.

    In October 2001, the Financial Accounting Standards Board ("FASB") issued
Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets" ("FAS No. 144"). FAS No. 144 supersedes FASB Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of" ("FAS No. 121"). FAS No. 144 provides additional guidance on
estimating cash flows when performing a recoverability test, requires that a
long-lived asset (group) to be disposed of other than by sale (e.g. abandoned)
be classified as "held and used" until it is disposed of, and establishes more
restrictive criteria to classify an asset (group) as "held for sale"; however,
it retains the fundamental provisions of FAS No. 121 related to the recognition
and measurement of the impairment of long-lived assets to be "held and used."
FAS No. 144 is effective for fiscal years beginning after December 15, 2001 and
transition is prospective for committed disposal activities that are initiated
after the effective date of FAS No. 144's initial application. The impact of
adopting FAS No. 144 on the Company's reporting and disclosure is not expected
to be material to the Company's financial position or results of operations.

                                      F-88

                                FINANCIAL REVIEW
                      TABULAR DATA IN MILLIONS OF DOLLARS.

    CHANGES IN COMPONENTS OF WORKING CAPITAL RELATED TO OPERATIONS.  Changes in
the components of working capital related to operations (net of the effects
related to acquisitions and divestitures) were as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Decrease (increase) in current assets:
  Receivables...............................................   $ (2.6)    $  1.5     $(39.2)
  Inventories...............................................     20.0      (31.6)     (34.8)
  Prepaid expenses..........................................      3.4        2.7       (2.3)
Increase (decrease) in current liabilities:
  Accounts payable and accrued liabilities..................     19.2       (6.9)      12.5
  Salaries and wages........................................      2.0       (0.1)       0.6
  U.S. and foreign income taxes.............................     (6.3)     (48.8)      53.2
                                                               ------     ------     ------
                                                               $ 35.7     $(83.2)    $(10.0)
                                                               ======     ======     ======


    INVENTORIES.  Major classes of inventory are as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Finished goods..............................................   $133.7     $157.4
Work in process.............................................      0.3        3.8
Raw materials...............................................     71.7       72.6
Operating supplies..........................................     17.2       15.4
                                                               ------     ------
                                                               $222.9     $249.2
                                                               ======     ======


    If the inventories which are valued on the LIFO method had been valued at
standard costs, which approximate current costs, consolidated inventories would
be higher than reported by $5.2 million and $10.5 million at December 31, 2001
and 2000, respectively.

    Inventories which are valued at the lower of standard costs (which
approximate average costs), or market at December 31, 2001 and 2000 were
approximately $34.0 million and $33.4 million, respectively.

    EXTERNAL LONG-TERM DEBT.  The following table summarizes the external
long-term debt of the Company at December 31, 2001 and 2000:



                                                                  DECEMBER 31
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
                                                                   
Secured Credit Agreement:
  Revolving Credit Facility.................................   $850.0
Other.......................................................      6.2     $11.8
                                                               ------     -----
                                                                856.2      11.8
Less amounts due within one year............................      4.9       4.6
                                                               ------     -----
  External long-term debt...................................   $851.3     $ 7.2
                                                               ======     =====


    In April 2001, OI Group and certain of its domestic and foreign
subsidiaries, including the Company (the "Borrowers") entered into the Secured
Credit Agreement (the "Agreement") with a group of banks, which expires on
March 31, 2004. The Agreement provides for a $3.0 billion revolving

                                      F-89

credit facility (the "Revolving Credit Facility") and a $1.5 billion term loan
(the "Term Loan"). The Agreement includes an Overdraft Account Facility
providing for aggregate borrowings up to $50 million which reduce the amount
available for borrowing under the Revolving Credit Facility. The Agreement also
provides for the issuance of letters of credit totaling up to $500 million,
which also reduce the amount available for borrowings under the Revolving Credit
Facility.

    Under the Secured Credit Agreement, the Company has a total commitment of
$1.0 billion provided by the Revolving Credit Facility. The Company has no
commitment available under the Term Loan. At December 31, 2001, the Company had
unused credit of $150.0 million available under the Secured Credit Agreement.

    Prior to April 2001, the Company's significant financing was provided by
OI Inc. under the April 1998 Second Amended and Restated Credit Agreement
through intercompany loans. Borrowings under the Secured Credit Agreement by the
Company and certain other domestic and foreign subsidiaries of OI Group were
used to repay all amounts outstanding under, and terminate, the Second Amended
and Restated Credit Agreement.

    The interest rate on borrowings under the Revolving Credit Facility is, at
the Borrower's option, the Base Rate or a reserve adjusted Eurodollar rate. The
interest rate on borrowings under the Revolving Credit Facility also includes a
margin linked to OI Inc.'s Consolidated Leverage Ratio, as defined in the
Agreement. The margin is limited to ranges of 1.75% to 2.00% for Eurodollar
loans and .75% to 1.00% for Base Rate loans. The interest rate on Overdraft
Account loans is the Base Rate minus .50%. The weighted average interest rate on
borrowings outstanding under the Revolving Credit Facility at December 31, 2001
was 4.17%. While no compensating balances are required by the Agreement, the
Borrowers must pay a facility fee on the Revolving Credit Facility commitments
of .50%.

    Borrowings under the Agreement are secured by substantially all the assets
of the Company and its domestic subsidiaries. Borrowings are also secured by a
pledge of intercompany debt and equity in most of the Company's domestic
subsidiaries.

    The Agreement requires, among other things, the maintenance of certain
financial ratios, and restricts the creation of liens and certain types of
business activities and investments.

    Annual maturities for all of the Company's external long-term debt through
2006 are as follows: 2002, $4.9 million; 2003, $0.5 million; 2004,
$850.3 million; 2005, $0.2 million; and 2006, $0.2 million.

    Interest paid in cash aggregated $31.7 million for 2001, $0.9 million for
2000, and $1.1 million for 1999.

    GUARANTEES OF DEBT.  The Company has guaranteed the borrowings of certain of
OI Inc.'s domestic subsidiaries totaling $2,605.4 and has also guaranteed the
borrowings of certain foreign affiliates under the Agreement.

    During January 2002, an affiliate of the Company completed a $1.0 billion
private placement of senior secured notes. The assets of the Company and most of
its domestic subsidiaries are pledged as security for the notes. The Company has
guaranteed these notes.

    OPERATING LEASES.  Rent expense attributable to all operating leases was
$21.9 million in 2001, $19.1 million in 2000, and $17.4 million in 1999. Minimum
future rentals under operating leases are as follows: 2002, $9.0 million; 2003,
$5.0 million; 2004, $1.5 million; 2005, $0.6 million; 2006, $0.5 million; and
2007 and thereafter, $2.2 million.

    FOREIGN CURRENCY TRANSLATION.  Aggregate foreign currency exchange gains
(losses) included in other costs and expenses were $(1.3) million in 2001,
$(0.7) million in 2000, and $0.5 million in 1999.

                                      F-90

    INCOME TAXES.  Deferred income taxes reflect: (1) the net tax effects of
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes and
(2) carryovers and credits for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities at December 31, 2001 and 2000
are as follows (certain amounts from prior year have been reclassified to
conform to current year presentation):



                                                                2001       2000
                                                              --------   --------
                                                                   
Deferred tax assets:
  Tax loss carryovers.......................................  $  10.9    $   5.3
  Accrued liabilities.......................................     20.9        6.6
  Other.....................................................     24.2       16.8
                                                              -------    -------
    Total deferred tax assets...............................     56.0       28.7
Deferred tax liabilities:
  Property, plant and equipment.............................    151.8      142.6
  Inventory.................................................      1.6        1.6
  Other.....................................................     37.0       39.3
                                                              -------    -------
    Total deferred tax liabilities..........................    190.4      183.5
                                                              -------    -------
    Net deferred tax liabilities............................  $(134.4)   $(154.8)
                                                              =======    =======


    Deferred taxes are included in the Consolidated Balance Sheets at
December 31, 2001 and 2000 as follows:



                                                                2001       2000
                                                              --------   --------
                                                                   
Prepaid expenses............................................  $  38.2    $  18.6
Deferred tax liabilities....................................   (172.6)    (173.4)
                                                              -------    -------
Net deferred tax liabilities................................  $(134.4)   $(154.8)
                                                              =======    =======


    The provision for income taxes consists of the following:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Current:
  State.....................................................   $ 1.2      $(0.4)     $ 2.1
  Foreign...................................................     9.2        9.0        6.2
                                                               -----      -----      -----
                                                                10.4        8.6        8.3
                                                               -----      -----      -----
Deferred:
  U.S. Federal..............................................    39.9       45.3       66.9
  State.....................................................     3.2        6.3        8.2
  Foreign...................................................    (0.2)       0.3        0.4
                                                               -----      -----      -----
                                                                42.9       51.9       75.5
                                                               -----      -----      -----
Total:
  U.S. Federal..............................................    39.9       45.3       66.9
  State.....................................................     4.4        5.9       10.3
  Foreign...................................................     9.0        9.3        6.6
                                                               -----      -----      -----
                                                               $53.3      $60.5      $83.8
                                                               =====      =====      =====


                                      F-91

    The provision for income taxes was calculated based on the following
components of earnings before income taxes:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Domestic....................................................   $ 70.5     $ 91.4     $159.4
Foreign.....................................................     31.4       27.2       21.1
                                                               ------     ------     ------
                                                               $101.9     $118.6     $180.5
                                                               ======     ======     ======


    Income taxes paid in cash were as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Domestic....................................................    $1.5       $0.9       $2.5
Foreign.....................................................     6.4        2.1        4.4
                                                                ----       ----       ----
                                                                $7.9       $3.0       $6.9
                                                                ====       ====       ====


    A reconciliation of the provision for income taxes based on the statutory
U.S. Federal tax rate of 35% to the provision for income taxes is as follows:



                                                                2001       2000       1999
                                                              --------   --------   --------
                                                                           
Pretax earnings at statutory U.S. Federal tax rate..........   $35.7      $41.5      $63.2
Increase (decrease) in provision for income taxes due to:
  Amortization of goodwill..................................    16.5       16.5       16.4
  State taxes, net of federal benefit.......................     3.5        3.9        6.7
  Foreign earnings at different rates.......................    (1.7)       0.3       (1.9)
  Other items...............................................    (0.7)      (1.7)      (0.6)
                                                               -----      -----      -----
Provision for income taxes..................................   $53.3      $60.5      $83.8
                                                               -----      -----      -----
Effective tax rate..........................................    52.3%      51.0%      46.4%
                                                               =====      =====      =====


    The Company is included with OI Inc.'s consolidated tax returns. OI Inc. has
net operating losses, alternative minimum tax credits, and research and
development credits available to offset future U.S. Federal income tax.

    At December 31, 2001, the Company's equity in the undistributed earnings of
foreign subsidiaries for which income taxes had not been provided approximated
$32.7 million. It is not practicable to estimate the U.S. and foreign tax which
would be payable should these earnings be distributed.

    RELATED PARTY TRANSACTIONS.  Charges for administrative services are
allocated to the Company by OI Inc. based on an annual utilization level. Such
services include compensation and benefits administration, payroll processing,
use of certain general accounting systems, auditing, income tax planning and
compliance, and treasury services. Management believes that such transactions
are on

                                      F-92

terms no less favorable to the Company than those that could be obtained from
unaffiliated third parties. The following information summarizes the Company's
significant related party transactions:



                                                                        YEARS ENDED DECEMBER 31,
                                                                  ------------------------------------
                                                                    2001          2000          1999
                                                                  --------      --------      --------
                                                                                     
Revenues:
  Sales to affiliated companies.............................       $ 8.2         $ 7.7         $ 2.6
                                                                   =====         =====         =====
Expenses:
  Administrative services...................................        13.2          15.6          14.6
  Corporate management fee..................................         8.5           8.6           7.8
                                                                   -----         -----         -----
Total expenses..............................................       $21.7         $24.2         $22.4
                                                                   =====         =====         =====


    The above expenses are recorded in the statement of operations as follows:

                                                                                     
Cost of sales...............................................       $11.6         $13.8         $12.9
Selling, general, and administrative expenses...............        10.1          10.4           9.5
                                                                   -----         -----         -----
Total expenses..............................................       $21.7         $24.2         $22.4
                                                                   =====         =====         =====



    Intercompany interest is charged to the Company from OI Inc. based on its
ending intercompany debt balances. Intercompany interest expense is calculated
using a weighted average interest rate of external borrowings by OI Inc.

    PARTICIPATION IN OI INC. STOCK OPTION PLANS.  The Company participates in
the stock option plans of OI Inc. under which employees of the Company may be
granted options to purchase common shares of OI Inc. No options may be exercised
in whole or in part during the first year after the date granted. In general,
subject to certain accelerated exercisability provisions, 50% of the options
become exercisable on the fifth anniversary of the date of the option grant,
with the remaining 50% becoming exercisable on the sixth anniversary date of the
option grant. In general, options expire following termination of employment or
the day after the tenth anniversary date of the option grant.

    All options have been granted at prices equal to the market price of the
OI Inc.'s common stock on the date granted. Accordingly, the Company recognizes
no compensation expense related to the stock option plans. OI Inc. has adopted
the disclosure-only provisions of Statement of Financial Accounting Standards
(SFAS) No. 123, "Accounting for Stock-Based Compensation."

    A substantial number of the options have been granted to key employees of
another subsidiary of OI Inc., some of whose compensation costs are included in
an allocation of costs to all operating subsidiaries of OI Inc., including the
Company. It is not practical to determine an amount of additional compensation
allocable to the Company if OI Inc. had elected to recognize compensation cost
based on the fair value of the options granted at grant date as allowed by SFAS
No. 123.

    PENSION BENEFIT PLANS.  The Company participates in OI Inc.'s pension plans
for substantially all employees located in the United States. Benefits generally
are based on compensation for salaried employees and on length of service for
hourly employees. OI Inc.'s policy is to fund pension plans such that sufficient
assets will be available to meet future benefit requirements. Independent
actuaries determine pension costs for each subsidiary of OI Inc. included in the
plans; however, accumulated benefit obligation information and plan assets
pertaining to each subsidiary have not been separately determined. As such, the
accumulated benefit obligation and the plan assets related to the pension plans
for domestic employees have been retained by another subsidiary of OI Inc. Net
credits to results of operations for the Company's allocated portion of the
domestic pension costs amounted to $13.6 million in 2001, $15.1 million in 2000,
and $9.0 million in 1999.

                                      F-93

    OI Inc. also sponsors several defined contribution plans for all salaried
and hourly U.S. employees of the Company. Participation is voluntary and
participants' contributions are based on their compensation. OI Inc. matches
substantially all plan participants' contributions up to various limits.

    OI Inc. charges the Company for its share of the match. The Company's share
of the contributions to these plans amounted to $3.5 million in 2001,
$3.9 million in 2000, and $4.0 million in 1999.

    POSTRETIREMENT BENEFITS OTHER THAN PENSIONS.  OI Inc. provides certain
retiree health care and life insurance benefits covering substantially all U.S.
salaried and certain hourly employees. Employees are generally eligible for
benefits upon retirement and completion of a specified number of years of
creditable service. Independent actuaries determine postretirement benefit costs
for each subsidiary of OI Inc.; however, accumulated postretirement benefit
obligation information pertaining to each subsidiary has not been separately
determined. As such, the accumulated postretirement benefit obligation has been
retained by another subsidiary of OI Inc.

    The Company's net periodic postretirement benefit cost, as allocated by
OI Inc., was $2.3 million, $1.9 million, and $2.3 million at December 31, 2001,
2000, and 1999, respectively.

    OTHER REVENUE.  Other revenue for the year ended December 31, 2001 includes
$2.8 million from the sale of the Company's label business.

    OTHER COSTS AND EXPENSES.  Other costs and expenses for the year ended
December 31, 2001 include: (1) net charges of $16.9 million consisting of
$22.1 million for impairment and restructuring charges at certain of the
Company's operations offset by a $5.2 million reversal of a prior charge;
(2) $7.9 million related to restructuring manufacturing capacity in the medical
devices business; and (3) $8.5 million for certain contingencies. The Company
expects its actions related to the restructuring and impairment charges to be
completed during the next several quarters.

    Other costs and expenses for the year ended December 31, 2000 include
charges of $11.2 million principally related to a restructuring and capacity
realignment program. The restructuring and capacity realignment program,
initiated in the third quarter of 2000, includes the consolidation of
manufacturing capacity and a reduction of 100 employees in the U.S. salaried
work force, or about 5%, principally as a result of early retirement incentives.

    As a result of the approximate 5% reduction of the U.S. salaried workforce
in 2000, the Company recognized a settlement gain of approximately $8.0 million
related to its defined benefit pension plan. This gain has been included in the
net charge of $9.2 million for early retirement incentives and special
termination benefits.

                                      F-94

    Selected information relating to restructuring accruals follows:



                                                                       EARLY RETIREMENT
                                                       CAPACITY     INCENTIVES AND SPECIAL
                                                      REALIGNMENT    RETIREMENT BENEFITS      TOTAL
                                                      -----------   ----------------------   --------
                                                                                    
2000 restructuring charges..........................     $ 2.0              $ 9.2             $11.2
Write-down of assets to net realizable value........      (0.6)                                (0.6)
Reduction of OI Inc prepaid pension asset...........      (0.6)              (7.4)             (8.0)
Increase in OI Inc nonpension post-retirement
  benefit liability.................................      (1.4)              (1.4)
Net cash paid.......................................      (0.3)                                (0.3)
                                                         -----              -----             -----
Remaining liabilities at December 31, 2000..........       0.5                0.4               0.9
Restructuring program and impairment................      22.1                                 22.1
Reversal of second quarter restructuring charge.....      (5.2)                                (5.2)
Medical Devices restructuring.......................       7.9                                  7.9
Write-down of assets to net realizable value........     (10.1)                               (10.1)
Net cash paid.......................................      (0.5)              (0.4)             (0.9)
                                                         -----              -----             -----
Remaining liabilities at December 31, 2001..........     $14.7              $  --             $14.7
                                                         =====              =====             =====


    Capacity realignment includes charges for plant closing costs, severance
benefits, and write-downs of assets for disposal or abandonment as a result of
restructuring of manufacturing capacity. Write-downs of assets represent the
majority of the charges for 2001.

                                      F-95

                      OWENS-BROCKWAY GLASS CONTAINER INC.

                 OFFER TO EXCHANGE UP TO $1,000,000,000 OF ITS

                     8 7/8% SENIOR SECURED NOTES DUE 2009,

              WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT,

                  FOR UP TO $1,000,000,000 OF ITS OUTSTANDING

                      8 7/8% SENIOR SECURED NOTES DUE 2009

                             ---------------------

                                   PROSPECTUS

                             ---------------------

                                           , 2002

                                    PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS

    The Company is a Delaware corporation. Subsection (b)(7) of Section 102 of
the Delaware General Corporation Law (the "DGCL"), enables a corporation in its
original certificate of incorporation or an amendment thereto to eliminate or
limit the personal liability of a director to the corporation or its
stockholders for monetary damages for violations of the director's fiduciary
duty, except (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law,
(iii) pursuant to Section 174 of the DGCL (providing for liability of directors
for unlawful payment of dividends or unlawful stock purchases or redemptions) or
(iv) for any transaction from which a director derived an improper personal
benefit.

    Subsection (a) of Section 145 of the DGCL empowers a corporation to
indemnify any director or officer, or former director or officer, who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation),
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding provided that such director or officer acted in good faith in
a manner reasonably believed to be in, or not opposed to, the best interests of
the corporation, and, with respect to any criminal action or proceeding,
provided further that such director or officer had no reasonable cause to
believe his conduct was unlawful.

    Subsection (b) of Section 145 empowers a corporation to indemnify any
director or officer, or former director or officer, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person acted in any of the capacities set forth
above, against expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of such action or suit
provided that such director or officer acted in good faith and in a manner
reasonably believed to be in, or not opposed to, the best interests of the
corporation, except that no indemnification may be made in respect to any claim,
issue or matter as to which such director or officer shall have been adjudged to
be liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
of the circumstances of the case, such director or officer is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.

    Section 145 further provides that to the extent a director or officer of a
corporation has been successful in the defense of any action, suit or proceeding
referred to in subsections (a) and (b) or in the defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith; that
indemnification and advancement of expenses provided for, by, or granted
pursuant to Section 145 shall not be deemed exclusive of any other rights to
which the indemnified party may be entitled; and empowers the corporation to
purchase and maintain insurance on behalf of a director or officer of the
corporation against any liability asserted against him or incurred by him in any
such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liabilities under
Section 145.

    Section 8 of the Certificate of Incorporation (filed as Exhibit 3.1) of the
Company, as amended, provides for the elimination of liability of directors to
the extent permitted by Section 102(b)(7) of the DGCL. Article III, Section 13
of the By-Laws of the Company (filed as Exhibit 3.6) provides for
indemnification of the officers and directors of the Company to the extent
permitted by applicable law.

                                      II-1

    The Company has in effect insurance policies in the amount of $60 million
covering all of its directors and officers.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

    A list of exhibits filed with this registration statement on Form S-4 is set
forth on the Exhibit Index and is incorporated in this Item 21 by reference.

ITEM 22. UNDERTAKINGS.

(a)  The undersigned registrant hereby undertakes:

    (1) To file, during any period in which offers or sales are being made, a
       post-effective amendment to this registration statement:

        (i) To include any prospectus required by Section 10(a)(3) of the
            Securities Act of 1933;

        (ii) To reflect in the prospectus any facts or events arising after the
             effective date of the registration statement (or the most recent
             post-effective amendment thereof) which, individually or in the
             aggregate, represent a fundamental change in the information set
             forth in the registration statement. Notwithstanding the foregoing,
             any increase or decrease in volume of securities offered (if the
             total dollar value of securities offered would not exceed that
             which was registered) and any deviation from the low or high end of
             the estimated maximum offering range may be reflected in the form
             of prospectus filed with the SEC pursuant to Rule 424(b) if, in the
             aggregate, the changes in volume and price represent no more than a
             20 percent change in the maximum aggregate offering price set forth
             in the "Calculation of Registration Fee" table in the effective
             registration statement; and

       (iii) To include any material information with respect to the plan of
             distribution not previously disclosed in the registration statement
             or any material change to such information in the registration
             statement;

    (2) That, for the purpose of determining any liability under the Securities
       Act of 1933, each such post-effective amendment shall be deemed to be a
       new registration statement relating to the securities offered therein,
       and the offering of such securities at that time shall be deemed to be
       the initial BONA FIDE offering thereof.

    (3) To remove from registration by means of a post-effective amendment any
       of the securities being registered which remain unsold at the termination
       of the offering.

(b)  Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by a controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

(c)  The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

                                      II-2

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on behalf of
Owens-Illinois Group, Inc. and in the capacities and on the dates indicated.

                                                      
                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary





                      SIGNATURE                                     TITLE
                      ---------                                     -----
                                                                                   
                  James W. Baehren                     Vice President and Secretary;
                                                         Director

                  Jeffrey A. Denker                    Treasurer
                                                         (Principal Financial Officer)

                  R. Scott Trumbull                    Vice President and Chief
                                                         Financial Officer; Director

                   Edward C. White                     Controller and Chief Accounting
                                                         Officer (Principal Accounting
                                                         Officer)

                   Thomas L. Young                     President, Chairman of the Board
                                                         of Directors and Chief
                                                         Executive Officer (Principal
                                                         Executive Officer); Director


                                                       
                                                   *By:                  /s/ JAMES W. BAEHREN
                                                                --------------------------------------
                                                                           James W. Baehren
                                                                           ATTORNEY-IN-FACT

                                                   

                                      II-3

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on behalf of
Owens-Brockway Glass Container Inc. and in the capacities and on the dates
indicated.

                                                      
                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary





                      SIGNATURE                                            TITLE
                      ---------                                            -----
                                                    
                  Robert J. Dineen                     Director

                  Edward A. Gilhuly                    Director

                James H. Greene, Jr.                   Director

                  Joseph H. Lemieux                    Chairman of the Board of Directors and Chief
                                                         Executive Officer (Principal Executive
                                                         Officer); Director

                John J. McMackin, Jr.                  Director

                  George R. Roberts                    Director

                  R. Scott Trumbull                    Executive Vice President and Chief Financial
                                                         Officer (Principal Financial Officer)

                   Edward C. White                     Vice President and Comptroller (Principal
                                                         Accounting Officer)

                   Thomas L. Young                     Executive Vice President, Administration and
                                                         General Counsel; Director


                                                       
                                                   *By:                  /s/ JAMES W. BAEHREN
                                                                --------------------------------------
                                                                           James W. Baehren
                                                                           ATTORNEY-IN-FACT

                                                   

                                      II-4

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       ACI AMERICA HOLDINGS INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                      DATE
                      ---------                                     -----                      ----
                                                                                   
                 /s/ RICHARD A. JUN
     -------------------------------------------       President (Principal Executive      April 5, 2002
                   Richard A. Jun                        Officer)

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;       April 5, 2002
                  James W. Baehren                       Director

                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       Vice President; Director            April 5, 2002
                  R. Scott Trumbell

                 /s/ THOMAS L. YOUNG
     -------------------------------------------       Vice President; Director            April 5, 2002
                   Thomas L. Young

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer                           April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer                 April 5, 2002
                   Edward C. White                       (Principal Accounting Officer)


                                      II-5

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       ANAMED INTERNATIONAL, INC.
                                                       BRIGAM MEDICAL, INC.
                                                       BRIGAM VENTURES, INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                      DATE
                      ---------                                     -----                      ----
                                                                                   
               /s/ MICHAEL D. MCDANIEL
     -------------------------------------------       President (Principal Executive      April 5, 2002
                 Michael D. McDaniel                     Officer); Director

                /s/ JAMES. W. BAEHREN
     -------------------------------------------       Vice President and Secretary;       April 5, 2002
                  James. W. Baehren                      Director

                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       Director                            April 5, 2002
                  R. Scott Trumbull

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer                           April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer                 April 5, 2002
                   Edward C. White                       (Principal Accounting Officer)


                                      II-6

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       BRIGAM, INC.
                                                       OI MEDICAL HOLDINGS INC.
                                                       OWENS-ILLINOIS CLOSURE INC.
                                                       SPECIALTY PACKAGING LICENSING COMPANY

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                      DATE
                      ---------                                     -----                      ----
                                                                                   
               /s/ MICHAEL D. MCDANIEL
     -------------------------------------------       President (Principal Executive      April 5, 2002
                 Michael D. McDaniel                     Officer); Director

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;       April 5, 2002
                  James W. Baehren                       Director

                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       Director                            April 5, 2002
                  R. Scott Trumbull

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer                           April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer                 April 5, 2002
                   Edward C. White                       (Principal Accounting Officer)


                                      II-7

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       BROCKWAY REALTY CORPORATION

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                      DATE
                      ---------                                     -----                      ----
                                                                                   
                /s/ GERALD J. LEMIEUX
     -------------------------------------------       President (Principal Executive      April 5, 2002
                  Gerald J. Lemieux                      Officer); Director

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;       April 5, 2002
                  James W. Baehren                       Director

                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       Director                            April 5, 2002
                  R. Scott Trumbull

                 /s/ THOMAS L. YOUNG
     -------------------------------------------       Vice President; Director            April 5, 2002
                   Thomas L. Young

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer                           April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer                 April 5, 2002
                   Edward C. White                       (Principal Accounting Officer)


                                      II-8

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       BROCKWAY RESEARCH, INC.
                                                       OI AUBURN INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                      DATE
                      ---------                                     -----                      ----
                                                                                   
                /s/ GERALD J. LEMIEUX
     -------------------------------------------       President (Principal Executive      April 5, 2002
                  Gerald J. Lemieux                      Officer); Director

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;       April 5, 2002
                  James W. Baehren                       Director

                 /s/ THOMAS L. YOUNG
     -------------------------------------------       Vice President; Director            April 5, 2002
                   Thomas L. Young

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer                           April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer                 April 5, 2002
                   Edward C. White                       (Principal Accounting Officer)


                                      II-9

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       CONTINENTAL PET TECHNOLOGIES, INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                      DATE
                      ---------                                     -----                      ----
                                                                                   
                 /s/ W. BRUCE LARSEN
     -------------------------------------------       President (Principal Executive      April 5, 2002
                   W. Bruce Larsen                       Officer); Director

                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       Director                            April 5, 2002
                  R. Scott Trumbull

                /s/ TERRY L. WILKISON
     -------------------------------------------       Vice President; Director            April 5, 2002
                  Terry L. Wilkison

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer                           April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer                 April 5, 2002
                   Edward C. White                       (Principal Accounting Officer)


                                     II-10

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       MARC INDUSTRIES, INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                      DATE
                      ---------                                     -----                      ----
                                                                                   
               /s/ MICHAEL D. MCDANIEL
     -------------------------------------------       President (Principal Executive      April 5, 2002
                 Michael D. McDaniel                     Officer); Director

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;       April 5, 2002
                  James W. Baehren                       Director

                /s/ TERRY L. WILKISON
     -------------------------------------------       Vice President; Director            April 5, 2002
                  Terry L. Wilkison

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer                           April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer                 April 5, 2002
                   Edward C. White                       (Principal Accounting Officer)


                                     II-11

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       MARTELL MEDICAL PRODUCTS, INCORPORATED
                                                       OI MEDICAL INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
               /s/ MICHAEL D. MCDANIEL
     -------------------------------------------       President (Principal Executive   April 5, 2002
                 Michael D. McDaniel                     Officer); Director

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;    April 5, 2002
                  James W. Baehren                       Director

                 /s/ THOMAS L. YOUNG
     -------------------------------------------       Vice President; Director         April 5, 2002
                   Thomas L. Young

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer (Principal Financial   April 5, 2002
                  Jeffrey A. Denker                      Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-12

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OB CAL SOUTH INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                /s/ GERALD J. LEMIEUX
     -------------------------------------------       President (Principal Executive   April 5, 2002
                  Gerald J. Lemieux                      Officer); Director

                 /s/ THOMAS L. YOUNG
     -------------------------------------------       Vice President; Director         April 5, 2002
                   Thomas L. Young

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer (Principal Financial   April 5, 2002
                  Jeffrey A. Denker                      Officer); Director

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-13

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OI AID STS INC.
                                                       SEAGATE II, INC.
                                                       SEAGATE III, INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                 /s/ THOMAS L. YOUNG
     -------------------------------------------       President (Principal Executive   April 5, 2002
                   Thomas L. Young                       Officer); Director

                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       Vice President; Director         April 5, 2002
                  R. Scott Trumbull

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer (Principal Financial   April 5, 2002
                  Jeffrey A. Denker                      Officer); Director

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-14

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OI AUSTRALIA INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                /s/ TERRY L. WILKISON
     -------------------------------------------       President (Principal Executive   April 5, 2002
                  Terry L. Wilkison                      Officer)

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;    April 5, 2002
                  James W. Baehren                       Director

                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       Vice President; Director         April 5, 2002
                  R. Scott Trumbull

                 /s/ THOMAS L. YOUNG
     -------------------------------------------       Vice President; Director         April 5, 2002
                   Thomas L. Young

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer (Principal Financial   April 5, 2002
                  Jeffrey A. Denker                      Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-15

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OI BRAZIL CLOSURE INC.
                                                       OWENS-ILLINOIS SPECIALTY PRODUCTS PUERTO
                                                       RICO, INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       President (Principal Executive   April 5, 2002
                  R. Scott Trumbull                      Officer); Director

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;    April 5, 2002
                  James W. Baehren                       Director

               /s/ MICHAEL D. MCDANIEL
     -------------------------------------------       Vice President; Director         April 5, 2002
                 Michael D. McDaniel

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer (Principal Financial   April 5, 2002
                  Jeffrey A. Denker                      Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-16

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OI CALIFORNIA CONTAINERS INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
               /s/ L. RICHARD CRAWFORD
     -------------------------------------------       President (Principal Executive   April 5, 2002
                 L. Richard Crawford                     Officer); Director

                /s/ GERALD L. LEMIEUX
     -------------------------------------------       Vice President; Director         April 5, 2002
                  Gerald L. Lemieux

                 /s/ THOMAS L. YOUNG
     -------------------------------------------       Vice President; Director         April 5, 2002
                   Thomas L. Young

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer (Principal Financial   April 5, 2002
                  Jeffrey A. Denker                      Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-17

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OI CASTALIA STS INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                /s/ GERALD J. LEMIEUX
     -------------------------------------------       President (Principal Executive   April 5, 2002
                  Gerald J. Lemieux                      Officer)

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;    April 5, 2002
                  James W. Baehren                       Director

                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       Vice President; Director         April 5, 2002
                  R. Scott Trumbull

                 /s/ THOMAS L. YOUNG
     -------------------------------------------       Vice President; Director         April 5, 2002
                   Thomas L. Young

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer (Principal Financial   April 5, 2002
                  Jeffrey A. Denker                      Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-18

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OI CONSOL STS INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       President (Principal Executive   April 5, 2002
                  R. Scott Trumbull                      Officer); Director

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;    April 5, 2002
                  James W. Baehren                       Director

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer (Principal Financial   April 5, 2002
                  Jeffrey A. Denker                      Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer); Director


                                     II-19

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OI ECUADOR STS INC.
                                                       O-I HEALTH CARE HOLDING CORP.
                                                       OI INTERNATIONAL HOLDINGS INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       President (Principal Executive   April 5, 2002
                  R. Scott Trumbull                      Officer); Director

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;    April 5, 2002
                  James W. Baehren                       Director

                 /s/ THOMAS L. YOUNG
     -------------------------------------------       Vice President; Director         April 5, 2002
                   Thomas L. Young

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer (Principal Financial   April 5, 2002
                  Jeffrey A. Denker                      Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-20

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OI EUROPE & ASIA INC.
                                                       OI POLAND INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       President (Principal Executive   April 5, 2002
                  R. Scott Trumbull                      Officer); Director

                 /s/ ROBERT A. SMITH
     -------------------------------------------       Vice President; Director         April 5, 2002
                   Robert A. Smith

                 /s/ THOMAS L. YOUNG
     -------------------------------------------       Vice President; Director         April 5, 2002
                   Thomas L. Young

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer                        April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-21

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OI GENERAL FINANCE INC.
                                                       OI GENERAL FTS INC.
                                                       O-I HOLDING COMPANY, INC.
                                                       OI LEVIS PARK STS INC.
                                                       OWENS-ILLINOIS GENERAL INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                 /s/ THOMAS L. YOUNG
     -------------------------------------------       President (Principal Executive   April 5, 2002
                   Thomas L. Young                       Officer); Director

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;    April 5, 2002
                  James W. Baehren                       Director

                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       Vice President; Director         April 5, 2002
                  R. Scott Trumbull

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer                        April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-22

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OI HUNGARY INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       President (Principal Executive   April 5, 2002
                  R. Scott Trumbull                      Officer); Director

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;    April 5, 2002
                  James W. Baehren                       Director

                /s/ LARRY A. GRIFFITH
     -------------------------------------------       Vice President; Director         April 5, 2002
                  Larry A. Griffith

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer                        April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Vice President (Principal        April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-23

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OI PERU STS INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       President (Principal Executive   April 5, 2002
                  R. Scott Trumbull                      Officer); Director

                 /s/ ROBERT A. SMITH
     -------------------------------------------       Vice President; Director         April 5, 2002
                   Robert A. Smith

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer                        April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer); Director


                                     II-24

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OI PLASTIC PRODUCTS FTS INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                /s/ TERRY L. WILKISON
     -------------------------------------------       President (Principal Executive   April 5, 2002
                  Terry L. Wilkison                      Officer); Director

                 /s/ THOMAS L. YOUNG
     -------------------------------------------       Vice President; Director         April 5, 2002
                   Thomas L. Young

                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       Vice President; Director         April 5, 2002
                  R. Scott Trumbull

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer (Principal Financial   April 5, 2002
                  Jeffrey A. Denker                      Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-25

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OI PUERTO RICO STS INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       President (Principal Executive   April 5, 2002
                  R. Scott Trumbull                      Officer)

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;    April 5, 2002
                  James W. Baehren                       Director

                 /s/ ROBERT A. SMITH
     -------------------------------------------       Vice President; Director         April 5, 2002
                   Robert A. Smith

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer                        April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer); Director


                                     II-26

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OI REGIOPLAST STS INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       President (Principal Executive   April 5, 2002
                  R. Scott Trumbull                      Officer); Director

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;    April 5, 2002
                  James W. Baehren                       Director

                 /s/ ROBERT A. SMITH
     -------------------------------------------       Vice President; Director         April 5, 2002
                   Robert A. Smith

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer                        April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-27

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OI VENEZUELA PLASTIC PRODUCTS INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       President (Principal Executive   April 5, 2002
                  R. Scott Trumbull                      Officer); Director

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;    April 5, 2002
                  James W. Baehren                       Director

                /s/ TERRY L. WILKISON
     -------------------------------------------       Vice President; Director         April 5, 2002
                  Terry L. Wilkison

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer                        April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-28

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OIB PRODUVISA INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                 /s/ ROBERT A. SMITH
     -------------------------------------------       President (Principal Executive   April 5, 2002
                   Robert A. Smith                       Officer)

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;    April 5, 2002
                  James W. Baehren                       Director

                 /s/ THOMAS L. YOUNG
     -------------------------------------------       Vice President; Director         April 5, 2002
                   Thomas L. Young

                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       Vice President; Director         April 5, 2002
                  R. Scott Trumbull

                /s/ JEFFREY A. DENKER
     -------------------------------------------       Treasurer                        April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-29

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OVERSEAS FINANCE COMPANY

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title:  Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
                                                                                  
                /s/ JEFFREY A. DENKER                  President (Principal Executive
     -------------------------------------------         Officer) and Treasurer         April 5, 2002
                  Jeffrey A. Denker                      (Principal Financial Officer)

                /s/ JAMES W. BAEHREN
     -------------------------------------------       Vice President and Secretary;    April 5, 2002
                  James W. Baehren                       Director

                 /s/ THOMAS L. YOUNG
     -------------------------------------------       Vice President; Director         April 5, 2002
                   Thomas L. Young

                /s/ R. SCOTT TRUMBULL
     -------------------------------------------       Vice President; Director         April 5, 2002
                  R. Scott Trumbull

                 /s/ EDWARD C. WHITE
     -------------------------------------------       Assistant Treasurer (Principal   April 5, 2002
                   Edward C. White                       Accounting Officer)


                                     II-30

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OWENS-BROCKWAY GLASS CONTAINER TRADING COMPANY

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                SIGNATURE                                     TITLE                         DATE
                ---------                                     -----                         ----
                                                                                 
          /s/ R. SCOTT TRUMBULL             President (Principal Executive Officer);   April 5, 2002
    ---------------------------------         Director
            R. Scott Trumbull

          /s/ GERALD J. LEMIEUX             Director                                   April 5, 2002
    ---------------------------------
            Gerald J. Lemieux

           /s/ THOMAS L. YOUNG              Vice President; Director                   April 5, 2002
    ---------------------------------
             Thomas L. Young

          /s/ JEFFREY A. DENKER             Treasurer                                  April 5, 2002
    ---------------------------------         (Principal Financial Officer)
            Jeffrey A. Denker

           /s/ EDWARD C. WHITE              Assistant Treasurer (Principal Accounting  April 5, 2002
    ---------------------------------         Officer)
             Edward C. White


                                     II-31

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OWENS-BROCKWAY PACKAGING, INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                SIGNATURE                                     TITLE                         DATE
                ---------                                     -----                         ----
                                                                                 
           /s/ THOMAS L. YOUNG              President (Principal Executive Officer);   April 5, 2002
    ---------------------------------         Director
             Thomas L. Young

           /s/ JAMES W. BAEHREN             Vice President and Secretary; Director     April 5, 2002
    ---------------------------------
             James W. Baehren

          /s/ GERALD J. LEMIEUX             Vice President; Director                   April 5, 2002
    ---------------------------------
            Gerald J. Lemieux

          /s/ JEFFREY A. DENKER             Treasurer (Principal Financial Officer)    April 5, 2002
    ---------------------------------
            Jeffrey A. Denker

           /s/ EDWARD C. WHITE              Assistant Treasurer (Principal Accounting  April 5, 2002
    ---------------------------------         Officer)
             Edward C. White


                                     II-32

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OWENS-BROCKWAY PLASTIC PRODUCTS INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                SIGNATURE                                     TITLE                         DATE
                ---------                                     -----                         ----
                                                                                 
          /s/ TERRY L. WILKISON             President (Principal Executive Officer);   April 5, 2002
    ---------------------------------         Director
            Terry L. Wilkison

          /s/ LARRY A. GRIFFITH             Vice President; Director                   April 5, 2002
    ---------------------------------
            Larry A. Griffith

          /s/ R. SCOTT TRUMBULL             Vice President; Director                   April 5, 2002
    ---------------------------------
            R. Scott Trumbull

          /s/ JEFFREY A. DENKER             Treasurer (Principal Financial Officer)    April 5, 2002
    ---------------------------------
            Jeffrey A. Denker

           /s/ EDWARD C. WHITE              Assistant Treasurer (Principal Accounting  April 5, 2002
    ---------------------------------         Officer)
             Edward C. White


                                     II-33

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OWENS-ILLINOIS PRESCRIPTION PRODUCTS INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                SIGNATURE                                     TITLE                         DATE
                ---------                                     -----                         ----
                                                                                 
           /s/ JOSEPH V. CONDA              President (Principal Executive Officer);   April 5, 2002
    ---------------------------------         Director
             Joseph V. Conda

           /s/ THOMAS L. YOUNG              Vice President; Director                   April 5, 2002
    ---------------------------------
             Thomas L. Young

          /s/ R. SCOTT TRUMBULL             Vice President; Director                   April 5, 2002
    ---------------------------------
            R. Scott Trumbull

          /s/ JEFFREY A. DENKER             Treasurer                                  April 5, 2002
    ---------------------------------         (Principal Financial Officer)
            Jeffrey A. Denker

           /s/ EDWARD C. WHITE              Assistant Treasurer                        April 5, 2002
    ---------------------------------         (Principal Accounting Officer)
             Edward C. White


                                     II-34

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       PRODUCT DESIGN & ENGINEERING, INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                SIGNATURE                                     TITLE                         DATE
                ---------                                     -----                         ----
                                                                                 
           /s/ JAMES W. BAEHREN             President (Principal Executive Officer)    April 5, 2002
    ---------------------------------         and Secretary; Director
             James W. Baehren

           /s/ THOMAS L. YOUNG              Vice President; Director                   April 5, 2002
    ---------------------------------
             Thomas L. Young

          /s/ R. SCOTT TRUMBULL             Executive Vice President and Chief         April 5, 2002
    ---------------------------------         Financial Officer; Director
            R. Scott Trumbull

          /s/ JEFFREY A. DENKER             Treasurer                                  April 5, 2002
    ---------------------------------         (Principal Financial Officer)
            Jeffrey A. Denker

           /s/ EDWARD C. WHITE              Assistant Treasurer                        April 5, 2002
    ---------------------------------         (Principal Accounting Officer)
             Edward C. White


                                     II-35

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       SEAGATE, INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                SIGNATURE                                     TITLE                         DATE
                ---------                                     -----                         ----
                                                                                 
           /s/ THOMAS L. YOUNG              President (Principal Executive Officer);   April 5, 2002
    ---------------------------------         Director
             Thomas L. Young

          /s/ R. SCOTT TRUMBULL             Vice President; Director                   April 5, 2002
    ---------------------------------
            R. Scott Trumbull

          /s/ GERALD J. LEMIEUX             Director                                   April 5, 2002
    ---------------------------------
            Gerald J. Lemieux

          /s/ JEFFREY A. DENKER             Treasurer (Principal Financial Officer)    April 5, 2002
    ---------------------------------
            Jeffrey A. Denker

           /s/ EDWARD C. WHITE              Assistant Treasurer (Principal Accounting  April 5, 2002
    ---------------------------------         Officer)
             Edward C. White


                                     II-36

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       UNIVERSAL MATERIALS, INC.

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary



                               POWER OF ATTORNEY

    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below does hereby constitute and appoint R. Scott Trumbull, James W. Baehren, or
either of them, individually, as his true and lawful attorney-in-fact and agent,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign this
registration statement and any and all amendments thereto (including without
limitation any post-effective amendments thereto and any registration statement
pursuant to Rule 462(b)), and to file each of the same, with all exhibits
thereto and all other documents in connection therewith, with the Securities and
Exchange Commission, and every act and thing necessary or desirable to be done,
as fully to all intents and purposes as he might or could do in person, thereby
ratifying and confirming all that said attorney-in-fact and agent, each acting
alone, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

    Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.



                        NAME                                      TITLE                    DATE
                        ----                                      -----                    ----
                                                                              
                 /s/ ERNST F. VALIS                    President (Principal
     -------------------------------------------         Executive Officer);          April 5, 2002
                   Ernst F. Valis                        Director

                   /s/ SUSAN SMITH
     -------------------------------------------       Director                       April 5, 2002
                     Susan Smith

                /s/ JEFFREY A. DENKER                  Treasurer (Principal
     -------------------------------------------         Financial Officer);          April 5, 2002
                  Jeffrey A. Denker                      Director

                 /s/ EDWARD C. WHITE                   Assistant Treasurer
     -------------------------------------------         (Principal Accounting        April 5, 2002
                   Edward C. White                       Officer)


                                     II-37

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       OWENS-BRIGAM MEDICAL COMPANY,
                                                       A DELAWARE PARTNERSHIP
                                                       BY BRIGRAM VENTURES, INC., PARTNER

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            James W. Baehren
                                                            Title: Vice President and Secretary

                                                       By OI MEDICAL HOLDINGS, INC., PARTNER

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            James W. Baehren
                                                            Title: Vice President and Secretary



                                     II-38

                                   SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Toledo, state of Ohio, on
the 5th day of April, 2002.

                                                      
                                                       NHW AUBURN, LLC, A NEW YORK LIMITED LIABILITY
                                                       COMPANY
                                                       BY OWENS-BROCKWAY GLASS CONTAINER INC., SOLE
                                                       MEMBER

                                                       By:  /s/ JAMES W. BAEHREN
                                                            -----------------------------------------
                                                            Name: James W. Baehren
                                                            Title: Vice President and Secretary



                                     II-39

                                 EXHIBIT INDEX



       EXHIBIT
       NUMBER           EXHIBIT DESCRIPTION
       -------          -------------------
                     
         3.1            Certificate of Incorporation of OI Glass Container Domestic
                        STS Inc., dated as of March 8, 1987

         3.2            Certificate of Amendment of Certificate of Incorporation of
                        OI Glass Container Domestic STS Inc. Before Payment of
                        Capital, dated as of March 9, 1987

         3.3            Certificate of Amendment of Certificate of Incorporation of
                        OI Glass Container Domestic STS Inc., dated as of April 8,
                        1987

         3.4            Certificate of Change of Registered Agent and Registered
                        Office of Owens-Illinois Glass Container Inc., dated as of
                        May 26, 1988

         3.5            Certificate of Merger of O-I Brockway Glass, Inc. into
                        Owens-Illinois Glass Container Inc., dated as of April 30,
                        1990

         3.6            By-Laws

         4.1            Indenture, dated as of January 24, 2002, among the Company,
                        the Guarantors (as defined therein) and U.S. Bank National
                        Association, as Trustee

         4.2            First Supplemental Indenture, dated as of January 24, 2002,
                        among the Company, the Guarantors (as defined therein) and
                        U.S. Bank National Association, as Trustee

         4.3            Indenture, dated as of May 15, 1997, between Owens-Illinois,
                        Inc. and The Bank of New York, as Trustee (filed as
                        Exhibit 4.1 to the Owens-Illinois Group, Inc. Form 8-K dated
                        May 16, 1997, File No. 1-9576, and incorporated herein by
                        reference)

         4.4            Officers' Certificate, dated May 16, 1997, establishing the
                        terms of the 7.85% Senior Notes due 2004; including the Form
                        of 7.85% Senior Note due 2004 (filed as Exhibits 4.2
                        and 4.4, respectively, to the Owens-Illinois, Inc.
                        Form 8-K dated May 16, 1997, File No. 1-9576, and
                        incorporated herein by reference)

         4.5            Officers' Certificate, dated May 16, 1997, establishing the
                        terms of the 8.10% Senior Notes due 2007; including the Form
                        of 8.10% Senior Note due 2007 (filed as Exhibits 4.3
                        and 4.5, respectively, to the Owens-Illinois, Inc.
                        Form 8-K dated May 16, 1997, File No. 1-9576, and
                        incorporated herein by reference)

         4.6            Supplemental Indenture, dated as of June 26, 2001 among
                        Owens-Illinois, Inc., Owens-Illinois Group, Inc.,
                        Owens-Brockway Packaging, Inc. and The Bank of New York, as
                        Trustee (May 15, 1997 Indenture) (filed as Exhibit 4.2 to
                        Owens-Illinois, Inc.'s Quarterly Report on Form 10-Q for the
                        quarter ended September 30, 2001, File No. 1-9576, and
                        incorporated herein by reference)

         4.7            Indenture, dated as of May 20, 1998, between Owens-Illinois,
                        Inc. and The Bank of New York, as Trustee (filed as
                        Exhibit 4.1 to the Owens-Illinois, Inc. Form 8-K dated
                        May 20, 1998, File No. 1-9576, and incorporated herein by
                        reference)

         4.8            Officers' Certificate, dated May 20, 1998, establishing the
                        terms of the 7.15% Senior Notes due 2005; including the Form
                        of 7.15% Senior Note due 2005 (filed as Exhibits 4.2
                        and 4.6, respectively, to the Owens-Illinois, Inc.
                        Form 8-K dated May 20, 1998, File No. 1-9576, and
                        incorporated herein by reference)

         4.9            Officers' Certificate, dated May 20, 1998, establishing the
                        terms of the 7.35% Senior Notes due 2008; including the Form
                        of 7.35% Senior Note due 2008 (filed Exhibits 4.3 and 4.7,
                        respectively, to the Owens-Illinois, Inc. Form 8-K dated
                        May 20, 1998, File No. 1-9576, and incorporated herein by
                        reference)






       EXHIBIT
       NUMBER           EXHIBIT DESCRIPTION
       -------          -------------------
                     
         4.10           Officers' Certificate, dated May 20, 1998, establishing the
                        terms of the 7.50% Senior Notes due 2010; including the Form
                        of 7.50% Senior Note due 2010 (filed as Exhibits 4.4
                        and 4.8, respectively, to the Owens-Illinois, Inc.
                        Form 8-K dated May 20, 1998, File No. 1-9576, and
                        incorporated herein by reference)

         4.11           Officers' Certificate, dated May 20, 1998, establishing the
                        terms of the 7.80% Senior Notes due 2018; including the Form
                        of 7.80% Senior Note due 2018 (filed as Exhibits 4.5
                        and 4.9, respectively, to the Owens-Illinois, Inc.
                        Form 8-K filed May 20, 1998, File No. 1-9576, and
                        incorporated herein by reference)

         4.12           Supplemental Indenture, dated as of June 26, 2001 among
                        Owens-Illinois, Inc., Owens-Illinois Group, Inc.,
                        Owens-Brockway Packaging, Inc. and The Bank of New York, as
                        Trustee (May 20, 1998 Indenture) (filed as Exhibit 4.1 to
                        Owens-Illinois, Inc.'s Quarterly Report on Form 10-Q for the
                        quarter ended September 30, 2001, File No. 1-9576, and
                        incorporated herein by reference)

         4.13           Secured Credit Agreement, dated as of April 23, 2001, by and
                        among the Borrowers named therein, Owens-Illinois Group,
                        Inc. and Owens-Illinois General, Inc., as Borrower's Agent,
                        Deutsche Banc Alex. Brown and Banc of America Securities,
                        LLC, as Joint Lead Arrangers and Joint Book Managers,
                        Deutsche Bank AG, London Branch, as UK Administrative Agent,
                        Bankers Trust Company, as Administrative Agent, and the
                        other Agents and the other Lenders named therein (filed as
                        Exhibit 4.1 to Owens-Illinois, Inc.'s Quarterly Report on
                        Form 10-Q for the quarter ended March 31, 2001, File
                        No. 1-9576, and incorporated herein by reference)

         4.14           First Amendment to Secured Credit Agreement and Consent,
                        dated as of December 31, 2001, by and among the Borrowers
                        named therein, Owens-Illinois Group, Inc. and Owens-Illinois
                        General, Inc., as Borrowers' Agent, the lenders listed
                        therein and Bankers Trust Company, as Administrative Agent
                        and Collateral Agent

         4.15           Intercreditor Agreement, dated as of April 23, 2001, by and
                        among Bankers Trust Company, as administrative agent for the
                        lenders party to the Credit Agreement (as defined therein)
                        and Bankers Trust Company, as Collateral Agent (as defined
                        therein) and any other parties thereto (filed as
                        Exhibit 4.4 to Owens-Illinois, Inc.'s Quarterly Report on
                        Form 10-Q for the quarter ended September 31, 2001, File
                        No. 1-9576, and incorporated herein by reference)

         4.16           First Amendment to Intercreditor Agreement, dated as of
                        January 24, 2002, by and among Bankers Trust Company, as
                        administrative agent for the lenders party to the Credit
                        Agreement (as defined therein) and Bankers Trust Company, as
                        Collateral Agent

         4.17           Pledge Agreement, dated as of April 23, 2001, between
                        Owens-Illinois Group, Inc., Owens-Brockway Packaging, Inc.,
                        and Bankers Trust Company, as Collateral Agent (as defined
                        therein) and any other parties thereto (filed as
                        Exhibit 4.3 to Owens-Illinois, Inc.'s Quarterly Report on
                        Form 10-Q for the quarter ended September 30, 2001, File
                        No. 1-9576, and incorporated herein by reference)

         4.18           First Amendment to Pledge Agreement, dated as of
                        January 24, 2002, by and among Owens-Illinois Group, Inc.,
                        Owens-Brockway Packaging Inc., Bankers Trust Company, as
                        Collateral Agent (as defined therein) and Bankers Trust
                        Company, as administrative agent

         4.19           Security Agreement, dated as of April 23, 2001, between
                        Owens-Illinois Group, Inc., each of the direct and indirect
                        subsidiaries of Owens-Illinois Group, Inc. signatory thereto
                        and Bankers Trust Company, as Collateral Agent (as defined
                        therein)

         4.20           First Amendment to Security Agreement, dated as of
                        January 24, 2002, between Owens-Illinois Group, Inc., each
                        of the direct and indirect subsidiaries of Owens-Illinois
                        Group, Inc. signatory thereto and Bankers Trust Company, as
                        Collateral Agent (as defined therein)






       EXHIBIT
       NUMBER           EXHIBIT DESCRIPTION
       -------          -------------------
                     
         4.21           Registration Rights Agreement, dated as of January 24, 2002,
                        between Owens-Brockway Glass Container Inc, the Guarantors
                        (as defined therein) and Banc of America Securities LLC
                        Goldman, Sachs & Co., Deutsche Banc Alex. Brown Inc., Morgan
                        Stanley & Co. Incorporated and Scotia Capital (USA) Inc.

         5.1            Opinion of Latham & Watkins

         5.2            Opinion of James W. Baehren

        10.1            Amended and Restated Owens-Illinois Supplemental Retirement
                        Benefit Plan (filed as Exhibit 10.1 to Owens-Illinois,
                        Inc.'s Quarterly Report on Form 10-Q for the quarter ended
                        June 30, 1998, File No. 1-9576, and incorporated herein by
                        reference)

        10.2            First Amendment to Amended and Restated Owens-Illinois
                        Supplemental Retirement Benefit Plan (filed as Exhibit 10.3
                        to Owens-Illinois, Inc.'s Annual Report on Form 10-K for the
                        year ended December 31, 2000, File No. 1-9576, and
                        incorporated herein by reference)

        10.3            Form of Employment Agreement between Owens-Illinois, Inc.
                        and various Employees (filed as Exhibit 10(m) to
                        Owens-Illinois, Inc.'s Annual Report on Form 10-K for the
                        year ended December 31, 1987, File No. 1-9576, and
                        incorporated herein by reference)

        10.4            Stock Option Plan for Directors of Owens-Illinois, Inc.
                        (filed as Exhibit 4.3 to Owens-Illinois, Inc.'s Form S-8,
                        File No. 33-57141, and incorporated herein by reference)

        10.5            First Amendment to Stock Option Plan for Directors of
                        Owens-Illinois, Inc. (filed as Exhibit 10.10 to
                        Owens-Illinois, Inc.'s Annual Report on Form 10-K for the
                        year ended December 31, 1995, File No. 1-9576, and
                        incorporated herein by reference)

        10.6            Form of Non-Qualified Stock Option Agreement for use under
                        the Stock Option Plan for Directors of Owens-Illinois, Inc.
                        (filed as Exhibit 4.4 to Owens-Illinois, Inc.'s Form S-8,
                        File No. 33-57141, and incorporated herein by reference)

        10.7            Second Amended and Restated Stock Option Plan for Key
                        Employees of Owens-Illinois, Inc. (filed as Exhibit 10.20 to
                        Owens-Illinois, Inc.'s Annual Report on Form 10-K for the
                        year ended December 31, 1994, File No. 1-9576, and
                        incorporated herein by reference)

        10.8            First Amendment to Second Amended and Restated Stock Option
                        Plan for Key Employees of Owens-Illinois, Inc. (filed as
                        Exhibit 10.13 to Owens-Illinois, Inc.'s Annual Report on
                        Form 10-K for the year ended December 31, 1995, File
                        No. 1-9576, and incorporated herein by reference)

        10.9            Second Amendment to Second Amended and Restated Stock Option
                        Plan for Key Employees of Owens-Illinois, Inc. (filed as
                        Exhibit 10.1 to Owens-Illinois, Inc.'s Quarterly Report on
                        Form 10-Q for the quarter ended June 30, 1997, File
                        No. 1-9576, and incorporated herein by reference)

        10.10           Third Amendment to Second Amended and Restated Stock Option
                        Plan for Key Employees of Owens-Illinois, Inc. (filed as
                        Exhibit 10.1 to Owens-Illinois, Inc.'s Quarterly Report on
                        Form 10-Q for the quarter ended September 30, 2000, File
                        No. 1-9576, and incorporated herein by reference)

        10.11           Form of Non-Qualified Stock Option Agreement for use under
                        the Amended and Restated Stock Option Plan for Key Employees
                        of Owens-Illinois, Inc. (filed as Exhibit 10.21 to Owens-
                        Illinois, Inc.'s Annual Report on Form 10-K for the year
                        ended December 31, 1994, File No. 1-9576, and incorporated
                        herein by reference)

        10.12           Amended and Restated Owens-Illinois, Inc. Senior Management
                        Incentive Plan (filed as Exhibit 10.15 to Owens-Illinois,
                        Inc.'s Annual Report on Form 10-K for the year ended
                        December 31, 1993, File No. 1-9576, and incorporated herein
                        by reference)






       EXHIBIT
       NUMBER           EXHIBIT DESCRIPTION
       -------          -------------------
                     
        10.13           First Amendment to Amended and Restated Owens-Illinois, Inc.
                        Senior Management Incentive Plan (filed as Exhibit 10.19 to
                        Owens-Illinois, Inc.'s Annual Report on Form 10-K for the
                        year ended December 31, 1995, File No. 1-9576, and
                        incorporated herein by reference)

        10.14           Second Amendment to Amended and Restated Owens-Illinois,
                        Inc. Senior Management Incentive Plan (filed as
                        Exhibit 10.2 to Owens-Illinois, Inc.'s Quarterly Report on
                        Form 10-Q for the quarter ended June 30, 1997, File
                        No. 1-9576, and incorporated herein by reference)

        10.15           Third Amendment to Amended and Restated Owens-Illinois, Inc.
                        Senior Management Incentive Plan (filed as Exhibit 10.3 to
                        Owens-Illinois, Inc.'s Quarterly Report on Form 10-Q for
                        the quarter ended June 30, 1997, File No. 1-9576, and
                        incorporated herein by reference)

        10.16           Amended and Restated Owens-Illinois, Inc. Performance Award
                        Plan (filed as Exhibit 10.16 to Owens-Illinois, Inc.'s
                        Annual Report on Form 10-K for the year ended December 31,
                        1993, File No. 1-9576, and incorporated herein by reference)

        10.17           First Amendment to Amended and Restated Owens-Illinois, Inc.
                        Performance Award Plan (filed as Exhibit 10.4 to
                        Owens-Illinois, Inc.'s Quarterly Report on Form 10-Q for the
                        quarter ended June 30, 1997, File No. 1-9576, and
                        incorporated herein by reference)

        10.18           Owens-Illinois, Inc. Directors Deferred Compensation Plan
                        (filed as Exhibit 10.26 to Owens-Illinois, Inc.'s Annual
                        Report on Form 10-K for the year ended December 31, 1995,
                        File No. 1-9576, and incorporated herein by reference)

        10.19           First Amendment to Owens-Illinois, Inc. Directors Deferred
                        Compensation Plan (filed as Exhibit 10.27 to Owens-Illinois,
                        Inc.'s Annual Report on Form 10-K for the year ended
                        December 31, 1995, File No. 1-9576, and incorporated herein
                        by reference)

        10.20           Second Amendment to Owens-Illinois, Inc. Directors Deferred
                        Compensation Plan (filed as Exhibit 10.2 to Owens-Illinois,
                        Inc.'s Quarterly Report on Form 10-Q for the quarter ended
                        March 31, 1997, File No. 1-9576, and incorporated herein by
                        reference)

        10.21           Amended and Restated 1997 Equity Participation Plan of
                        Owens-Illinois, Inc. (filed as Exhibit 10.1 to
                        Owens-Illinois, Inc.'s Quarterly Report on Form 10-Q for the
                        quarter ended June 30, 1999, File No. 1-9576, and
                        incorporated herein by reference)

        10.22           Form of Non-Qualified Stock Option Agreement for use under
                        the Amended and Restated 1997 Equity Participation Plan of
                        Owens-Illinois, Inc. (filed as Exhibit 4.3 to
                        Owens-Illinois, Inc.'s Form S-8, File No. 333-47691, and
                        incorporated herein by reference)

        10.23           Form of Restricted Stock Agreement for use under the Amended
                        and Restated 1997 Equity Participation Plan of
                        Owens-Illinois, Inc. (filed as Exhibit 4.4 to
                        Owens-Illinois, Inc.'s Form S-8, File No. 333-47691, and
                        incorporated herein by reference)

        10.24           Form of Restricted Stock Agreement for use under the Amended
                        and Restated 1997 Equity Participation Plan of
                        Owens-Illinois, Inc. (filed as Exhibit 10.2 to
                        Owens-Illinois, Inc.'s Quarterly report on Form 10-Q for the
                        quarter ended June 30, 1999, File No. 1-9576, and
                        incorporated herein by reference)

        10.25           Amendment to Form of Restricted Stock Agreement for use
                        under the Amended and Restated 1997 Equity Participation
                        Plan of Owens-Illinois, Inc. (filed as Exhibit 10.31 to
                        Owens-Illinois, Inc.'s Annual Report on Form 10-K for the
                        year ended December 31, 2001, and incorporated herein by
                        reference)

        10.26           Form of Phantom Stock Agreement for use under the Amended
                        and Restated 1997 Equity Participation Plan of
                        Owens-Illinois, Inc. (filed as Exhibit 10.3 to
                        Owens-Illinois, Inc.'s Quarterly Report on Form 10-Q for the
                        quarter ended June 30, 1999, File No. 1-9576, and
                        incorporated herein by reference)






       EXHIBIT
       NUMBER           EXHIBIT DESCRIPTION
       -------          -------------------
                     
        10.27           Amendment to the Phantom Stock Agreement (filed as
                        Exhibit 10.33 to Owens-Illinois, Inc.'s Annual Report on
                        Form 10-K for the year ended December 31, 2001, and
                        incorporated herein by reference)

        10.28           Owens-Illinois, Inc. Executive Life Insurance Plan (filed as
                        Exhibit 10.1 to Owens-Illinois, Inc.'s Quarterly Report on
                        Form 10-Q for the quarter ended March 31, 2000, File
                        No. 1-9576, and incorporated herein by reference)

        10.29           Owens-Illinois, Inc. Death Benefit Only Agreement (filed as
                        Exhibit 10.2 to Owens-Illinois, Inc.'s Quarterly Report on
                        Form 10-Q for the quarter ended March 31, 2000, File
                        No. 1-9576, and incorporated herein by reference)

        10.30           Owens-Illinois, Inc. Executive Deferred Savings Plan (filed
                        as Exhibit 10.1 to Owens-Illinois, Inc.'s Quarterly Report
                        on Form 10-Q for the quarter ended September 30, 2001, File
                        No. 1-9576, and incorporated herein by reference)

        12.1            Statement of Computation of Ratios

        21.1            Subsidiaries of the Registrants

        23.1            Consent of Latham & Watkins (included in Exhibit 5.1)

        23.2            Consent of James W. Baehren (included in Exhibit 5.2)

        23.3            Consent of Ernst & Young LLP

        24.1            Power of Attorney (including those filed herein as Part II
                        pages)

        25.1            Statement of Eligibility under the Trust Indenture Act of
                        1939 of U.S. Bank National Association (Form T-1)

        99.1            Letter of Transmittal with Respect to the Exchange Offer

        99.2            Notice of Guaranteed Delivery with Respect to the Exchange
                        Offer

        99.3            Letter to DTC Participants Regarding the Exchange Offer

        99.4            Letter to Beneficial Holders Regarding the Exchange Offer

        99.5            Guidelines for Certification of Taxpayer Identification
                        Number on Substitute Form W-9

EX-3.1

                                                                     EXHIBIT 3.1

                          CERTIFICATE OF INCORPORATION

                                       OF

                      OI GLASS CONTAINER DOMESTIC STS INC.

               1. The name of the corporation is:
                      OI Glass Container Domestic STS Inc.

               2. The address of its registered office in the State of Delaware
is 229 South State Street in the City of Dover, County of Kent. The name of its
registered agent at such address is The Prentice-Hall Corporation System, Inc.

               3. The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of the State of Delaware.

               4. The total number of shares of all classes of stock that the
corporation shall have authority to issue is 1,000 shares, all of which are
Common Stock with a par value of $0.01.

               5. The name and mailing address of the incorporator is

                                Robert J. Palme
                                Latham & Watkins
                                885 Third Avenue
                                New York, New York 10022

               6. In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to make, alter or
repeal the bylaws of the corporation.

               7. Election of directors need not be by written ballot unless the
bylaws of the corporation shall so provide.



               1. No director of this corporation shall be personally liable to
the corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the General Corporation Law of the
State of Delaware, or (iv) for any transaction from which the director derived
an improper personal benefit.

               I, THE UNDERSIGNED, being the sole incorporator hereinbefore
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, do make this certificate, herein
declaring and certifying that this is my act and deed and the facts herein
stated are true, and accordingly have hereunto set my hand this 8th day of
March, 1987.

                                                     /s/ ROBERT J. PALME
                                                     ---------------------------
                                                     Robert J. Palme
                                                     Incorporator

EX-3.2

                                                                     EXHIBIT 3.2

                            CERTIFICATE OF AMENDMENT
                                       OF
                          CERTIFICATE OF INCORPORATION
                                       OF
                      OI GLASS CONTAINER DOMESTIC STS INC.
                            BEFORE PAYMENT OF CAPITAL

               --------------------------------------------------
                     PURSUANT TO SECTION 241 OF THE GENERAL
                    CORPORATION LAW OF THE STATE OF DELAWARE
               --------------------------------------------------

               THE UNDERSIGNED, being the sole incorporator of OI Glass
Container Domestic STS Inc. does hereby certify:

               FIRST: That Article One of the Certificate of Incorporation is
amended to read as follows:

               1.   The name of the corporation is:

                    OI Glass Container STS Inc.

               SECOND: That such amendment has been duly adopted in accordance
with the provisions of Section 241 of the General Corporation Law of the State
of Delaware, and the corporation has not received any payment for any of its
stock.

               IN WITNESS WHEREOF, I have hereunto set my hand and seal the 9th
day of March, 1987.

                                                     /s/ Robert J. Palme
                                                     ---------------------------
                                                     Robert J. Palme
                                                     Incorporator

EX-3.3

                                                                     EXHIBIT 3.3

                            CERTIFICATE OF AMENDMENT
                                       OF
                          CERTIFICATE OF INCORPORATION
                                       OF
                      OI GLASS CONTAINER DOMESTIC STS INC.

                   ------------------------------------------
                    ADOPTED IN ACCORDANCE WITH THE PROVISIONS
                    OF SECTION 242 OF THE GENERAL CORPORATION
                          LAW OF THE STATE OF DELAWARE
                   ------------------------------------------

               We, the Vice President and Assistant Secretary of OI Glass
Container STS Inc., a corporation existing under the laws of the State of
Delaware, do hereby certify as follows:

               FIRST: That the Certificate of Incorporation of said corporation
has been amended as follows:

               By striking out the whole of Article 1 thereof as it now exists
and inserting in lieu and instead thereof a new Article 1, reading as follows:

               "l. The name of the corporation is:

               Owens-Illinois Glass Container Inc."

               SECOND: That such amendment has been duly adopted in accordance
with the provisions of the General Corporation Law of the State of Delaware by
the unanimous written consent of all of the stockholders entitled to vote in
accordance with the provisions of Section 228 of the General Corporation Law of
the State of Delaware.



               IN WITNESS WHEREOF, we have signed this certificate this 8TH day
of April, 1987.

                                                     /s/  THOMAS L. YOUNG
                                                     ---------------------------
                                                     Thomas L. Young
                                                     Vice President

ATTEST:

/s/  EDWARD A. GILHULY
- ----------------------
Edward A. Gilhuly
Assistant Secretary

EX-3.4

                                                                     EXHIBIT 3.4

                    CERTIFICATE OF CHANGE OF REGISTERED AGENT

                                       AND

                                REGISTERED OFFICE

OWENS-ILLINOIS GLASS CONTAINER INC., a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware,

DOES HEREBY CERTIFY:

     The present registered agent of the corporation is The Prentice-Hall
Corporation System, Inc. and the present registered office of the corporation is
in the county of Kent.

     The Board of Directors of OWENS-ILLINOIS GLASS CONTAINER INC.
adopted the following resolution on the 26th day of May, 1986.

     Resolved, that the registered office of

     in the state of Delaware be and it hereby is changed to Corporation Trust
     Center, 1209 Orange Street, in the City of Wilmington, County of New
     Castle, and the authorization of the present registered agent of this
     corporation be and the same is hereby withdrawn, and THE CORPORATION TRUST
     COMPANY, shall be and is hereby constituted and appointed the registered
     agent of this corporation at the address of its registered office.

     IN WITNESS WHEREOF, OWENS-ILLINOIS GLASS CONTAINER INC.
has caused this statement to be signed by David A. Ward, its Vice Present and
attested by Thomas L. Young, its           Secretary this 26th day of May, 1988.

                                                     By:  /s/  DAVID A. WARD
                                                          ------------------
                                                          Vice President

ATTEST:

By: /s/  THOMAS L. YOUNG
    --------------------
        Secretary

EX-3.5

                                                                     EXHIBIT 3.5

                              CERTIFICATE OF MERGER

                                       OF

                            O-I BROCKWAY GLASS, INC.

                                      INTO

                       OWENS-ILLINOIS GLASS CONTAINER INC.

               The undersigned corporations organized and existing under and by
virtue of the General Corporation Law of the state of Delaware

               DO HEREBY CERTIFY:

               FIRST: That the name and state of incorporation of each of the
constituent corporations of the merger are as follows:

                       NAME                        STATE OF INCORPORATION

               O-I Brockway Glass, Inc.                     Delaware
               Owens-Illinois Glass Container Inc.          Delaware

               SECOND: That an Agreement of Merger between the parties to the
merger has been approved, adopted, certified, executed and acknowledged by each
of the constituent corporations in accordance with the requirements of Section
251 of the General Corporation Law of the State of Delaware.

               THIRD: That the name of the surviving corporation of the merger
is Owens-Illinois Glass Container Inc., which shall herewith be changed to
OWENS-BROCKWAY GLASS CONTAINER INC.

               FOURTH: That Owens-Brockway Packaging Inc., a Delaware
corporation, is the owner of all of the stock of each of the constituent
corporations.



               FIFTH: That as an effect of the merger ARTICLE FIRST of the
Certificate of Incorporation of Owens-Illinois Glass Container Inc. shall be
deemed amended in its entirety to read as follows:

                             "FIRST:        The name of this corporation
                                        shall be Owens-Brockway Glass
                                        Container Inc."

Otherwise, the Certificate of Incorporation of Owens-Illinois Glass Container
Inc., a Delaware corporation which will survive the merger, shall be the
Certificate of Incorporation of the surviving corporation.

               SIXTH: That the executed Agreement of Merger is on file at the
principal place of business of the surviving corporation. The address of the
principal place of business of the surviving corporation is One SeaGate, Toledo,
Ohio 43666.

               SEVENTH: That a copy of the Agreement of Merger will be furnished
by the surviving corporation on request and without cost to any stockholder of
either constituent corporation.

               EIGHTH: This Certificate of Merger shall be effective on April
30, 1990.

O-I BROCKWAY GLASS, INC.                OWENS-ILLINOIS GLASS
                                        CONTAINER INC.

By:  /s/  DAVID G. VAN HOOSER           By:  /s/  DAVID G. VAN HOOSER
     ------------------------                ------------------------
     David G. Van Hooser                     David G. Van Hooser
     Vice President and Treasurer            Vice President and Treasurer

Attest:  /s/  ARTHUR H. SMITH           Attest:  /s/  ARTHUR H. SMITH
         --------------------                    --------------------
         Arthur H. Smith                         Arthur H. Smith
         Assistant Secretary                     Assistant Secretary

EX-3.6

                                                                     EXHIBIT 3.6

                                    ARTICLE I

                                     OFFICES

               Section 1. The registered office shall be in the City of Dover,
County of Kent, State of Delaware.

               Section 2. The Corporation may also have offices at such other
places both within and without the State of Delaware as the board of directors
may from time to time determine or the business of the Corporation may require.

                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS

               Section 1. All meetings of the stockholders shall be held at any
place within or without the State of Delaware as shall be designated from time
to time by the board of directors. In the absence of any such designation,
stockholders' meetings shall be held at the principal executive office of the
Corporation.

               Section 2. An annual meeting of stockholders shall be held each
year on a date and at a time designated by the board of directors. At each
annual meeting directors shall be elected and any other proper business may be
transacted.

               Section 3. A majority of the stock issued and outstanding and
entitled to vote at any meeting of stockholders, the holders of which are
present in person or represented by proxy, shall constitute a quorum for the
transaction of business except as otherwise provided by law, by the Certificate
of Incorporation, or by these By-Laws. A quorum, once established, shall not be
broken by the withdrawal of enough votes to leave less than a quorum and the
votes present may continue to transact business until adjournment. If, however,
such quorum shall not be present or represented at any meeting of the
stockholders, a majority of the voting stock represented in

                                        1


person or by proxy may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote thereat.

               Section 4. When a quorum is present at any meeting, the vote of
the holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of law, or the
Certificate of Incorporation, or these By-Laws, a different vote is required in
which case such express provision shall govern and control the decision of such
question.

               Section 5. At each meeting of the stockholders, each stockholder
having the right to vote may vote in person or may authorize another person or
persons to act for him by proxy appointed by an instrument in writing subscribed
by such stockholder and bearing a date not more than three years prior to said
meeting, unless said instrument provides for a longer period. All proxies must
be filed with the secretary of the Corporation at the beginning of each meeting
in order to be counted in any vote at the meeting. Each stockholder shall have
one vote for each share of stock having voting power, registered in his name on
the books of the Corporation on the record date set by the board of directors as
provided in Article V, Section 6 hereof. All elections shall be had and all
questions decided by a plurality vote.

                                        2


               Section 6. Special meetings of the stockholders, for any purpose,
or purposes, unless otherwise prescribed by statute or by the Certificate of
Incorporation, may be called by the president and shall be called by the
president or the secretary at the request in writing of a majority of the board
of directors, or at the request in writing of stockholders owning a majority in
amount of the entire capital stock of the Corporation issued and outstanding,
and entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.

               Section 7. Whenever stockholders are required or permitted to
take any action at a meeting; a written notice of the meeting shall be given,
which notice shall state the place, date and hour of the meeting, and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. The written notice of any meeting shall be given to each stockholder
entitled to vote at such meeting not less than ten nor more than sixty days
before the date of the meeting. If mailed, notice is given when deposited in the
United States mail, postage prepaid, directed to the stockholder at his address
as it appears on the records of the Corporation.

               Section 8. The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The

                                        3


list shall also be produced and kept at the time and place of the meeting during
the whole time thereof, and may be inspected by any stockholder who is present.

               Section 9. Unless otherwise provided in the Certificate of
Incorporation, any action required to be taken at any annual or special meeting
of stockholders of the Corporation, or any action which may be taken at any
annual or special meeting of such stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.

                                   ARTICLE III

                                    DIRECTORS

               Section 1. The board of directors shall consist of a minimum of
one (1) and a maximum of eleven (11) directors. The number of directors shall be
fixed or changed from time to time, within the minimum and maximum, by the then
appointed directors. The directors need not be stockholders. The directors shall
be elected at the annual meeting of the stockholders, except as provided in
Section 2 of this Article III, and each director elected shall hold office until
his successor is elected and qualified; provided, however, that unless otherwise
restricted by the Certificate of Incorporation or by law, any director or the
entire board of directors may be removed, either with or without cause, from the
board of directors at any meeting of stockholders by a majority of the stock
represented and entitled to vote thereat.

                                        4


               Section 2. Vacancies on the board of directors by reason of
death, resignation, retirement, disqualification, removal from office, or
otherwise, and newly created directorships resulting from any increase in the
authorized number of directors may be filled by a majority of the directors then
in office, although less than a quorum, or by a sole remaining director. The
directors so chosen shall hold office until the next annual election of
directors and until their successors are duly elected and shall qualify, unless
sooner displaced. If there are no directors in office, then an election of
directors may be held in the manner provided by statute. If, at the time of
filling any vacancy or any newly created directorship, the directors then
in-office shall constitute less than a majority of the whole board (as
constituted immediately prior to any such increase), the Court of Chancery may,
upon application of any stockholder or stockholders holding at least ten percent
of the total number of the shares at the time outstanding having the right to
vote for such directors, summarily order an election to be held to fill any such
vacancies or newly created directorships, or to replace the directors chosen by
the directors then in office.

               Section 3. The property and business of the Corporation shall be
managed by or under the direction of its board of directors. In addition to the
powers and authorities by these By-Laws expressly conferred upon them, the board
of directors may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by statute or by the Certificate of
Incorporation or by these By-Laws directed or required to be exercised or done
by the stockholders.

                       MEETINGS OF THE BOARD OF DIRECTORS

               Section 4. The directors may hold their meetings and have one or
more offices, and keep the books of the Corporation outside of the State of
Delaware.

                                        5


               Section 5. Regular meetings of the board of directors may be held
without notice at such time and place as shall from time to time be determined
by the board.

               Section 6. Special meetings of the board of directors may be
called by the president on twenty-four hours' notice to each director, either
personally or by mail or by telegram; special meetings shall be called by the
president or the secretary in like manner and on like notice on the written
request of two directors unless the board of directors consists of only one
director; in which case special meetings shall be called by the president or
secretary in like manner or on like notice on the written request of the sole
director.

               Section 7. At all meetings of the board of directors a majority
of the authorized number of directors shall be necessary and sufficient to
constitute a quorum for the transaction of business, and the vote of a majority
of the directors present at any meeting at which there is a quorum, shall be the
act of the board of directors, except as may be otherwise specifically provided
by statute, by the-Certificate of Incorporation or by these By-Laws. If a quorum
shall not be present at any meeting of the board of directors the directors
present thereat may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present. If only one
director is authorized, such sole director shall constitute a quorum.

               Section 8. Unless otherwise restricted by the Certificate of
Incorporation or these By-Laws, any action required or permitted to be taken at
any meeting of the board of directors or of any committee thereof may be taken
without a meeting, if all members of the board of directors or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the board of directors or committee.

                                        6


               Section 9. Unless otherwise restricted by the Certificate of
Incorporation or these By-Laws, members of the board of directors, or any
committee designated by the board of directors, may participate in a meeting of
the board of directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at such meeting.

                             COMMITTEES OF DIRECTORS

               Section 10. The board of directors may, by resolution passed by a
majority of the whole board of directors, designate one or more committees, each
such committee to consist of one or more of the directors of the corporation.

               The board of directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of a
member of a committee, the member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the board of directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in a resolution of the board of directors,
shall have and may exercise all the power and authority of the board of
directors in the management of the business and affairs of the Corporation, and
may authorize the seal of the Corporation to be affixed to all papers which may
require it; but no such committee shall have the power or authority in reference
to amending the Certificate of Incorporation (except that a committee may, to
the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the board of directors, fix the
designations and any of the preferences or rights of such shares relating to

                                        7


dividends, redemption, dissolution, any distribution of assets of the
Corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes or any other series of the same or any other class
or classes of stock of the Corporation or fix the number of shares of any series
of stock or authorize the increase or decrease of the shares of any series),
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
Corporation's property and assets, recommending to the stockholders a
dissolution of the Corporation or a revocation of a dissolution, or amending the
By-Laws of the Corporation; and, unless the resolution, By-Laws, or the
Certificate of Incorporation expressly so provide, no such committee shall have
the power or authority to declare a dividend, to authorize the issuance of
stock, or to adopt a Certificate of Ownership and Merger.

               Section 11. Each committee shall keep regular minutes of its
meetings and report the same to the board of directors when required.

                            COMPENSATION OF DIRECTORS

               Section 12. Unless otherwise restricted by the Certificate of
Incorporation or these By-Laws, the board of directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the board of directors and may be paid
a fixed sum for attendance at each meeting of the board of directors or a stated
salary as director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.

                                        8


                                 INDEMNIFICATION

               Section 13. The Corporation shall indemnify every person who was
or is a party or is or was threatened to be made a party to any action, suit, or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was a director, officer or employee of the Corporation
or, while a director, officer or employee of the Corporation, is or was serving
at the request of the Corporation as a director, officer, employee, agent or
trustee of another Corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against expenses (including counsel fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding, to the full extent
permitted by applicable law. Expenses incurred by a person who is or was a
director or officer of the Corporation in appearing at, participating in or
defending any such action, suit or proceeding shall be paid by the Corporation
at reasonable intervals in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by, or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized by this Section 13.
If a claim under this Section 13 is not paid in full by the Corporation within
ninety days after a written claim has been received by the Corporation, the
claimant may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant shall be paid also the expense of prosecuting such claim. It shall
be a defense to any such action (other than an action brought to enforce a claim
for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the Delaware General Corporation Law or
other

                                        9


applicable law for the Corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including its board of directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
proper in the circumstances because he has met the applicable standard of
conduct set forth in the Delaware General Corporation Law or other applicable
law, nor an actual determination by the Corporation (including its board of
directors, independent legal counsel, or its stockholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.

                                   ARTICLE IV

                                    OFFICERS

               Section 1. The officers of the Corporation shall be chosen by the
board of directors and shall include a president, a vice president and a
secretary. The Corporation may also have at the discretion of the board of
directors such other officers as are desired, including a chairman of the board,
additional vice presidents, one or more assistant secretaries, a treasurer, one
or more assistant treasurers, and such other officers as may be appointed in
accordance with the provisions of Section 3 of this Article IV. In the event
there are two or more vice presidents, then one or more may be designated as
executive vice president, senior vice president, vice president marketing, or
other similar or dissimilar title. At the time of the election of officers, the
directors may by resolution determine the order of their rank. Any number of
offices may be held by the same person, unless the Certificate of Incorporation
or these By-Laws otherwise provide.

                                       10


               Section 2. The board of directors, at its first meeting after
each annual meeting of stockholders, shall choose the officers of the
Corporation.

               Section 3. The board of directors may appoint such other officers
and agents, as it shall deem necessary, who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board of directors.

               Section 4. The salaries of all officers and agents of the
Corporation shall be fixed by the board of directors.

               Section 5. The officers of the Corporation shall hold office
until their successors are chosen and qualify in their stead. Any officer
elected or appointed by the board of directors may be removed at any time,
either with or without cause, by the board of directors. If the office of any
officer or officers becomes vacant for any reason, the vacancy may be filled by
the board of directors.

                              CHAIRMAN OF THE BOARD

               Section 6. The chairman of the board, if such an officer be
elected, shall, if present, preside at all meetings of the board of directors
and exercise and perform such other powers and duties as may be from time to
time assigned to him by the board of directors or prescribed by these By-Laws.
If there is no president, the chairman of the board shall, in addition, be the
chief executive officer of the Corporation and shall have the powers and duties
prescribed in Section 7 of this Article IV.

                                    PRESIDENT

               Section 7. Subject to such supervisory powers, if any, as may be
given by the board of directors to the chairman of the board, if there be such
an officer, the president shall be the chief executive officer of the
Corporation and shall, subject to the control of the board of

                                       11


directors, have general supervision, direction and control of the business and
officers of the Corporation. He shall be an ex-officio member of all committees
and shall have the general powers and duties of management usually vested in the
office of president and chief executive officer of Corporations, and shall have
such other powers and duties as may be prescribed by the board of directors or
these By-Laws.

                                 VICE PRESIDENTS

               Section 8. In the absence or disability of the president, the
vice presidents in order of their rank as fixed by the board of directors, or if
not ranked, the vice president designated by the board of directors, shall
perform all the duties of the president, and when so acting shall have all the
powers of and be subject to all the restrictions upon the president. The vice
presidents shall have such other duties as from time to time may be prescribed
for them, respectively, by the board of directors.

                       SECRETARY AND ASSISTANT SECRETARIES

               Section 9. The secretary shall record the proceedings of the
meetings of the stockholders and directors in a book to be kept for that
purpose; and shall perform like duties for the standing committees when required
by the board of directors. He shall give, or cause to be given, notice of all
meetings of the stockholders and of the board of directors, and shall perform
such other duties as may be prescribed by the board of directors or these
By-Laws. He shall keep in safe custody the seal of the Corporation, and affix
the same to any instrument requiring it, and when so affixed it shall be
attested by his signature or by the signature of an assistant secretary. The
board of directors may give general authority to any other officer to affix the
seal of the Corporation and to attest the affixing by his signature.

                                       12


               Section 10. The assistant secretary, or if there be more than
one, the assistant secretaries in the order determined by the board of
directors, or if there be no such determination, the assistant secretary
designated by the board of directors, shall, in the absence or disability of the
secretary, perform the duties and exercise the powers of the secretary and shall
perform such other duties and have such other powers as the board of directors
may from time to time prescribe.

                       TREASURER AND ASSISTANT TREASURERS

               Section 11. The treasurer, if such an officer is elected, shall
have the custody of the corporate funds and securities and shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all moneys, and other valuable effects in the name
and to the credit of the Corporation, in such depositories as may be designated
by the board of directors. He shall disburse the funds of the Corporation as may
be ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the board of directors, at its regular
meetings or when the board of directors so requires, an account of all his
transactions as treasurer and of the financial condition of the Corporation. If
required by the board of directors, he shall give the Corporation a bond, in
such sum and with such surety or sureties as shall be satisfactory to the board
of directors, for the faithful performance of the duties of his office and for
the restoration to the Corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the Corporation.

               Section 12. The assistant treasurer, or if there shall be more
than one, the assistant treasurers in the order determined by the board of
directors, or if there be no such determination,

                                       13


the assistant treasurer designated by the board of directors, shall, in the
absence or disability of the treasurer, perform the duties and exercise the
powers of the treasurer and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.

                                    ARTICLE V

                              CERTIFICATES OF STOCK

               Section 1. Every holder of stock of the Corporation shall be
entitled to have a certificate signed by, or in the name of the Corporation by,
the chairman or vice chairman of the board of directors, or the president or a
vice president, and by the secretary or an assistant secretary, or the treasurer
or an assistant treasurer of the Corporation, certifying the number of shares
represented by the certificate owned by such stockholder in the Corporation.

               Section 2. Any or all of the signatures on the certificate may be
a facsimile. In case any officer, transfer agent, or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent, or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if he were
such officer, transfer agent, or registrar at the date of issue.

               Section 3. If the Corporation shall be authorized to issue more
than one class of stock or more than one series of any class, the powers,
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof and the qualification,
limitations or restrictions of such preferences and/or rights shall be set forth
in full or summarized on the face or back of the certificate which the
Corporation shall issue to represent such class or series of stock provided
that, except as otherwise provided in Section 202 of the General Corporation Law
of Delaware, in lieu of the foregoing requirements, there may be

                                       14


set forth on the face or back of the certificate which the Corporation shall
issue to represent such class or series of stock, a statement that the
Corporation will furnish without charge to each stockholder who so requests the
powers, designations, preferences and relative, participating, optional or other
special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.

                     LOST, STOLEN OR DESTROYED CERTIFICATES

               Section 4. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the Corporation alleged to have been lost, stolen or
destroyed, upon the making, of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the board of directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the Corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the Corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.

                               TRANSFERS OF STOCK

               Section 5. Upon surrender to the Corporation, or the transfer
agent of the Corporation, of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

                                       15


                               FIXING RECORD DATE

               Section 6. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of the
stockholders, or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change conversion or exchange of stock or
for the purpose of any other lawful action, the board of directors may fix a
record date which shall not be more than sixty nor less than ten days before the
date of such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date for the adjourned
meeting.

                             REGISTERED STOCKHOLDERS

               Section 7. The Corporation shall be entitled to treat the holder
of record of any share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or other claim or
interest in such share on the part of any other person, whether or not it shall
have express or other notice thereof, save as expressly provided by the laws of
the State of Delaware.

                                   ARTICLE VI

                               GENERAL PROVISIONS

                                    DIVIDENDS

               Section 1. Dividends upon the capital stock of the Corporation,
subject to the provisions of the Certificate of Incorporation, if any, may be
declared by the board of directors at

                                       16


any regular or special meeting, pursuant to law. Dividends may be paid in cash,
in property, or in shares of the capital stock, subject to the provisions of the
Certificate of Incorporation.

               Section 2. Before payment of any dividend there may be set aside
out of any funds of the Corporation available for dividends such sum or sums as
the directors from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for such other
purpose as, the directors shall think conducive to the interests of the
Corporation, and the directors may abolish any such reserve.

                                     CHECKS

               Section 3. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers as the board of
directors may from time to time designate.

                                   FISCAL FEAR

               Section 4. The fiscal year of the Corporation shall be fixed by
resolution of the board of directors.

                                 CORPORATE SEAL

               Section 5. The corporate seal shall have inscribed thereon the
name of the Corporation and the words "Corporate Seal. Delaware". Said seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.

                                     NOTICES

               Section 6. Whenever, under the provisions of the Certificate of
Incorporation or of these By-Laws or as required by law, notice is required to
be given to any director or stockholder, it shall not be construed to mean
personal notice, but such notice may be given in writing, by mail, addressed to
such director or stockholder, at his address as it appears on the

                                       17


records of the Corporation, with postage thereon prepaid, and such notice shall
be deemed to be given at the time when the same shall be deposited in the United
States mail. Notice to directors may also be given by telegram.

               Section 7. Whenever any notice is required to be given by law or
under the provisions of the Certificate of Incorporation or of these By-Laws, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.

                                   ARTICLE VII

                                   AMENDMENTS

               Section 1. These By-Laws may be altered, amended or repealed or
new By-Laws may be adopted by the stockholders or by the board of directors,
when such power is conferred upon the board of directors by the Certificate of
Incorporation, at any regular meeting of the stockholders or of the board of
directors or at any special meeting of the stockholders or of the board of
directors if notice of such alteration, amendment, repeal or adoption of new
By-Laws be contained in the notice of such special meeting. If the power to
adopt, amend or repeal these By-Laws is conferred upon the board of directors by
the Certificate of Incorporation it shall not divest or limit the power of the
stockholders to adopt, amend or repeal these By-Laws.

                                       18

EX-4.1

                                                                     EXHIBIT 4.1

- --------------------------------------------------------------------------------

                       OWENS-BROCKWAY GLASS CONTAINER INC.

                                     ISSUER

                                       AND

               THE GUARANTORS SET FORTH IN ANNEX A ATTACHED HERETO

                        --------------------------------

                                    INDENTURE

                          DATED AS OF JANUARY 24, 2002

                        ---------------------------------

                         U.S. BANK NATIONAL ASSOCIATION

                                     TRUSTEE

- --------------------------------------------------------------------------------



                                TABLE OF CONTENTS



                                                                                                       PAGE
                                                                                                      
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.....................................................1

     Section 1.01.  Certain Definitions...................................................................1
     Section 1.02.  Other Definitions....................................................................10
     Section 1.03.  Incorporation by Reference of Trust Indenture Act....................................11
     Section 1.04.  Rules of Construction................................................................11

ARTICLE 2. THE SECURITIES................................................................................11

     Section 2.01.  Unlimited in Amount, Issuable in Series, Form and Dating.............................11
     Section 2.02.  Execution and Authentication.........................................................14
     Section 2.03.  Registrar and Paying Agent...........................................................15
     Section 2.04.  Paying Agent to Hold Money in Trust..................................................15
     Section 2.05.  Holder Lists.........................................................................16
     Section 2.06.  Transfer and Exchange................................................................16
     Section 2.07.  Replacement Securities...............................................................28
     Section 2.08.  Outstanding Securities...............................................................28
     Section 2.09.  Temporary Securities.................................................................29
     Section 2.10.  Cancellation.........................................................................29
     Section 2.11.  Defaulted Interest...................................................................29
     Section 2.12.  Special Record Dates.................................................................30
     Section 2.13.  CUSIP and ISIN Numbers...............................................................30

ARTICLE 3. REDEMPTION....................................................................................31

     Section 3.01.  Notices to Trustee...................................................................31
     Section 3.02.  Selection of Securities to Be Redeemed...............................................31
     Section 3.03.  Notice of Redemption.................................................................32
     Section 3.04.  Effect of Notice of Redemption.......................................................32
     Section 3.05.  Deposit of Redemption Price..........................................................33
     Section 3.06.  Securities Redeemed in Part..........................................................33

ARTICLE 4. COVENANTS.....................................................................................33

     Section 4.01.  Payment of Securities................................................................33
     Section 4.02.  Maintenance of Office or Agency......................................................33
     Section 4.03.  Commission Reports...................................................................34
     Section 4.04.  Compliance Certificate...............................................................35
     Section 4.05.  Taxes................................................................................35
     Section 4.06.  Stay, Extension and Usury Laws.......................................................35
     Section 4.07.  Corporate Existence..................................................................35
     Section 4.08.  Calculation of Original Issue Discount...............................................36

ARTICLE 5. SUCCESSORS....................................................................................36

     Section 5.01.  When Company May Merge, etc..........................................................36
     Section 5.02.  Successor Corporation Substituted....................................................36


                                        i




                                                                                                       PAGE
                                                                                                      

ARTICLE 6. DEFAULTS AND REMEDIES.........................................................................37

     Section 6.01.  Events of Default....................................................................37
     Section 6.02.  Acceleration.........................................................................39
     Section 6.03.  Other Remedies.......................................................................39
     Section 6.04.  Waiver of Past Defaults..............................................................40
     Section 6.05.  Control by Majority..................................................................40
     Section 6.06.  Limitation on Suits..................................................................40
     Section 6.07.  Rights of Holders to Receive Payment.................................................41
     Section 6.08.  Collection Suit by Trustee...........................................................41
     Section 6.09.  Trustee May File Proofs of Claim.....................................................41
     Section 6.10.  Priorities...........................................................................42
     Section 6.11.  Undertaking for Costs................................................................42

ARTICLE 7. TRUSTEE.......................................................................................43

     Section 7.01.  Duties of Trustee....................................................................43
     Section 7.02.  Rights of Trustee....................................................................44
     Section 7.03.  Individual Rights of Trustee.........................................................45
     Section 7.04.  Trustee's Disclaimer.................................................................45
     Section 7.05.  Notice of Defaults...................................................................45
     Section 7.06.  Reports by Trustee to Holders........................................................45
     Section 7.07.  Compensation and Indemnity...........................................................46
     Section 7.08.  Replacement of Trustee...............................................................46
     Section 7.09.  Successor Trustee by Merger, Etc.....................................................48
     Section 7.10.  Eligibility; Disqualification........................................................48
     Section 7.11.  Preferential Collection of Claims Against Company....................................48

ARTICLE 8. SATISFACTION AND DISCHARGE; DEFEASANCE........................................................48

     Section 8.01.  Satisfaction and Discharge of Indenture..............................................48
     Section 8.02.  Application of Trust Funds; Indemnification..........................................49
     Section 8.03.  Legal Defeasance of Securities of Any Series.........................................50
     Section 8.04.  Covenant Defeasance..................................................................52
     Section 8.05.  Repayment to Company.................................................................53

ARTICLE 9. SUPPLEMENTS, AMENDMENTS AND WAIVERS...........................................................53

     Section 9.01.  Without Consent of Holders...........................................................53
     Section 9.02.  With Consent of Holders..............................................................54
     Section 9.03.  Revocation and Effect of Consents....................................................56
     Section 9.04.  Notation on or Exchange of Securities................................................56
     Section 9.05.  Trustee to Sign Amendments, Etc......................................................56

ARTICLE 10. GUARANTEE....................................................................................56

     Section 10.01. Guarantee............................................................................56
     Section 10.02. Limitation on Liability..............................................................58
     Section 10.03. Execution and Delivery of Guarantee..................................................58
     Section 10.04. Successors and Assigns...............................................................59


                                       ii




                                                                                                       PAGE
                                                                                                      

     Section 10.05. No Waiver............................................................................59
     Section 10.06. Right of Contribution................................................................59
     Section 10.07. No Subrogation.......................................................................59
     Section 10.08. Additional Guarantors; Reinstatement of Guarantees...................................60
     Section 10.09. Modification.........................................................................60
     Section 10.10. Release of Guarantor.................................................................60
     Section 10.11. Merger, Consolidation and Sale of Assets of a Guarantor..............................61

ARTICLE 11. COLLATERAL AND SECURITY......................................................................61

     Section 11.01. Collateral Documents.................................................................61
     Section 11.02. Opinions.............................................................................62
     Section 11.03. Release and Substitution of Collateral; Amendment of Collateral Documents............62
     Section 11.04. Certificates of the Company..........................................................63
     Section 11.05. Authorization of Actions to be Taken by the Trustee Under the Collateral Documents...63
     Section 11.06. Authorization of Receipt of Funds by the Trustee Under the Collateral Documents......64

ARTICLE 12. MISCELLANEOUS................................................................................64

     Section 12.01. Indenture Subject to Trust Indenture Act.............................................64
     Section 12.02. Notices..............................................................................64
     Section 12.03. Communication by Holders with Other Holders..........................................65
     Section 12.04. Certificate and Opinion as to Conditions Precedent...................................65
     Section 12.05. Statements Required in Certificate or Opinion........................................66
     Section 12.06. Rules by Trustee and Agents..........................................................66
     Section 12.07. Legal Holidays.......................................................................66
     Section 12.08. No Recourse Against Others...........................................................66
     Section 12.09. Counterparts.........................................................................67
     Section 12.10. Governing Law........................................................................67
     Section 12.11. Severability.........................................................................67
     Section 12.12. Effect of Headings, Table of Contents, Etc...........................................67
     Section 12.13. Successors and Assigns...............................................................67
     Section 12.14. No Interpretation of Other Agreements................................................67


                                       iii


                             CROSS-REFERENCE TABLE*



TRUST INDENTURE
  ACT SECTION                                                                INDENTURE SECTION
                                                                      
310(a)(1).......................................................................7.09; 7.10
   (a)(2).............................................................................7.10
   (a)(3).............................................................................N.A.
   (a)(4).............................................................................N.A.
   (a)(5).............................................................................7.10
   (b)....................................................................7.03, 7.08; 7.10
   (c)................................................................................N.A.
311(a)................................................................................7.11
   (b)................................................................................7.11
   (c)................................................................................N.A.
312(a)................................................................................2.05
   (b)...............................................................................12.03
   (c)...............................................................................12.03
313(a)................................................................................7.06
   (b)................................................................................7.06
   (c).........................................................................7.06; 12.02
   (d)................................................................................7.06
314(a)................................................................................4.03
   (b)(1)............................................................................11.02
   (c)(1)............................................................................12.04
   (c)(2)............................................................................12.04
   (c)(3).............................................................................N.A.
   (d)........................................................................11.03, 11.04
   (d)(1) ...........................................................................11.03
   (e)...............................................................................12.05
   (f)................................................................................N.A.
315(a)...................................................................7.01(b)(ii); 7.02
   (b)...................................................................7.02; 7.05; 12.02
   (c).......................................................................7.01(a); 7.02
   (d).......................................................................7.01(d); 7.02
   (e)................................................................................6.11
316(a)(last sentence).................................................................2.08
   (a)(1)(A)..........................................................................6.05
   (a)(1)(B)..........................................................................6.04
   (a)(2).............................................................................N.A.
   (b)................................................................................6.07
   (c)..........................................................................2.12; 9.03
317(a)(1).............................................................................6.08
   (a)(2).............................................................................6.09
   (b)................................................................................2.04
318(a)...............................................................................12.01
   (b)................................................................................N.A.
   (c)...............................................................................12.01


- ----------
N.A. means not applicable.

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

                                       iv


               INDENTURE dated as of January 24, 2002 among Owens-Brockway Glass
Container Inc., a Delaware corporation (the "COMPANY"), the Guarantors (as
defined herein) and U.S. Bank National Association, a national banking
association, as Trustee (the "TRUSTEE").

               The Company and the Guarantors have duly authorized the execution
and delivery of this Indenture to provide for the issuance from time to time of
the Company's debentures, notes or other evidences of indebtedness to be issued
in one or more series (the "SECURITIES"), as herein provided, up to such
principal amount as may from time to time be authorized in or pursuant to one or
more resolutions of the Board of Directors or by supplemental indenture.

               Each party agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of each series of the
Securities:

                                   ARTICLE 1.

                          DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

SECTION 1.01.  CERTAIN DEFINITIONS.

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

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

               "AGENT" means any Registrar, Paying Agent, authenticating agent
or co-Registrar.

               "APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Security, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.

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



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

               "BROKER-DEALER" means any broker or dealer registered with the
Commission under the Exchange Act.

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

               "CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.

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

               "CLEARSTREAM" means Clearstream Banking, S.A.

               "COLLATERAL" means all of the property from time to time in which
Liens are purported to be granted to secure the Securities of a series or
Guarantees of such Securities pursuant to the Collateral Documents.

               "COLLATERAL AGENT" shall have the meaning given to it in the
Credit Agreement.

               "COLLATERAL DOCUMENTS" means, collectively, the Intercreditor
Agreement, the Pledge Agreement and the Security Agreement, each as in effect on
January 24, 2002 and as amended, amended and restated, modified, renewed,
replaced or restructured from time to time and the Mortgages each as in effect
on January 24, 2002 and any additional Mortgages created from time to time, and
as amended, amended and restated, modified, renewed or replaced from time to
time.

               "COMMISSION" means the Securities and Exchange Commission.

               "COMPANY" means the party named as such above until a successor
replaces it pursuant to this Indenture and thereafter means the successor.

               "COMPANY ORDER" means a written order signed in the name of the
Company by two Officers, one of whom must be the Company's principal executive
officer, principal financial officer or principal accounting officer.

                                        2


               "CORPORATE TRUST OFFICE" shall mean the corporate trust office of
the Trustee, which shall initially be U.S. Bank National Association, 180 East
Fifth Street, St. Paul, MN 55101, Attn: Corporate Trust Administration and such
office of the Trustee located in the Borough of Manhattan, the City of New York
or such other address as to which the Trustee may give notice to the Company.

               "CREDIT AGREEMENT" means that certain Secured Credit Agreement,
dated as of April 23, 2001, by and among the Borrowers named therein, OI Group
and Owens-Illinois General, Inc., as Borrower's Agent, Deutsche Banc Alex. Brown
and Banc of America Securities, LLC, as Joint Lead Arrangers and Joint Book
Managers, Deutsche Bank AG, London Branch, as UK Administrative Agent, Bankers
Trust Company, as Administrative Agent, and the other Agents and the other
Lenders named therein, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, amended and restated, modified, renewed, refunded,
replaced, substituted or refinanced or otherwise restructured (including but not
limited to, the inclusion of additional borrowers thereunder) from time to time.

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

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

               "DEPOSITARY" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depositary for such series by the Company,
which Depositary shall be a clearing agency registered under the Exchange Act;
and if at any time there is more than one such person, "DEPOSITARY" as used with
respect to the Securities of any series shall mean the Depositary with respect
to the Securities of such series.

               "DOMESTIC SUBSIDIARY" means any Restricted Subsidiary of OI Group
other than a Foreign Subsidiary.

               "EQUITY INTERESTS" means Capital Stock and all warrants, options
or other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).

               "EUROCLEAR" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system.

               "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time.

               "EXCHANGE OFFER" has the meaning set forth in the Registration
Rights Agreement.

                                        3


               "EXCHANGE OFFER REGISTRATION STATEMENT" means, with respect to
any series of Initial Securities, the exchange offer registration statement as
defined in the Registrations Rights Agreement.

               "EXCHANGE SECURITIES" means the Securities issued in exchange for
the Initial Securities of a series in an Exchange Offer pursuant to Section
2.06(f).

               "FAIR MARKET VALUE" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
pressure or compulsion to complete the transaction.

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

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

               "GLOBAL SECURITY" means a Security issued to evidence all or a
part of any series of Securities that is executed by the Company and
authenticated and delivered by the Trustee to a Depositary or pursuant to such
Depositary's instructions, all in accordance with this Indenture and pursuant to
Section 2.01, which shall be registered as to principal and interest in the name
of such Depositary or its nominee.

               "GLOBAL SECURITY LEGEND" means the legend set forth in Section
2.06(g)(ii) which is required to be placed on all Global Securities issued under
this Indenture.

               "GOVERNMENT SECURITIES" means direct obligations of, or
obligations guaranteed by, the United States of America, and the payment for
which the United States pledges its full faith and credit.

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

               "GUARANTORS" means: (1) OI Group; (2) each direct or indirect
Domestic Subsidiary of OI Group (other than the Company) that guarantees the
Credit Agreement as of the date of this Indenture; and (3) each future direct or
indirect Domestic Subsidiary of OI Group that guarantees the Credit Agreement
and executes a Guarantee of any series of Securities in accordance with the
provisions of this Indenture; and their respective successors and assigns.

                                        4


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

               "HOLDER" means a Person in whose name a Security is registered on
the Registrar's books.

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

               "INDENTURE" means this Indenture, as amended or supplemented from
time to time.

               "INDIRECT PARTICIPANT" means a Person who holds a beneficial
interest in a Global Security through a Participant.

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

               "INTERCOMPANY INDEBTEDNESS" means any Indebtedness of OI Group or
any Subsidiary of OI Group which, in the case of OI Group, is owing to OI Inc.
or any Subsidiary of OI Group and, in the case of any Subsidiary of OI Group, is
owing to OI Group or any other Subsidiary of OI Group.

                                        5


               "INTERCREDITOR ACKNOWLEDGMENT" means the acknowledgment in the
form attached to the Intercreditor Agreement as executed by the Trustee and
acknowledged by Owens-Illinois General Inc. as Borrowers' Agent and delivered to
the Collateral Agent.

               "INTERCREDITOR AGREEMENT" means the intercreditor agreement,
dated as of April 23, 2001, by and among Bankers Trust Company, as
administrative agent for the lenders party to the Credit Agreement, Bankers
Trust Company, as Collateral Agent and any other parties thereto, as amended,
amended and restated or otherwise modified from time to time.

               "INTEREST" when used with respect to an Original Issue Discount
Security that by its terms bears interest only after maturity, means interest
payable after maturity.

               "ISSUE DATE" means the date on which the Securities of a
particular series were originally issued under the Indenture.

               "LETTER OF TRANSMITTAL" means the letter of transmittal to be
prepared by the Company and sent to all Holders of a series of Securities for
use by such Holders in connection with an Exchange Offer for such Securities.

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

               "LIQUIDATED DAMAGES" means all liquidated damages then owing
pursuant to the Registration Rights Agreement.

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

               "MORTGAGES" means mortgages as defined under the Credit Agreement
securing real property in the United States of America.

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

                                        6


               "NON-U.S. PERSON" means a Person who is not a U.S. Person.

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

               "OFFICER" means the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial
Officer, any Executive or Senior Vice President, any Vice-President, the
Treasurer, the Controller, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.

               "OFFICERS' CERTIFICATE" means a certificate signed by two
Officers, one of whom must be the Chief Executive Officer, the President, the
Chief Financial Officer, the Treasurer or the principal accounting officer of
the Company.

               "OI GROUP" means Owens-Illinois Group, Inc., a Delaware
corporation.

               "OI INC." means Owens-Illinois, Inc., a Delaware corporation.

               "OPINION OF COUNSEL" means a written opinion from legal counsel
who is reasonably acceptable to the Trustee. The counsel may be an employee of
or counsel to the Company or the Trustee.

               "ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which
provides that an amount less than its principal amount is due and payable upon
acceleration after an Event of Default.

               "PARTICIPANT" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively.

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

               "PLEDGE AGREEMENT" means the Pledge Agreement, dated as of April
23, 2001, between OI Group, OI Packaging, and Bankers Trust Company, as
Collateral Agent, as amended, amended and restated or otherwise modified from
time to time.

               "PRINCIPAL" of a Security means the principal amount due on the
Maturity of the Security plus the premium, if any, on the Security.

               "PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.06(g)(i) to be placed on all Securities issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.

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

                                        7


               "REGISTRATION RIGHTS AGREEMENT" means, with respect to a series
of Initial Securities, the registration rights agreement entered into by the
Company with respect to such series of Securities.

               "REGULATION S" means Regulation S promulgated under the
Securities Act.

               "REGULATION S GLOBAL SECURITY" means a Regulation S Temporary
Global Security or Regulation S Permanent Global Security, as appropriate.

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

               "REGULATION S TEMPORARY GLOBAL SECURITY" means a temporary Global
Security bearing the Global Security Legend, the Private Placement Legend and
the Regulation S Temporary Global Security Legend and deposited with or on
behalf of and registered in the name of the Depositary or its nominee, issued in
a denomination equal to the outstanding principal amount of the Securities of a
series initially sold in reliance on Rule 903 of Regulation S.

               "REGULATION S TEMPORARY GLOBAL SECURITY LEGEND" means the legend
set forth in Section 2.06(g)(iii) to be placed on all Regulation S Temporary
Global Securities issued under this Indenture except where otherwise permitted
by the provisions of this Indenture.

               "RESTRICTED DEFINITIVE SECURITY" means a Definitive Security
bearing the Private Placement Legend.

               "RESTRICTED GLOBAL SECURITY" means a Global Security bearing the
Private Placement Legend.

               "RESTRICTED PERIOD" means, with respect to Securities of any
series, the 40-day restricted period as defined in Regulation S.

               "RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.

               "RULE 144" means Rule 144 promulgated under the Securities Act.

               "RULE 144A" means Rule 144A promulgated under the Securities Act.

               "RULE 903" means Rule 903 promulgated under the Securities Act.

               "RULE 904" means Rule 904 promulgated under the Securities Act.

               "SECURITIES" means the securities authenticated and delivered
under this Indenture from time to time.

                                        8


               "SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time.

               "SECURITY AGREEMENT" means the Security Agreement, dated as of
April 23, 2001, entered into by and among OI Group, each of the direct and
indirect subsidiaries of OI Group signatory thereto, each additional grantor
that may become a party thereof, and Bankers Trust Company, as Collateral Agent
as amended, amended and restated, or otherwise modified from time to time.

               "SHELF REGISTRATION STATEMENT" means, with respect to any series
of Initial Securities, the shelf registration statement as defined in the
Registration Rights Agreement.

               "SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary of OI
Group that would be a "significant subsidiary" as defined in Article I, Rule
1-02 of Regulation S-X promulgated pursuant to the Securities Act, as such
Regulation is in effect as of the date of this Indenture.

               "STATED MATURITY" means, with respect to any installment of
interest or Principal on any series of Indebtedness, the date on which such
payment of interest or Principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or Principal prior
to the date originally scheduled for the payment thereof.

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

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

               "TRUSTEE" means the party named as such above until a successor
becomes such pursuant to this Indenture and thereafter means or includes each
party who is then a trustee hereunder, and if at any time there is more than one
such party, "TRUSTEE" as used with respect to the Securities of any series means
the Trustee with respect to Securities of that series. If Trustees with respect
to different series of Securities are trustees under this Indenture, nothing
herein shall constitute the Trustees co-trustees of the same trust, and each
Trustee shall be the trustee of a trust separate and apart from any trust
administered by any other Trustee with respect to a different series of
Securities.

               "TRUST OFFICER" means the Chairman of the Board, the President or
any other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.

                                        9


               "UNRESTRICTED DEFINITIVE SECURITIES" means one or more Definitive
Securities that do not bear and are not required to bear the Private Placement
Legend.

               "UNRESTRICTED GLOBAL SECURITY" means a permanent Global Security
that bears the Global Security Legend and that has the "Schedule of Exchanges of
Interests in the Global Security" attached hereto, and that is deposited with or
on behalf of and registered in the name of the Depositary, representing a series
of Securities that do not and are not required to bear the Private Placement
Legend.

               "UNRESTRICTED SECURITIES" means one or more Unrestricted Global
Securities and/or Unrestricted Definitive Securities, including, without
limitation, the Exchange Securities.

               "UNRESTRICTED SUBSIDIARY" means any Subsidiary of OI Group that
is designated by the Board of Directors as an Unrestricted Subsidiary pursuant
to a Board Resolution, but only to the extent that such Subsidiary: (1) has no
Indebtedness other than Non-Recourse Debt; (2) is not party to any agreement,
contract, arrangement or understanding with OI Group or any Restricted
Subsidiary of OI Group unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to OI Group or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of OI Group; (3) is a Person with respect to which
neither OI Group nor any of its Restricted Subsidiaries has any direct or
indirect obligation (a) to subscribe for additional Equity Interests or (b) to
maintain or preserve such Person's financial condition or to cause such Person
to achieve any specified levels of operating results; (4) has not guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness of
OI Group or any of its Restricted Subsidiaries; and (5) has at least one
director on its Board of Directors that is not a director or executive officer
of OI Group or any of its Restricted Subsidiaries and has at least one executive
officer that is not a director or executive officer of OI Group or any of its
Restricted Subsidiaries. Any designation of a Restricted Subsidiary of OI Group
as an Unrestricted Subsidiary shall be evidenced to the Trustee by filing with
the Trustee a certified copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the preceding conditions.

SECTION 1.02.  OTHER DEFINITIONS.



               TERM                                       DEFINED IN SECTION
                                                             
               "Additional Securities"                           2.01
               "Bankruptcy Law"                                  6.01
               "Custodian"                                       6.01
               "Event of Default"                                6.01
               "Legal Holiday"                                  12.07
               "Obligations"                                    10.01
               "Paying Agent"                                    2.03
               "Payment Default"                                 6.01
               "Place of Payment"                                2.01
               "redemption price"                                3.03
               "Registrar"                                       2.03


                                       10


SECTION 1.03.  INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.

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

               "INDENTURE SECURITIES" means the Securities.

               "INDENTURE HOLDER" means a Holder.

               "INDENTURE TO BE QUALIFIED" means this Indenture.

               "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.

               "OBLIGOR" on the Securities means the Company and any successor
obligor on the Securities.

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

SECTION 1.04.  RULES OF CONSTRUCTION.

               Unless the context otherwise requires:

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

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

                    (iii)  "or" is not exclusive;

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

                    (v)    provisions apply to successive events and
                           transactions.

                                   ARTICLE 2.

                                 THE SECURITIES

SECTION 2.01.  UNLIMITED IN AMOUNT, ISSUABLE IN SERIES, FORM AND DATING.

               The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more series. There shall be established in or pursuant
to a Board Resolution or an Officers' Certificate pursuant to authority granted
under a Board Resolution or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series:

                                       11


          (a)  the title of the Securities of the series (which shall
               distinguish the Securities of the series from all other
               Securities);

          (b)  any limit upon the aggregate principal amount of Securities of
               the series that may be authenticated and delivered under this
               Indenture (except for Securities authenticated and delivered upon
               registration of transfer of, or in exchange for, or in lieu of,
               other Securities of the series pursuant to this Article 2);

          (c)  the price or prices (expressed as a percentage of the aggregate
               Principal amount thereof) at which the Securities of the series
               shall be issued;

          (d)  the date or dates on which the principal of the Securities of the
               series is payable;

          (e)  the rate or rates that may be fixed or variable at which the
               Securities of the series shall bear interest, if any, or the
               manner in which such rate or rates shall be determined, the date
               or dates from which such interest shall accrue, the interest
               payment dates on which such interest shall be payable and the
               record dates for the determination of Holders to whom interest is
               payable;

          (f)  the place or places where the principal of and any interest on
               Securities of the series shall be payable, if other than as
               provided herein;

          (g)  the price or prices at which (if any), the period or periods
               within which (if any) and the terms and conditions upon which (if
               other than as provided herein) Securities of the series may be
               redeemed, in whole or in part, at the option, or as an
               obligation, of the Company;

          (h)  the obligation, if any, of the Company to redeem, purchase or
               repay Securities of the series, in whole or in part, pursuant to
               any sinking fund or analogous provisions or at the option of a
               Holder thereof and the price or prices at which and the period
               and periods within which and the terms and conditions upon which
               Securities of the series shall be redeemed, purchased or repaid
               pursuant to such obligation;

          (i)  if other than denominations of $1,000 and any multiple thereof,
               the denominations in which Securities of the series shall be
               issuable;

          (j)  if other than the principal amount thereof, the portion of the
               principal amount of Securities of the series which shall be
               payable upon declaration of acceleration of the maturity thereof
               pursuant to Section 6.02;

          (k)  any addition to or change in the covenants set forth in Article 4
               that applies to Securities of the series;

          (l)  any Events of Default with respect to the Securities of a
               particular series, if not set forth herein;

          (m)  the Trustee for the series of Securities;

                                       12


          (n)  whether the Securities of the series shall be issued in whole or
               in part in the form of a Global Security or Securities; the terms
               and conditions, if any, upon which such Global Security or
               Securities may be exchanged in whole or in part for other
               individual Securities, and the Depositary for such Global
               Security and Securities;

          (o)  any addition to or change in the provisions set forth in Article
               10 that applies to Securities of that series;

          (p)  any addition to or change in the provisions set forth in Article
               11 that applies to Securities of that series;

          (q)  any other terms of the series (which terms shall not be
               inconsistent with the provisions of this Indenture, but which may
               modify or delete any provision of this Indenture with respect to
               such series; PROVIDED, HOWEVER, that no such term may modify or
               delete any provision hereof if imposed by the TIA; AND PROVIDED,
               FURTHER, that any modification or deletion of the rights, duties
               or immunities of the Trustee hereunder shall have been consented
               to in writing by the Trustee).

               All Securities of any series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such Board Resolution or Officers' Certificate or in any such indenture
supplemental hereto.

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

               The Principal of and any interest on the Securities of a series
shall be payable at the office or agency of the Company designated in the form
of Security for the series (each such place herein called the "PLACE OF
PAYMENT"); PROVIDED, however, that payment of interest may be made at the option
of the Company by check mailed to the address of the Person entitled thereto as
such address shall appear in the register of Securities referred to in Section
2.03.

               GLOBAL AND DEFINITIVE SECURITIES. Securities of a series may be
issued as Global Securities or as Definitive Securities and shall be in such
form from time to time established by or pursuant to a Board Resolution or
Officers' Certificate, or established by one or more indentures supplemental
hereto. Each Global Security shall represent such of the outstanding Securities
of a series as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of such outstanding Securities of that
series from time to time endorsed thereon and that the aggregate principal
amount of outstanding Securities represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Security to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Securities represented
thereby shall be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06.

                                       13


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

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

               Prior to the delivery of a Security to the Trustee for
authentication in any form approved by or pursuant to a Board Resolution or
Officers' Certificate, the Company shall deliver to the Trustee the Board
Resolution or Officers' Certificate by or pursuant to which such form of
Security has been approved, which Board Resolution or Officers' Certificate
shall have attached thereto a true and correct copy of the form of Security that
has been approved by or pursuant thereto.

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

SECTION 2.02.  EXECUTION AND AUTHENTICATION.

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

                                       14


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

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

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

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

SECTION 2.03.  REGISTRAR AND PAYING AGENT.

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

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

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

SECTION 2.04.  PAYING AGENT TO HOLD MONEY IN TRUST.

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

               The Company shall require each Paying Agent other than the
Trustee to agree in writing that such Paying Agent shall hold in trust for the
benefit of the Holders of the particular series for which it is acting, or the
Trustee, all money held by the Paying Agent for the payment of Principal or
interest on the Securities of such series, and that such Paying Agent shall
notify

                                       15


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

SECTION 2.05.  HOLDER LISTS.

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

SECTION 2.06.  TRANSFER AND EXCHANGE.

        (a)    TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. A Global Security may
               not be transferred as a whole except by the Depositary to a
               nominee of the Depositary, by a nominee of the Depositary to the
               Depositary or to another nominee of the Depositary, or by the
               Depositary or any such nominee to a successor Depositary or a
               nominee of such successor Depositary. Global Securities of any
               series will not be exchanged by the Company for Definitive
               Securities unless (i) the Company delivers to the Trustee notice
               from the Depositary that it is unwilling or unable to continue to
               act as Depositary or that it is no longer a clearing agency
               registered under the Exchange Act and, in either case, a
               successor Depositary is not appointed by the Company within 120
               days after the date of such notice from the Depositary; (ii) the
               Company in its sole discretion determines that the Global
               Securities of such series (in whole but not in part) should be
               exchanged for Definitive Securities and delivers a written notice
               to such effect to the Trustee (PROVIDED that in no event shall
               the Regulation S Temporary Global Security be exchanged by the
               Company for Definitive Securities prior to (x) the expiration of
               the Restricted Period and (y) the receipt by the Registrar of any
               certificates required pursuant to Rule 903(b)(3)(ii)(B) under the
               Securities Act; or (iii) an Event of Default shall have occurred
               and be continuing with respect to the Securities and the Trustee
               has received a request from DTC or any Holder to issue Definitive
               Securities. Upon the occurrence of any of the preceding events in
               (i), (ii) or (iii) above, Definitive Securities shall be issued
               in such names as the Depositary shall instruct the Trustee.
               Global Securities also may be exchanged or replaced, in whole or
               in part, as PROVIDED in Sections 2.07 and 2.09. Every Security
               authenticated and delivered in exchange for, or in lieu of, a
               Global

                                       16


               Security or any portion thereof, pursuant to this Section 2.06 or
               Section 2.07 or 2.09, shall be authenticated and delivered in the
               form of, and shall be, a Global Security. A Global Security may
               not be exchanged for another Security other than as PROVIDED in
               this Section 2.06(a), however, beneficial interests in a Global
               Security may be transferred and exchanged as provided in Section
               2.06(b), (c) or (f).

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

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

                    (ii)   ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL
               INTERESTS IN GLOBAL SECURITIES. In connection with all transfers
               and exchanges of beneficial interests in any Global Security that
               is not subject to Section 2.06(b)(i) above, the transferor of
               such beneficial interest must deliver to the Registrar (1) a
               written order from a Participant or an Indirect Participant given
               to the Depositary in accordance with the Applicable Procedures
               directing the Depositary to credit or cause to be credited a
               beneficial interest in another Global Security in an amount equal
               to the beneficial interest to be transferred or exchanged and (2)
               instructions given in accordance with the Applicable Procedures
               containing information regarding the Participant account to be
               credited with such increase. Upon consummation of an Exchange
               Offer for a series of Global Securities in accordance with
               Section 2.06(f), the requirements of this Section 2.06(b)(ii)
               shall be deemed to have been satisfied upon receipt by the
               Registrar of the instructions contained in the Letter of
               Transmittal delivered by the holder of such beneficial interests
               in the Restricted Global Securities. Upon satisfaction of all of
               the requirements for transfer or exchange of beneficial interests
               in Global Securities contained in this Indenture and the
               Securities of a series or otherwise applicable

                                       17


               under the Securities Act, the Trustee shall adjust the Principal
               amount of the relevant Global Security(s) pursuant to Section
               2.06(h).

                    (iii)  TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER
               RESTRICTED GLOBAL SECURITY. A beneficial interest in any
               Restricted Global Security may be transferred to a Person who
               takes delivery thereof in the form of a beneficial interest in
               another Restricted Global Security if the transfer complies with
               the requirements of Section 2.06(b)(ii) above and the Registrar
               receives the following:

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

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

                    (iv)   TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A
               RESTRICTED GLOBAL SECURITY FOR BENEFICIAL INTERESTS IN AN
               UNRESTRICTED GLOBAL SECURITY. A beneficial interest in any
               Restricted Global Security may be exchanged by any holder thereof
               for a beneficial interest in an Unrestricted Global Security or
               transferred to a Person who takes delivery thereof in the form of
               a beneficial interest in an Unrestricted Global Security if the
               exchange or transfer complies with the requirements of Section
               2.06(b)(ii) above and:

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

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

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

                         (D)  the Registrar receives the following:

                              (1)  if the holder of such beneficial interest in
                         a Restricted Global Security proposes to exchange such
                         beneficial

                                       18


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

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

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

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

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

          (c)  TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN GLOBAL
               SECURITIES FOR DEFINITIVE SECURITIES. A beneficial interest in a
               Global Security may not be exchanged for a Definitive Security
               except under the circumstances described in Section 2.06(a). A
               beneficial interest in a Global Security may not be transferred
               to a Person who takes delivery thereof in the form of a
               Definitive Security except under the circumstances described in
               Section 2.06(a).

          (d)  TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES FOR BENEFICIAL
               INTERESTS IN GLOBAL SECURITIES.

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

                         (A)  if the Holder of such Restricted Definitive
                    Security proposes to exchange such Security for a beneficial
                    interest in a Restricted

                                       19


                    Global Security, a certificate from such Holder in the form
                    of Exhibit B hereto, including the certifications in item
                    (2)(a) thereof;

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

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

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

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

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

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

                    (ii) RESTRICTED DEFINITIVE SECURITIES TO BENEFICIAL
               INTERESTS IN UNRESTRICTED GLOBAL SECURITIES. A Holder of a
               Restricted Definitive Security may exchange such Security for a
               beneficial interest in an Unrestricted Global Security or
               transfer such Restricted Definitive Security to a Person who
               takes delivery thereof in the form of a beneficial interest in an
               Unrestricted Global Security only if:

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

                                       20


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

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

                         (D)  the Registrar receives the following:

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

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

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

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

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

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

                                       21


Unrestricted Global Securities in an aggregate Principal amount equal to the
Principal amount of Definitive Securities so transferred.

        (e)    TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES FOR DEFINITIVE
               SECURITIES. Upon request by a Holder of Definitive Securities and
               such Holder's compliance with the provisions of this Section
               2.06(e), the Registrar shall register the transfer or exchange of
               Definitive Securities. Prior to such registration of transfer or
               exchange, the requesting Holder shall present or surrender to the
               Registrar the Definitive Securities duly endorsed or accompanied
               by a written instruction of transfer in form satisfactory to the
               Registrar duly executed by such Holder or by its attorney, duly
               authorized in writing. In addition, the requesting Holder shall
               provide any additional certifications, documents and information,
               as applicable, required pursuant to the following provisions of
               this Section 2.06(e).

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

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

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

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

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

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

                                       22


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

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

                         (D)  the Registrar receives the following:

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

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

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

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

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

                                       23


               Restricted Definitive Securities accepted for exchange in the
               Exchange Offer. Concurrently with the issuance of such
               Securities, the Trustee shall cause the aggregate principal
               amount of the applicable Restricted Global Securities to be
               reduced accordingly, and the Company shall execute and the
               Trustee shall authenticate and deliver to the Persons designated
               by the Holders of Definitive Securities so accepted Definitive
               Securities in the appropriate Principal amount.

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

                    (i)  PRIVATE PLACEMENT LEGEND.

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

        THIS SECURITY AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN
        REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
        ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY, THE
        GUARANTEES ENDORSED HEREON NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
        BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
        OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
        TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO THE REGISTRATION
        REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY AND THE
        GUARANTEES ENDORSED HEREON, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
        SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO
        YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
        DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER
        OF THIS SECURITY AND THE GUARANTEES ENDORSED HEREON (OR ANY PREDECESSOR
        OF THIS SECURITY AND THE GUARANTEES ENDORSED HEREON) (THE "RESALE
        RESTRICTION TERMINATION DATE"), ONLY (A) TO THE COMPANY, OI GROUP OR ANY
        SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
        UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES AND THE
        GUARANTEES ENDORSED THEREON ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
        144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY
        BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
        THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
        INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
        MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
        NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING
        OF REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER
        AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
        ACT,

                                       24


        SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH
        OFFER, SALE OR TRANSFER (1) PURSUANT TO CLAUSE (D) PRIOR TO THE END OF
        THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF
        REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO
        THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN
        OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY
        TO EACH OF THEM, AND (2) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT
        A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS
        COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND
        WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE
        RESTRICTION TERMINATION DATE.

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

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

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

               "THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN
        THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE
        BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
        PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH
        NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO THE INDENTURE, (II) THIS
        GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO
        SECTION 2.06(a)

                                       25


        OF THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE
        TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.10 OF THE INDENTURE AND
        (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
        WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

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

                    (iii)  REGULATION S TEMPORARY GLOBAL SECURITY LEGEND. The
               Regulation S Temporary Global Security shall bear a legend in
               substantially the following form:

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

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

                                       26


               reflect such reduction; and if the beneficial interest is being
               exchanged for or transferred to a Person who will take delivery
               thereof in the form of a beneficial interest in another Global
               Security, such other Global Security shall be increased
               accordingly and an endorsement shall be made on such Global
               Security by the Trustee or by the Depositary at the direction of
               the Trustee to reflect such increase.

        (i)    GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.

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

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

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

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

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

                                       27


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

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

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

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

SECTION 2.07.  REPLACEMENT SECURITIES.

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

               Every replacement Security is an obligation of the Company and
shall be entitled to all the benefit of this Indenture equally and
proportionately with any and all other Securities of the same series.

SECTION 2.08.  OUTSTANDING SECURITIES.

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

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

                                       28


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

               For each series of Original Issue Discount Securities, the
principal amount of such Securities that shall be deemed to be outstanding and
used to determine whether the necessary Holders have given any request, demand,
authorization, direction, notice, consent or waiver shall be the principal
amount of such Securities that could be declared to be due and payable upon
acceleration upon an Event of Default as of the date of such determination. When
requested by the Trustee, the Company shall advise the Trustee of such amount,
showing its computations in reasonable detail.

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

SECTION 2.09.  TEMPORARY SECURITIES.

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

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

 SECTION 2.10.  CANCELLATION.

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

SECTION 2.11.  DEFAULTED INTEREST.

               If the Company fails to make a payment of interest on any series
of Securities, it shall pay such defaulted interest plus (to the extent lawful)
any interest payable on the defaulted interest, in any lawful manner. It may
elect to pay such defaulted interest, plus any such interest payable on it, to
the Persons who are Holders of such Securities on which the interest is due on a
subsequent special record date, which special record date shall be fixed in the
following manner.

                                       29


The Company shall notify the Trustee in writing of the amount of defaulted
interest proposed to be paid on each Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money in the currency or currency unit in which the
Securities of such series are payable, equal to the aggregate amount proposed to
be paid in respect of such defaulted interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such defaulted interest. Thereupon the Company shall fix a
special record date for the payment of such defaulted interest which shall be
not more than 15 days and not less than 10 days prior to the date of the
proposed payment. The Company shall cause notice of the proposed payment of such
defaulted interest and the special record date therefor to be mailed,
first-class postage prepaid, to each Holder of Securities of such series at the
address as it appears in the register of Securities referred to in Section 2.03,
not less than 10 days prior to such special record date. Notice of the proposed
payment of such defaulted interest and the special record date therefor having
been so mailed, defaulted interest shall be paid to the Persons in whose names
the Securities of such series are registered at the close of business on such
special record date.

SECTION 2.12.  SPECIAL RECORD DATES.

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

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

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

SECTION 2.13.  CUSIP AND ISIN NUMBERS.

               The Company in issuing any series of Securities may use "CUSIP"
or "ISIN" numbers or both numbers, and, if so used, the Trustee shall use such
"CUSIP" or "ISIN"

                                       30


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

                                   ARTICLE 3.

                                   REDEMPTION

SECTION 3.01.  NOTICES TO TRUSTEE.

               If the Company elects to redeem Securities of any series pursuant
to any optional redemption or change of control provisions thereof, it shall
notify the Trustee of the redemption date and the principal amount of Securities
of that series to be redeemed.

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

               If the Company elects to reduce the principal amount of
Securities of any series to be redeemed pursuant to mandatory redemption
provisions thereof, it shall notify the Trustee of the amount of, and the basis
for, any such reduction. If the Company elects to credit against any such
mandatory redemption Securities it has not previously delivered to the Trustee
for cancellation, it shall deliver such Securities with such notice.

SECTION 3.02.  SELECTION OF SECURITIES TO BE REDEEMED.

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

               (1)  if the Securities are listed, in compliance with the
                    requirements of the principal national securities exchange
                    on which the Securities are listed; or

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

               Except as otherwise provided as to any particular series of
Securities, Securities and portions thereof that the Trustee selects shall be in
amounts of more than $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company promptly in writing of the
Securities or portions of Securities to be called for redemption.

                                       31


SECTION 3.03.  NOTICE OF REDEMPTION.

               Except as otherwise provided as to any particular series of
Securities, at least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption to each Holder whose Securities
are to be redeemed at the address of such Holder as it appears in the Register
of Securities referred to in Section 2.03. Notices of redemption shall not be
conditional.

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

               The notice shall identify the Securities of the series to be
redeemed and shall state:

        (1)    the redemption date;

        (2)    the redemption price fixed in accordance with the terms of the
               Securities of the series to be redeemed, plus accrued interest,
               if any, to the date fixed for redemption (the "REDEMPTION
               PRICE");

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

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

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

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

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

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

SECTION 3.04.  EFFECT OF NOTICE OF REDEMPTION.

               Once notice of redemption is mailed in accordance with Section
3.03, Securities called for redemption become due on the date fixed for
redemption. Upon surrender to the

                                       32


Paying Agent, such Securities shall be paid at the redemption price. On and
after the redemption date, interest ceases to accrue on the Securities or
portions of them called for redemption.

SECTION 3.05.  DEPOSIT OF REDEMPTION PRICE.

               On or before 10:00 a.m. New York City time on the redemption
date, the Company shall deposit with the Paying Agent (or, if the Company or any
Affiliate is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of all Securities called for redemption
on that date other than Securities that have previously been delivered by the
Company to the Trustee for cancellation. The Paying Agent shall return to the
Company any money not required for that purpose.

SECTION 3.06.  SECURITIES REDEEMED IN PART.

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

                                   ARTICLE 4.

                                   COVENANTS

SECTION 4.01.  PAYMENT OF SECURITIES.

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

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

SECTION 4.02.  MAINTENANCE OF OFFICE OR AGENCY.

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

                                       33


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

SECTION 4.03.  COMMISSION REPORTS.

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

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

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

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

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

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

                                       34


SECTION 4.04.  COMPLIANCE CERTIFICATE.

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

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

SECTION 4.05.  TAXES.

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

SECTION 4.06.  STAY, EXTENSION AND USURY LAWS.

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

SECTION 4.07.  CORPORATE EXISTENCE.

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

                                       35


SECTION 4.08.  CALCULATION OF ORIGINAL ISSUE DISCOUNT.

               If, as of the end of any fiscal year of the Company, the Company
has any outstanding Original Issue Discount Securities under this Indenture, the
Company shall file with the Trustee promptly following the end of such fiscal
year (i) a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on such Original Issue
Discount Securities as of the end of such year and (ii) such other specific
information relating to such original issue discount as may then be required
under the Internal Revenue Code of 1986, as amended from time to time.

                                   ARTICLE 5.

                                   SUCCESSORS

SECTION 5.01.  WHEN COMPANY MAY MERGE, ETC.

               The Company shall not consolidate or merge with or into (whether
or not the Company is the surviving corporation), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its properties
or assets in one or more related transactions to any Person unless:

        (1)    the Company is the surviving corporation or the Person formed by
               or surviving any such consolidation or merger (if other than the
               Company) or to which such sale, assignment, transfer, lease,
               conveyance or other disposition shall have been made is a
               corporation organized and existing under the laws of the United
               States, any state thereof or the District of Columbia;

        (2)    the Person formed by or assuming any such consolidation or merger
               (if other than the Company) or the Person to which such sale,
               assignment, transfer, lease, conveyance or other disposition
               shall have been made assumes by supplemental indenture all the
               obligations of the Company under the Securities and this
               Indenture; and

        (3)    immediately prior to and after giving effect to the transaction
               no Default or Event of Default shall have occurred and be
               continuing.

The Company shall deliver to the Trustee on or prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.

SECTION 5.02.  SUCCESSOR CORPORATION SUBSTITUTED.

               Upon any consolidation or merger, or any transfer by the Company
(other than by lease) of all or substantially all of the assets of the Company
in accordance with Section 5.01 hereof, the successor corporation formed by such
consolidation or into which the Company is merged or to which such transfer is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor corporation had been named as the Company herein. In the event of any
such

                                       36


transfer, the predecessor Company shall be released and discharged from all
liabilities and obligations in respect of the Securities and the Indenture, and
the predecessor Company may be dissolved, wound up or liquidated at any time
thereafter.

                                   ARTICLE 6.

                              DEFAULTS AND REMEDIES

SECTION 6.01.  EVENTS OF DEFAULT.

               An "EVENT OF DEFAULT" occurs with respect to Securities of any
particular series if, unless in the establishing Board Resolution, Officers'
Certificate or supplemental indenture hereto, it is provided that such series
shall not have the benefit of said Event of Default:

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

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

        (3)    failure by OI Group or any of its Restricted Subsidiaries for 60
               days after notice to comply with any of the other agreements in
               this Indenture, any series of Securities, the Guarantees of any
               Securities of that series (with respect to any Guarantor) and the
               Collateral Documents (with respect to any Restricted Subsidiary
               which has pledged assets or property to secure its obligations
               under this Indenture and any series of Securities);

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

               (a)  is caused by a failure to pay principal of, or interest on
                    such Indebtedness prior to the expiration of the grace
                    period provided in such Indebtedness on the date of such
                    default (a "PAYMENT DEFAULT"); or

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

               and, in any individual case, the principal amount of any such
               Indebtedness is equal to or in excess of $50.0 million, or such
               Indebtedness together with the principal amount of any other such
               Indebtedness under which there has been a

                                       37


               Payment Default or the maturity of which has been so accelerated,
               aggregates $100.0 million or more;

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

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

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

               (a)  commences a voluntary case;

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

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

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

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

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

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

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

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

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

        (9)    except as permitted by the Collateral Documents, any amendments
               thereto and the provisions of this Indenture, any of the
               Collateral Documents ceases to be in full force and effect or
               ceases to be effective, in all material respects, to create the
               Lien

                                       38


               purported to be created in the Collateral in favor of the holders
               of any Securities of that series for 60 days after notice; and

        (10)   any other Event of Default provided with respect to Securities of
               that series which is specified in a Board Resolution, Officers'
               Certificate or supplemental indenture establishing that series of
               Securities;

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

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

SECTION 6.02.  ACCELERATION.

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

SECTION 6.03.  OTHER REMEDIES.

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

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

                                       39


SECTION 6.04.  WAIVER OF PAST DEFAULTS.

               Subject to Section 9.02, the Holders of a majority in principal
amount of the then outstanding Securities of any series, by notice to the
Trustee, may waive an existing Default or Event of Default with respect to that
series and its consequences under this Indenture except a continuing Default or
Event of Default in the payment of interest or Liquidated Damages on, or the
Principal of any Security of that series (PROVIDED, HOWEVER, that the Holders of
a majority in principal amount of the outstanding Securities of any series may
rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration).

SECTION 6.05.  CONTROL BY MAJORITY.

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

SECTION 6.06.  LIMITATION ON SUITS.

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

        (a)    the Holder gives to the Trustee written notice of a continuing
               Event of Default with respect to that series;

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

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

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

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

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

                                       40


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

SECTION 6.07.  RIGHTS OF HOLDERS TO RECEIVE PAYMENT.

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

SECTION 6.08.  COLLECTION SUIT BY TRUSTEE.

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

SECTION 6.09.  TRUSTEE MAY FILE PROOFS OF CLAIM.

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

                                       41


SECTION 6.10.  PRIORITIES.

               If the Trustee collects any money with respect to Securities of
any series pursuant to this Article (including without limitation any amounts
received in accordance with the terms of the Intercreditor Agreement), it shall
pay out the money in the following order:

               First:    to the Trustee, its agents and attorneys for amounts
                         due under Section 7.07, including payment of all
                         compensation, expense and liabilities incurred, and all
                         advances made, by the Trustee and the costs and
                         expenses of collection;

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

               Third:    to the Company or to such party as a court of competent
                         jurisdiction shall direct; PROVIDED, however, that in
                         the case of amounts received from the distribution of
                         payments pursuant to the Intercreditor Agreement or any
                         other proceeds of Collateral securing any series of
                         Securities, such amounts shall not be distributed to
                         the Company but shall rather be held by the Trustee, in
                         trust, for subsequent application in accordance with
                         the Securities of such series and this Indenture to the
                         payment of Principal of and interest on the Securities
                         upon the earlier to occur of (i) any scheduled or
                         mandatory payment of Principal, optional redemption or
                         payment of accrued interest on the Securities of such
                         series, in any such case as directed in writing by the
                         Company, and (ii) the acceleration of the maturity of
                         the Securities of that series pursuant to Section 6.02
                         (including an acceleration by reason of an Event of
                         Default specified in Section 6.01 (7) or (8)). Until so
                         applied, such payments shall be held in a separate
                         account, in trust, by the Trustee or invested by the
                         Trustee at the written direction of the Company. At
                         such time as no Securities of any series remain
                         outstanding, any excess money held by the Trustee shall
                         be paid to the Company.

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

SECTION 6.11.  UNDERTAKING FOR COSTS.

               In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good

                                       42


faith of the claims or defense made by the party litigant. This Section does not
apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a
suit by Holders of more than 10% in principal amount of the then outstanding
Securities of any series.

                                   ARTICLE 7.

                                     TRUSTEE

SECTION 7.01.  DUTIES OF TRUSTEE.

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

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

               (i)   the duties of the Trustee shall be determined solely by the
                     express provisions of this Indenture or the TIA and the
                     Trustee need perform only those duties that are
                     specifically set forth in this Indenture or the TIA and no
                     others, and no implied covenants or obligations shall be
                     read into this Indenture against the Trustee; and

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

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

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

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

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

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

                                       43


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

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

SECTION 7.02.  RIGHTS OF TRUSTEE.

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

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

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

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

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

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

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

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

                                       44


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

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

SECTION 7.03.  INDIVIDUAL RIGHTS OF TRUSTEE.

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

SECTION 7.04.  TRUSTEE'S DISCLAIMER.

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

SECTION 7.05.  NOTICE OF DEFAULTS.

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

SECTION 7.06.  REPORTS BY TRUSTEE TO HOLDERS.

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

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

                                       45


SECTION 7.07.  COMPENSATION AND INDEMNITY.

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

               The Company shall indemnify each of the Trustee or any
predecessor Trustee for any loss, liability, damage, claims or expenses,
including taxes (other than taxes based upon, measured by or determined by the
income of the Trustee) incurred by it, without negligence or bad faith on its
part, in connection with the administration of this Indenture and its duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent.

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

               If the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(4) or (5) occurs, the expenses and the
compensation for the services shall be intended to constitute expenses of
administration under any applicable Bankruptcy Law.

               This Section 7.07 shall survive the termination of this
Indenture.

SECTION 7.08.  REPLACEMENT OF TRUSTEE.

               A resignation or removal of the Trustee with respect to one or
more or all series of Securities and appointment of a successor Trustee shall
become effective only upon the successor Trustee's acceptance of appointment as
provided in this Section.

               The Trustee may resign with respect to one or more or all series
of Securities by 30 days notice to the Company in writing. The Holders of a
majority in principal amount of the then outstanding Securities of any series
may remove the Trustee as to that series by so notifying the Trustee in writing
and may appoint a successor Trustee with the Company's consent. The Company may
remove the Trustee with respect to one or more or all series of Securities if:

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

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

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

                                       46


               (4)  the Trustee becomes incapable of acting.

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

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

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

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

               In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and that (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
shall contain such provisions as shall be necessary or desirable to confirm that
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and (3) shall
add to or change any of the provisions of this Indenture as shall be necessary
or desirable to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee; PROVIDED, HOWEVER, that nothing herein or in
such supplemental Indenture shall constitute such Trustee co-trustees of the
same trust and that each such Trustee shall be trustee of a trust hereunder
separate and apart from any trust hereunder administered by any other such
Trustee.

               Upon the execution and delivery of such supplemental Indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each

                                       47


such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates.

SECTION 7.09.  SUCCESSOR TRUSTEE BY MERGER, ETC.

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

SECTION 7.10.  ELIGIBILITY; DISQUALIFICATION.

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

SECTION 7.11.  PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

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

                                   ARTICLE 8.

                     SATISFACTION AND DISCHARGE; DEFEASANCE

SECTION 8.01.  SATISFACTION AND DISCHARGE OF INDENTURE.

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

        (a)    either:

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

               (ii) all Securities of that series that have not been delivered
                    to the Trustee for cancellation have become due and payable
                    by reason of the making of a

                                       48


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

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

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

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

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

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

SECTION 8.02.  APPLICATION OF TRUST FUNDS; INDEMNIFICATION.

               (a)  Subject to the provisions of Section 8.05, all money
deposited with the Trustee pursuant to Section 8.01, all money and Government
Securities deposited with the Trustee pursuant to Section 8.03 or 8.04 and all
money received by the Trustee in respect of Government Securities deposited with
the Trustee pursuant to Section 8.03 or 8.04, shall be held in trust and applied
by it, in accordance with the provisions of the Securities and this Indenture,
to the payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
persons entitled thereto, of the Principal and interest for whose payment such
money has been deposited with or received by the Trustee or to make mandatory
sinking fund payments or analogous payments as contemplated by Sections 8.03 and
8.04.

                                       49


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

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

SECTION 8.03.  LEGAL DEFEASANCE OF SECURITIES OF ANY SERIES.

               Unless this Section 8.03 is otherwise specified to be
inapplicable to Securities of any series, the Company shall be deemed to have
paid and discharged the entire indebtedness on all the outstanding Securities of
any such series on the 91st day after the date of the deposit referred to in
subparagraph (d) hereof, the provisions of this Indenture, as it relates to such
outstanding Securities of such series, shall no longer be in effect and any
Guarantees of such Securities shall terminate (and the Trustee, at the expense
of the Company, shall, upon Company Order, execute proper instruments
acknowledging the same), except as to:

        (a)    the rights of Holders of outstanding Securities of such series to
               receive, from the trust funds described in subparagraph (l) of
               the proviso hereto, (i) payment of the Principal of or interest
               and Liquidated Damages, if any, on the outstanding Securities of
               such series at Maturity thereof and (ii) the benefit of any
               mandatory sinking fund payments applicable to the Securities of
               such series on the day on which such payments are due and payable
               in accordance with the terms of this Indenture and the Securities
               of such series;

        (b)    the Company's obligations with respect to such Securities of such
               series under Sections 2.03, 2.06, 2.07 and 2.09;

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

        (d)    the provisions of this Section 8.03;

        PROVIDED that, the following conditions shall have been satisfied:

        (1)    the Company shall have deposited or caused to be deposited
               irrevocably with the Trustee as trust funds in trust for the
               benefit of the Holders of the Securities of such series, cash in
               U.S. Dollars, non-callable Government Securities or a combination
               thereof in such amounts as will be sufficient, in the opinion of
               a

                                       50


               nationally recognized firm of independent public accountants
               expressed in a written certification thereof delivered to the
               Trustee, to pay and discharge the Principal (including mandatory
               sinking fund or analogous payments) of and interest and
               Liquidated Damages, if any, on all outstanding Securities of such
               series on the Stated Maturity or on the applicable redemption
               date, as the case may be, and the Company must specify whether
               the Securities are being defeased to Stated Maturity or to a
               particular redemption date;

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

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

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

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

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

                                       51


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

SECTION 8.04.  COVENANT DEFEASANCE.

               Unless this Section 8.04 is otherwise inapplicable to Securities
of any series, on and after the 91st day after the date of the deposit referred
to in subparagraph (a) hereof, the Company may omit to comply with any term,
provision or condition set forth under Sections 4.03, 4.04, 4.05, 4.06, 4.07 and
4.08 and 5.01 as well as any additional covenants contained in a supplemental
indenture hereto for a particular series of Securities or a Board Resolution or
an Officers' Certificate delivered pursuant to Section 2.01 (and the failure to
comply with any such provisions shall not constitute a Default or Event of
Default under Section 6.01), with respect to the Securities of such series,
PROVIDED that the following conditions shall have been satisfied:

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

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

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

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

                                       52


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

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

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

SECTION 8.05.  REPAYMENT TO COMPANY.

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

                                   ARTICLE 9.

                       SUPPLEMENTS, AMENDMENTS AND WAIVERS

SECTION 9.01.  WITHOUT CONSENT OF HOLDERS.

               The Company, the Guarantors and the Trustee as to any series of
Securities may supplement or amend this Indenture, the Securities or, the
Guarantees of the Securities of a series or the Collateral Documents without
notice to or the consent of any Holder:

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

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

        (3)    to comply with Article 5;

        (4)    to provide for the assumption of the Company's obligations to the
               Holders of Securities of a series by OI Inc.;

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

                                       53


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

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

        (8)    to add to, change or eliminate any of the provisions of this
               Indenture in respect of one or more series of Securities,
               PROVIDED, HOWEVER, that any such addition, change or elimination
               (A) shall neither (i) apply to any Security of any series created
               prior to the execution of such supplemental indenture and
               entitled to the benefit of such provision nor (ii) modify the
               rights of the Holder of any such Security with respect to such
               provision or (B) shall become effective only when there is no
               outstanding Security of any series created prior to the execution
               of such supplemental indenture and entitled to the benefit of
               such provision; or

        (9)    to establish additional series of Securities as permitted by
               Section 2.01.

SECTION 9.02.  WITH CONSENT OF HOLDERS.

               Subject to Section 6.07, the Company, the Guarantors and the
Trustee as to any series of Securities may amend or supplement this Indenture,
the Securities of that series or the Guarantees of the Securities with the
consent of the Holders of a majority in principal amount of the then outstanding
Securities (including, without limitation, consents obtained in connection with
a purchase of, or tender offer or exchange offer for, Securities of a series) of
each series affected by the amendment or supplement, with each such series
voting as a separate class and the Holders of a majority in principal amount of
the then outstanding Securities of any series may also waive any existing
Default or compliance with any provision of this Indenture, the Securities of a
series or the Guarantees of such securities (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Securities of a series); PROVIDED, HOWEVER, that without the consent
of each Holder affected, an amendment or waiver may not:

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

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

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

        (4)    waive a Default or Event of Default in the payment of Principal
               of, or interest or Liquidated Damages, if any, on any Security
               (except a rescission of acceleration of such Security by the
               Holders of at least a majority in aggregate principal

                                       54


               amount of that series of Securities and a waiver of the payment
               default that resulted from such acceleration);

        (5)    make any Security payable in money other than that stated in the
               Security (including defaulted interest);

        (6)    make any change in the provisions of this Indenture relating to
               waivers of past Defaults or the rights of Holders of Securities
               to receive payments of Principal of or interest or Liquidated
               Damages, if any, on such Securities;

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

        (8)    impair the right to institute suit for the enforcement of any
               payment on or with respect to the Securities, the Guarantees of
               such Securities or the Collateral Documents;

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

        (10)   amend or modify any of the provisions of the Collateral Documents
               except (a) in accordance with the terms of such documents or (b)
               as permitted by Section 9.01;

        (11)   make any change to this Section 9.02; or

        (12)   reduce the principal amount of Original Issue Discount Securities
               payable upon acceleration of the maturity thereof;

               An amendment or waiver under this Section 9.02 that waives,
changes or eliminates any covenant or other provision of this Indenture that has
expressly been included solely for the benefit of one or more particular series
of Securities, or that modifies the rights of the Holders of Securities of such
series with respect to such covenant or other provision, shall be deemed not to
affect the rights under this Indenture of the Holders of Securities of any other
series.

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

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

                                       55


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

SECTION 9.03.  REVOCATION AND EFFECT OF CONSENTS.

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

SECTION 9.04.  NOTATION ON OR EXCHANGE OF SECURITIES.

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

SECTION 9.05.  TRUSTEE TO SIGN AMENDMENTS, ETC.

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

                                   ARTICLE 10.

                                    GUARANTEE

SECTION 10.01. GUARANTEE.

               Subject to the provisions of this Article 10, the Guarantors
hereby, jointly and severally, unconditionally and irrevocably, guarantee to
each Holder and to the Trustee and its successors and assigns (a) the due and
punctual payment of Principal of, interest on and Liquidated Damages, if any,
with respect to the Securities of any series to which this Article 10 is
applicable when due, whether at Stated Maturity, by acceleration, by redemption
or otherwise, and all other monetary obligations of the Company under this
Indenture (including obligations to the Trustee) with respect to such Securities
and (b) the due and punctual performance within applicable grace periods of all
other obligations of the Company under this Indenture with

                                       56


respect to such Securities (all the foregoing being hereinafter collectively
called the "OBLIGATIONS"). The Guarantors further agree that the Obligations may
be extended or renewed, in whole or in part, without notice or further assent
from the Guarantors, and that the Guarantors will remain bound under this
Article 10 notwithstanding any extension or renewal of any Obligation.

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

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

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

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

                                       57


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

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

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

SECTION 10.02. LIMITATION ON LIABILITY.

               Any term or provision of this Indenture to the contrary
notwithstanding, the obligations of each Guarantor are limited to the maximum
amount as will result in the Obligations of such Guarantor under the Guarantee
not constituting a fraudulent conveyance or fraudulent transfer under federal or
state law.

SECTION 10.03. EXECUTION AND DELIVERY OF GUARANTEE.

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

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

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

                                       58


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

SECTION 10.04. SUCCESSORS AND ASSIGNS.

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

SECTION 10.05. NO WAIVER.

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

SECTION 10.06. RIGHT OF CONTRIBUTION.

               Each Guarantor hereby agrees that to the extent that a Guarantor
shall have paid more than its proportionate share of any payment made hereunder,
such Guarantor shall be entitled to seek and receive contribution from and
against any other Guarantor hereunder who has not paid its proportionate share
of such payment. Each Guarantor's right of contribution shall be subject to the
terms and conditions of Section 10.07. The provisions of this Section shall in
no respect limit the obligations and liabilities of any Guarantor to the Trustee
and the Holders and each Guarantor shall remain liable to the Trustee and the
Holders for the full amount guaranteed by such Guarantor hereunder.

SECTION 10.07. NO SUBROGATION.

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

                                       59


SECTION 10.08. ADDITIONAL GUARANTORS; REINSTATEMENT OF GUARANTEES.

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

SECTION 10.09. MODIFICATION.

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

SECTION 10.10. RELEASE OF GUARANTOR.

        (a)    A Guarantor shall be automatically released without any action on
               the part of the Trustee of the Holders from its obligations under
               this Indenture and Guarantee if OI Group properly designates any
               Restricted Subsidiary that is a Guarantor as an Unrestricted
               Subsidiary.

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

                                       60


SECTION 10.11. MERGER, CONSOLIDATION AND SALE OF ASSETS OF A GUARANTOR.

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

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

        (2)    the Person acquiring the property in any such sale or disposition
               or the Person formed by or surviving any such consolidation or
               merger is organized or existing under the laws of the United
               States, any state thereof or the District of Columbia and assumes
               all the obligations of that Guarantor under this Indenture, its
               Guarantee, the Collateral Documents and the Registration Rights
               Agreement pursuant to a supplemental indenture satisfactory to
               the Trustee; and

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

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

                                   ARTICLE 11.

                             COLLATERAL AND SECURITY

SECTION 11.01. COLLATERAL DOCUMENTS.

               The due and punctual payment of the Principal of, and interest
and Liquidated Damages, if any, on the Securities of a series and the Guarantees
thereof when and as the same shall be due and payable, whether on an interest
payment date, at maturity, by acceleration, repurchase, redemption or otherwise,
interest on the overdue Principal of and interest (to the extent permitted by
law), if any, on the Securities of such series and the Guarantees thereof and
performance of all other obligations under this Indenture, including, without
limitation, the obligations of the Company set forth in Section 7.07 herein, and
the Securities of such series and the Guarantees thereof, shall be secured as
provided in the Collateral Documents. The Trustee, the Company and each
Guarantor hereby agree that the Collateral Agent shall hold the Collateral in
trust on a PARI PASSU basis with the Indebtedness of the Company under the
Credit Agreement, related documents and liabilities owing to lenders or
affiliates of lenders party to the Credit Agreement and in connection with
interest rate and currency agreements and certain other Indebtedness permitted
by the Credit Agreement, in each case subject and pursuant to the terms of the
Collateral Documents.

               Each Holder, by its acceptance of any Security and the Guarantees
thereof to which this Article is applicable, consents and agrees to the terms of
the Collateral Documents (including, without limitation, the provisions
providing for foreclosure and release of Collateral) as the same may be in
effect or may be amended from time to time in accordance with their

                                       61


terms and authorizes and directs (i) the Collateral Agent, with respect to each
of the Collateral Documents to which it is a party and (ii) the Trustee, with
respect to the Collateral Documents and the Intercreditor Acknowledgment, to
perform their respective obligations and exercise their respective rights
thereunder in accordance therewith.

               The Trustee and each Holder, by accepting the Securities and the
Guarantees thereof, acknowledges that, as more fully set forth in the Collateral
Documents, the Collateral as now or hereafter constituted shall be held on a
PARI PASSU basis for the benefit of all the senior secured creditors under the
Collateral Documents, including, without limitation, the lenders under the
Credit Agreement and that the lien of this Indenture and the Collateral
Documents in respect of the Trustee and the Holders is subject to and qualified
and limited in all respects by the Collateral Documents and actions that may be
taken thereunder.

               As amongst the Holders of any Security and the Guarantees thereof
to which this Article is applicable, the Collateral as now or hereafter
constituted shall be held on a PARI PASSU basis for the benefit of the Holders
without preference, priority or distinction of any thereof over any other by
reason of difference in time of issuance, sale or otherwise, as security for the
Securities and the Guarantees thereof.

SECTION 11.02. OPINIONS.

               Promptly after the qualification of this Indenture under the TIA,
the Company shall deliver the opinion(s) required by Section 314(b)(1) of the
TIA. Subsequent to the execution and delivery of this Indenture, to the extent
required by the TIA, the Company shall furnish to the Trustee on or before each
anniversary of the date of qualification of this Indenture under the TIA, an
Opinion of Counsel, dated as of such date, stating either that (i) in the
opinion of such counsel, all action has been taken with respect to any filing,
re-filing, recording or re-recording with respect to the Collateral as is
necessary to maintain the Lien on the Collateral in favor of the Holders or (ii)
in the opinion of such counsel, that no such action is necessary to maintain
such Lien.

SECTION 11.03. RELEASE AND SUBSTITUTION OF COLLATERAL; AMENDMENT OF COLLATERAL
               DOCUMENTS.

               The parties hereto hereby agree and acknowledge that the
Collateral may be released by the Collateral Agent at any time in accordance
with the provisions of the Collateral Documents and, if applicable, the Credit
Agreement or upon the termination of the Credit Agreement and, in any such case,
the Collateral so released shall automatically be released as Collateral for the
Securities and the Guarantees thereof without any action on the part of the
Trustee or the Holders. When the obligations under the Credit Agreement have
been paid in full, when the collateral under the Collateral Documents no longer
secures the obligations under the Credit Agreement and upon election of the
applicable grantors or pledgors, or when OI Inc. and OI Group achieve the
investment grade ratings specified in the Credit Agreement and the Collateral
Agent acknowledges such ratings, each of the Collateral Documents may be
terminated and the Collateral securing the Securities and the Guarantees
thereunder, released. The Collateral Documents provide that upon release of a
Guarantee under this Indenture, the security interest in the assets of that
Guarantor securing the Securities and the Guarantees of the Securities will be
released simultaneously. Under the indemnification provisions contained in

                                       62


the Intercreditor Agreement, any pro rata payments due to the Collateral Agent
from the Holders of the Securities will be deducted from their portion of the
proceeds from the Collateral prior to the distribution of such proceeds. The
amount of indebtedness secured under the Collateral Documents may be increased
without the consent of the Trustee or the Holders of the Securities.

               For purposes of the TIA, the release of any Collateral from the
terms of the Collateral Documents will not be deemed to impair the security
under this Indenture in contravention of the provisions hereof or affect the
Lien of this Indenture or the Collateral Documents if and to the extent the
Collateral is released pursuant to the terms of the Collateral Documents and, if
applicable, the Credit Agreement or upon the termination of the Credit
Agreement. The Trustee and each Holder of Securities and the Guarantees thereof
to which this Article 11 is applicable acknowledge that a release of Collateral
in accordance with the terms of the Collateral Documents and, if applicable, the
Credit Agreement or upon the termination of the Credit Agreement, as the case
may be, will not be deemed for any purpose to be an impairment of the security
under this Indenture. To the extent applicable, the Company shall cause TIA
Section 314(d) relating to the release of property or securities from the Lien
of the Collateral Documents and relating to the substitution therefor of any
property or securities to be subjected to the Lien of the Collateral Documents
to be complied with.

               The fair value of Collateral released from the Liens of the
Collateral Documents pursuant to the preceding paragraph shall not be considered
in determining whether the aggregate fair value of Collateral released from the
Liens of the Collateral Documents in any calendar year exceeds the 10% threshold
specified in Section 314(d)(l) of the TIA. It is expressly understood that
Section 11.04 and this Section 11.03 relate only to the Company's obligations
under the TIA and shall not restrict or otherwise affect the Company's and its
Subsidiaries' rights or abilities to release Collateral pursuant to the terms of
the Credit Agreement and the Collateral Documents or as otherwise permitted by
the lenders under the Credit Agreement.

SECTION 11.04. CERTIFICATES OF THE COMPANY.

               The Company shall furnish to the Trustee prior to each proposed
release of Collateral all documents required by TIA Section 314(d), if any. The
Trustee may, to the extent permitted by Sections 7.01 and 7.02, accept as
conclusive evidence of compliance with the foregoing provisions the appropriate
statements contained in such documents. Promptly after the receipt of any such
documents, the Trustee shall execute an appropriate instrument evidencing such
release. Any certificate or opinion required by TIA Section 314(d), if
applicable, may be made by an Officer of the Company except in cases where TIA
Section 314(d) requires that such certificate or opinion be made by an
independent engineer, appraiser or other expert within the meaning of TIA
Section 314(d).

SECTION 11.05. AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE UNDER THE
               COLLATERAL DOCUMENTS.

               The Trustee shall be the Representative (as such term is defined
in the Collateral Documents) on behalf of the Holders and shall act upon the
written direction of the Holders with regard to all voting, consent and other
rights granted to the Holders under the Collateral

                                       63


Documents, if any. Subject to the provisions of the Collateral Documents and the
Intercreditor Acknowledgment, the Trustee may, in its sole discretion and
without the consent of the Holders, on behalf of the Holders, take all actions
it deems necessary or appropriate in order to (a) enforce any of its rights or
any of the rights of the Holders under the Collateral Documents and (b) receive
any and all amounts payable from the Collateral in respect of the obligations of
the Company and the Guarantors hereunder. Subject to the provisions of the
Collateral Documents and the Intercreditor Acknowledgment, the Trustee shall
have the power to institute and to maintain such suits and proceedings as it may
deem expedient to prevent any impairment of the Collateral by any acts that may
be unlawful or in violation of the Collateral Documents or this Indenture, and
such suits and proceedings as the Trustee may deem expedient to preserve or
protect its interest and the interests of the Holders in the Collateral
(including power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the security interest hereunder or be prejudicial to the interests of the
Holders or the Trustee).

SECTION 11.06. AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE
               COLLATERAL DOCUMENTS.

               The Trustee is authorized to receive any funds for the benefit of
the Holders distributed under the Collateral Documents, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture and the Collateral Documents.

                                   ARTICLE 12.

                                  MISCELLANEOUS

SECTION 12.01. INDENTURE SUBJECT TO TRUST INDENTURE ACT.

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

SECTION 12.02. NOTICES.

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

               If to the Company:

                    Owens-Brockway Glass Container Inc.
                    One SeaGate
                    Toledo, Ohio  43666
                    Attention:  Treasurer
                    Telephone:  (419) 247-5000
                    Facsimile:  (419) 247-1218

                                       64


               If to the Trustee:

                    U.S. Bank National Association
                    180 East Fifth Street
                    St. Paul, Minnesota  55101
                    Attention:  Corporate Trust Administration
                    Telephone:  (651) 244-8677
                    Facsimile:  (651) 244-0711

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

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

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

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

SECTION 12.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.

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

SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

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

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

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

                                       65


SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

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

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

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

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

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

SECTION 12.06. RULES BY TRUSTEE AND AGENTS.

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

SECTION 12.07. LEGAL HOLIDAYS.

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

SECTION 12.08. NO RECOURSE AGAINST OTHERS.

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

                                       66


SECTION 12.09. COUNTERPARTS.

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

SECTION 12.10. GOVERNING LAW.

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

SECTION 12.11. SEVERABILITY.

               In case any provision in this Indenture or in the 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 12.12. EFFECT OF HEADINGS, TABLE OF CONTENTS, ETC.

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

SECTION 12.13. SUCCESSORS AND ASSIGNS.

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

SECTION 12.14. NO INTERPRETATION OF OTHER AGREEMENTS.

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

                            [SIGNATURE PAGES FOLLOW]

                                       67


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

                                   OWENS-BROCKWAY GLASS CONTAINER INC.

                                   By:       /s/ JAMES W. BAEHREN
                                      ------------------------------------------
                                      Name:  James W. Baehren
                                      Title: Vice President

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

                                   By:       /s/ JAMES W. BAEHREN
                                      ------------------------------------------
                                      Name:  James W. Baehren

                                   U.S. BANK NATIONAL ASSOCIATION, as Trustee

                                   By:       /s/ FRANK P. LESLIE
                                      ------------------------------------------
                                      Name:  Frank P. Leslie
                                      Title: Vice President



                                                                         ANNEX A

                                                   TITLE OF OFFICER EXECUTING ON
                 NAME OF ENTITY                        BEHALF OF SUCH ENTITY

ACI America Holdings Inc.                           Vice President and Secretary

Anamed International, Inc.                          Vice President and Secretary

BriGam Medical, Inc.                                Vice President and Secretary

BriGam Ventures, Inc.                               Vice President and Secretary

BriGam, Inc.                                        Vice President and Secretary

Brockway Realty Corporation                         Vice President and Secretary

Brockway Research, Inc.                             Vice President and Secretary

Continental PET Technologies, Inc.                  Vice President and Secretary

MARC Industries, Inc.                               Vice President and Secretary

Martell Medical Products, Incorporated              Vice President and Secretary

NHW Auburn, LLC                                     Vice President and Secretary
                                                    of its sole member

OB Cal South Inc.                                   Vice President and Secretary

OI AID STS Inc.                                     Vice President and Secretary

OI Auburn Inc.                                      Vice President and Secretary

OI Australia Inc.                                   Vice President and Secretary

OI Brazil Closure Inc.                              Vice President and Secretary

OI California Containers Inc.                       Vice President and Secretary

OI Castalia STS Inc.                                Vice President and Secretary

OI Consol STS Inc.                                  Vice President and Secretary

OI Ecuador STS Inc.                                 Vice President and Secretary

OI Europe & Asia Inc.                               Vice President and Secretary

                                    ANNEX A-1


                                                   TITLE OF OFFICER EXECUTING ON
                 NAME OF ENTITY                        BEHALF OF SUCH ENTITY

OI General Finance Inc.                             Vice President and Secretary

OI General FTS Inc.                                 Vice President and Secretary

O-I Health Care Holding Corp.                       Vice President and Secretary

O-I Holding Company, Inc.                           Vice President and Secretary

OI Hungary Inc.                                     Vice President and Secretary

OI International Holdings Inc.                      Vice President and Secretary

OI Levis Park STS Inc.                              Vice President and Secretary

OI Medical Holdings Inc.                            Vice President and Secretary

OI Medical Inc.                                     Vice President and Secretary

OI Peru STS Inc.                                    Vice President and Secretary

OI Plastic Products FTS Inc.                        Vice President and Secretary

OI Poland Inc.                                      Vice President and Secretary

OI Puerto Rico STS Inc.                             Vice President and Secretary

OI Regioplast STS Inc.                              Vice President and Secretary

OI Venezuela Plastic Products Inc.                  Vice President and Secretary

OIB Produvisa Inc.                                  Vice President and Secretary

Overseas Finance Company                            Vice President and Secretary

Owens-BriGam Medical Company                        Vice President and Secretary
                                                    of each general partner

Owens-Brockway Glass Container                      Vice President and Secretary
Trading Company

Owens-Brockway Packaging, Inc.                      Vice President and Secretary

Owens-Brockway Plastic Products Inc.                Vice President and Secretary

Owens-Illinois Closure Inc.                         Vice President and Secretary

                                    ANNEX A-2


                                                   TITLE OF OFFICER EXECUTING ON
                 NAME OF ENTITY                        BEHALF OF SUCH ENTITY

Owens-Illinois General Inc.                         Vice President and Secretary

Owens-Illinois Group, Inc.                          Vice President, Director of
                                                    Finance and Secretary

Owens-Illinois Prescription Products Inc.           Vice President and Secretary

Owens-Illinois Specialty Products Puerto            Vice President and Secretary
Rico, Inc.

Product Design & Engineering, Inc.                  Vice President and Secretary

Seagate, Inc.                                       Vice President and Secretary

Seagate II, Inc.                                    Vice President and Secretary

Seagate III, Inc.                                   Vice President and Secretary

Specialty Packaging Licensing Company               Vice President and Secretary

Universal Materials, Inc.                           Vice President and Secretary

                                    ANNEX A-3


                                    EXHIBIT A
                         FORM OF CERTIFICATE OF TRANSFER

Owens-Brockway Glass Container Inc.
One SeaGate
Toledo, Ohio 43666

Attention:  Treasurer

                            Re: [Title of Security]

                            (CUSIP/ISIN __________)

               Reference is hereby made to the Indenture, dated as of January
24, 2002 (the "INDENTURE"), by and among Owens-Brockway Glass Container Inc., as
issuer (the "COMPANY"), the Guarantors and U.S. Bank National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

               _______________ (the "TRANSFEROR") owns and proposes to transfer
the Security[ies] or interest in such Security[ies] specified in Annex A hereto,
in the principal amount of $______ in such Security[ies] or interests (the
"TRANSFER"), to __________ (the "TRANSFEREE"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1.   / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN A
144A GLOBAL SECURITY OR A DEFINITIVE SECURITY PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "SECURITIES ACT"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Security is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Security for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and such
Person and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting, the requirements of Rule 144A and
such Transfer is in compliance with any applicable blue sky securities laws of
any state of the United States. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Security will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A Global Security
and/or the Definitive Security and in the Indenture and the Securities Act.

2.   / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN A
REGULATION S GLOBAL SECURITY OR A DEFINITIVE SECURITY PURSUANT TO REGULATION S.
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was

                                       A-1


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

3.   / / CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE GLOBAL SECURITY OR A DEFINITIVE SECURITY PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Securities and
Restricted Definitive Securities and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):

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

                                       or

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

                                       or

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

4.   / / CHECK  IF  TRANSFEREE  WILL  TAKE  DELIVERY  OF A  BENEFICIAL  INTEREST
IN AN UNRESTRICTED GLOBAL SECURITY OR AN UNRESTRICTED DEFINITIVE SECURITY.

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

                                       A-2


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

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

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

                                        ----------------------------------------
                                        [Insert Name of Transferor]

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

Dated:
      ------------------------------

                                       A-3


                       ANNEX A TO CERTIFICATE OF TRANSFER

1.   The Transferor owns and proposes to transfer the following:
                                   [CHECK ONE]
     (a)  / /  a beneficial interest in the:
          (i)      / /   144A Global Security (CUSIP/ISIN ____), or
          (ii)     / /   Regulation S Global Security (CUSIP/ISIN ____), or
     (b)  / /  a Restricted Definitive Security.

2.   After the Transfer the Transferee will hold:
                                   [CHECK ONE]
     (a)  / /  a beneficial interest in the:
          (i)      / /   144A Global Security (CUSIP/ISIN ________), or
          (ii)     / /   Regulation S Global Security (CUSIP/ISIN ________), or
          (iii)    / /   Unrestricted Global Security (CUSIP/ISIN _______), or
     (b)  / /  a Restricted Definitive Security; or
     (c)  / /  an Unrestricted Definitive Security,
     in accordance with the terms of the Indenture.

                                       A-4


                                    EXHIBIT B

                         FORM OF CERTIFICATE OF EXCHANGE

Owens-Brockway Glass Container Inc.
One SeaGate
Toledo, Ohio 43666

Attention:  Treasurer

                             Re: [Title of Security]

                             (CUSIP/ISIN __________)

               Reference is hereby made to the Indenture, dated as of January
24, 2002 (the "INDENTURE"), by and among Owens-Brockway Glass Container Inc., as
issuer (the "COMPANY"), the Guarantors and U.S. Bank National Association, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.

               __________________ (the "OWNER") owns and proposes to exchange
the Security[ies] or interest in such Security[ies] specified herein, in the
principal amount of $__________ in such Security[ies] or interests (the
"EXCHANGE"). In connection with the Exchange,, the Owner hereby certifies that:

1.   EXCHANGE OF RESTRICTED  DEFINITIVE  SECURITIES OR BENEFICIAL  INTERESTS IN
A RESTRICTED GLOBAL SECURITY FOR UNRESTRICTED DEFINITIVE SECURITIES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL SECURITY

               (a)  / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL SECURITY TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL
SECURITY. In connection with the Exchange of the Owner's beneficial interest in
a Restricted Global Security for a beneficial interest in an Unrestricted Global
Security in an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Global Securities and pursuant to and in
accordance with the United States Securities Act of 1933, as amended (the
"SECURITIES ACT"), (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest in an
Unrestricted Global Security is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

               (b)  / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE SECURITY
TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL SECURITY. In connection with
the Owner's Exchange of a Restricted Definitive Security for a beneficial
interest in an Unrestricted Global Security, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Securities and pursuant to and
in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is

                                       B-1


being acquired in compliance with any applicable blue sky securities laws of any
state of the United States.

               (c)  / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE SECURITY
TO UNRESTRICTED DEFINITIVE SECURITY. In connection with the Owner's Exchange of
a Restricted Definitive Security for an Unrestricted Definitive Security, the
Owner hereby certifies (i) the Unrestricted Definitive Security is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Securities and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive Security
is being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.

2.   EXCHANGE OF RESTRICTED  DEFINITIVE  SECURITIES FOR RESTRICTED  DEFINITIVE
SECURITIES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL SECURITIES

               (a)  / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE SECURITY
TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL SECURITY. In connection with the
Exchange of the Owner's Restricted Definitive Security for a beneficial interest
in the [CHECK ONE] __144A Global Security, ___ Regulation S Global Security with
an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer and (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Securities and pursuant to and in accordance
with the Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Exchange in accordance with the terms of the Indenture, the beneficial
interest issued will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the relevant Restricted Global Security
and in the Indenture and the Securities Act.

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

                                        ----------------------------------------
                                           [Insert Name of Owner]

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

Dated:
      ------------------------------

                                       B-2


                                    EXHIBIT C

                                FORM OF GUARANTEE

               For value received, the undersigned (including any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of January 24, 2002, as such Indenture may
be supplemented or amended (the "INDENTURE") by and among Owens-Brockway Glass
Container Inc. (the "COMPANY"), the Guarantors listed on the signature pages
thereto and U.S. Bank National Association, as Trustee ("TRUSTEE"), (a) the due
and punctual payment of the Principal of and interest and Liquidated Damages on
the Securities (as defined in the Indenture), whether at Stated Maturity, by
acceleration, redemption or otherwise, the due and punctual payment of interest
on overdue Principal and, to the extent permitted by law, interest, and the due
and punctual performance of all other obligations of the Company to the Holders
or the Trustee all in accordance with the terms of the Indenture and (b) in case
of any extension of time of payment or renewal of any Securities or any of such
other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
Stated Maturity, by acceleration or otherwise. The obligations of the
undersigned to the Holders of such Securities and to the Trustee pursuant to
this Guarantee and the Indenture are expressly set forth in Article 10 of the
Indenture and reference is hereby made to the Indenture for the precise terms of
this Guarantee.

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

                                        ----------------------------------------
                                        [Name of Guarantor]

                                        By:
                                           -------------------------------------
                                           Name:
                                           Title:

                                       C-1

EX-4.2

                                                                     EXHIBIT 4.2

               ---------------------------------------------------

                       OWENS-BROCKWAY GLASS CONTAINER INC.

                                     ISSUER

                                       AND

               THE GUARANTORS SET FORTH IN ANNEX A ATTACHED HERETO

                      ------------------------------------

                          FIRST SUPPLEMENTAL INDENTURE

                          DATED AS OF JANUARY 24, 2002

                      8 7/8% SENIOR SECURED NOTES DUE 2009

                      ------------------------------------

                         U.S. BANK NATIONAL ASSOCIATION

                                     TRUSTEE

               ---------------------------------------------------



               First Supplemental Indenture, dated as of January 24, 2002 (the
"FIRST SUPPLEMENTAL INDENTURE"), to the Indenture, dated as of January 24, 2002
(the "INDENTURE") among Owens-Brockway Glass Container Inc., a Delaware
corporation (the "COMPANY"), the Guarantors (as defined in the Indenture) and
U.S. Bank National Association, a national banking association, as Trustee (the
"TRUSTEE").

                              W I T N E S S E T H

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

               WHEREAS, the Company and the Guarantors desire and have requested
the Trustee join it in the execution and delivery of this First Supplemental
Indenture in order to establish and provide for the issuance by the Company of a
series of Securities designated as its 8 7/8% Senior Secured Notes due 2009 in
an unlimited aggregate principal amount (the "NOTES"), on the terms set forth
herein;

               WHEREAS, the Company now wishes to issue $1,000,000,000 of Notes;

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

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

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

               NOW THEREFORE:

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



                                   ARTICLE 1.

                   SCOPE OF THIS FIRST SUPPLEMENTAL INDENTURE

SECTION 1.01.  CHANGES, ETC. APPLICABLE ONLY TO THE NOTES.

               The changes, modifications and supplements to the Indenture
effected by this First Supplemental Indenture in Sections 2.1 through 2.10
hereof shall only be applicable with respect to, and govern the terms of, the
Notes, which shall not be limited in aggregate principal amount, and shall not
apply to any other Securities which may be issued under the Indenture unless a
supplemental indenture with respect to such other Securities specifically
incorporates such changes, modifications and supplements.

                                   ARTICLE 2.

                           AMENDMENTS TO THE INDENTURE

SECTION 2.01.  AMENDMENTS TO ARTICLE 1.

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

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

                    "ASSET SALE" means: (1) the sale, lease, conveyance or other
     disposition of any assets; PROVIDED that the sale, conveyance or other
     disposition of all or substantially all of the assets of OI Group and its
     Restricted Subsidiaries taken as a whole shall be governed by Article 5 and
     not by Section 4.11; and (2) the issuance of Equity Interests by any of OI
     Group's Restricted Subsidiaries or the sale of Equity Interests in any of
     OI Group's Restricted Subsidiaries. Notwithstanding the preceding, the
     following items shall not be deemed to be Asset Sales: (1) any single
     transaction or series of related transactions that involves assets or
     Equity Interests having a Fair Market Value of less than $10.0 million; (2)
     a transfer of assets between or among OI Group and its Restricted
     Subsidiaries; (3) an issuance of Equity Interests by a Restricted
     Subsidiary of OI Group to OI Group or to another Restricted Subsidiary of
     OI Group; (4) the sale or lease of equipment, inventory, accounts
     receivable or other assets in the ordinary course of business; (5) the
     sale, lease, conveyance or other disposition of any assets securing this
     Indenture or the Credit Agreement in connection with the enforcement of the
     security interests contained therein pursuant to the terms of the
     Intercreditor Agreement; (6) the sale or other disposition of cash or Cash
     Equivalents; (7) a Restricted Payment that is permitted

                                        2


     by Section 4.12; and (8) the exchange of assets held by OI Group or a
     Restricted Subsidiary of OI Group for assets held by any Person or entity
     (including Equity Interests of such Person or entity), provided that (i)
     the assets received by OI Group or such Restricted Subsidiary of OI Group
     in any such exchange shall immediately constitute, be part of, or be used
     in a Permitted Business; and (ii) any such assets received are of a
     comparable Fair Market Value to the assets exchanged as determined in good
     faith by OI Group.

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

                    "CHANGE OF CONTROL" means the occurrence of any of the
     following: (1) OI Inc. or OI Group becomes aware of (by way of a report or
     any other filing pursuant to Section 13(d) of the Exchange Act, proxy,
     vote, written notice or otherwise) the acquisition by any Person or group
     (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange
     Act, or any successor provision), including any group acting for the
     purpose of acquiring, holding or disposing of securities (within the
     meaning of Rule 13d-5(b)(1) under the Exchange Act), other than the
     Principals and their Related Parties, in a single transaction or in a
     related series of transactions, by way of merger, consolidation or other
     business combination or purchase of beneficial ownership (within the
     meaning of Rule 13d-3 under the Exchange Act, or any successor provision)
     of 35% or more of the total voting power of the Voting Stock of OI Inc.; or
     (2) the first day on which a majority of the members of the Board of
     Directors of OI Inc. are not Continuing Directors; or (3) the Company
     consolidates with, or merges with or into, any Person, or any Person
     consolidates with, or merges with or into the Company, in any such event
     pursuant to a transaction in which any of the outstanding Voting Stock of
     the Company or such other Person is converted into or exchanged for cash,
     securities or other property, other than any such transaction where (A) the
     Voting Stock of the Company outstanding immediately prior to such
     transaction is converted into or exchanged for Voting Stock (other than
     Disqualified Stock) of the surviving or transferee Person constituting a
     majority of the

                                        3


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

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

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

                                        4


     obtained), and would not be prohibited, directly or indirectly, by the
     operation of the terms of its charter and all agreements, instruments,
     judgments, decrees, orders, statutes, rules and governmental regulations
     applicable to that Restricted Subsidiary or its stockholders, other than
     agreements, instruments, judgments, decrees, orders, statutes, rules and
     government regulations existing on the Issue Date.

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

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

                    "CREDIT AGREEMENT DOMESTIC BORROWERS" means the Company, OI
     General FTS Inc. and OI Plastic Products FTS Inc., to the extent at the
     time of determination such

                                        5


     entity is a borrower under the Credit Agreement and any other Domestic
     Subsidiary of OI Group that is, at the relevant time, a borrower under the
     Credit Agreement.

                    "CREDIT FACILITIES" means (1) one or more debt facilities
     (including, without limitation, the Credit Agreement) or commercial paper
     facilities, in each case with banks or other lenders providing for
     revolving credit loans, term loans, bankers acceptances, receivables
     financing (including through the sale of receivables to such lenders or to
     special purpose entities formed to borrow from such lenders against such
     receivables) or letters of credit, in each case, as amended, restated,
     modified, renewed, refunded, replaced, refinanced or otherwise restructured
     in whole or in part from time to time (collectively, "BANK FACILITIES");
     and (2) notes, debentures or other financing instruments or any combination
     thereof incurred after the Issue Date ("Non-Bank Refinancing"), including
     any refinancing thereof, to the extent such Non-Bank Refinancing replaces,
     refinances or otherwise restructures Indebtedness under Credit Facilities
     PROVIDED that after giving effect to the issuance and use of proceeds of
     such Non-Bank Refinancing, OI Group and/or its Restricted Subsidiaries
     shall have available borrowings under the Bank Facilities of at least $2.5
     billion.

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

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

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

                    "EXISTING INDEBTEDNESS" means the aggregate principal or
     commitment amount of Indebtedness of OI Group and its Subsidiaries (other
     than Indebtedness under

                                        6


     the Credit Agreement) in existence on the date of this Indenture, until
     such amounts are repaid or terminated.

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

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

                                        7


                    "FIXED CHARGES" means, with respect to any specified Person
     and its Restricted Subsidiaries for any period, the sum, without
     duplication, of: (1) the consolidated interest expense of such Person and
     its Restricted Subsidiaries for such period, whether paid or accrued,
     including, without limitation, amortization of debt issuance costs and
     original issue discount, non-cash interest payments, the interest component
     of any deferred payment obligations, the interest component of all payments
     associated with Capital Lease Obligations, imputed interest with respect to
     attributable debt, commissions, discounts and other fees and charges
     incurred in respect of letter of credit or bankers' acceptance financings,
     and net of the effect of all payments made or received pursuant to Hedging
     Obligations; PLUS (2) the consolidated interest of such Person and its
     Restricted Subsidiaries that was capitalized during such period; PLUS (3)
     interest actually paid by the Company or any such Restricted Subsidiary
     under any Guarantee of Indebtedness or other obligation of any other
     Person; PLUS (4) the product of (a) all dividends, whether paid or accrued
     and whether or not in cash, on any series of Disqualified Stock or
     preferred stock of such Person or any of its Restricted Subsidiaries, other
     than dividends on Equity Interests payable solely in Equity Interests of OI
     Group (other than Disqualified Stock) or to OI Group or a Restricted
     Subsidiary of OI Group, times (b) a fraction, the numerator of which is one
     and the denominator of which is one minus the then current combined
     federal, state and local statutory tax rate of such Person, expressed as a
     decimal, in each case, on a consolidated basis and in accordance with GAAP.

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

                    "INVESTMENT GRADE PERMITTED LIENS" means: (1) Liens arising
     under the Collateral Documents other than Liens securing the OI Inc. Senior
     Notes on the Issue Date; (2) Liens incurred after the Issue Date on the
     assets (including shares of Capital Stock and Indebtedness) of OI Group or
     any Domestic Subsidiary of OI Group; PROVIDED, HOWEVER, that the aggregate
     amount of Indebtedness and other obligations at any time outstanding
     secured by such Liens pursuant to clause (1) above and this clause (2)
     shall not exceed the sum of $5.5 billion plus 50% of Tangible Assets
     acquired by the Company or any Domestic Subsidiary after the Issue Date;
     (3) Liens in favor of OI Group or any Domestic Subsidiary of OI Group; (4)
     Liens on property or shares of capital stock of a Person existing at the
     time such Person is merged with or into or consolidated with OI Group or
     any Domestic Subsidiary of OI Group; PROVIDED that such Liens were not
     incurred in connection with or in contemplation of such merger or
     consolidation and do not extend to any assets other than those of the
     Person merged into or consolidated with OI Group or the Domestic
     Subsidiary; (5) Liens on property or shares of capital stock existing at
     the time of acquisition thereof by OI Group or any Domestic Subsidiary of
     OI Group, PROVIDED that such Liens were not incurred in connection with or
     in contemplation of such acquisition and do not extend to any property
     other than the property so acquired by OI Group or the Domestic Subsidiary;
     (6) Liens (including extensions and renewals thereof) upon real or personal
     (whether tangible or intangible) property acquired after the Issue Date,
     PROVIDED that: (a) such Lien is created solely for the purpose of securing
     Indebtedness

                                        8


     incurred to finance all or any part of the purchase price or cost of
     construction or improvement of property, plant or equipment subject thereto
     and such Lien is created prior to, at the time of or within 12 months after
     the later of the acquisition, the completion of construction or the
     commencement of full operation of such property, plant or equipment or to
     refinance any such Indebtedness previously so secured; (b) the principal
     amount of the Indebtedness secured by such Lien does not exceed 100% of
     such cost; and (c) any such Lien shall not extend to or cover any property
     or assets other than such item of property or assets and any improvements
     on such item; (7) Liens to secure any Capital Lease Obligation or operating
     lease; (8) Liens encumbering customary initial deposits and margin
     deposits; (9) Liens securing Indebtedness under Hedging Obligations; (10)
     Liens arising out of conditional sale, title retention, consignment or
     similar arrangements for the sale of goods entered into by OI Group or any
     of its Domestic Subsidiaries in the ordinary course of business of OI Group
     and its Domestic Subsidiaries; (11) Liens on or sales of receivables and
     customary cash reserves established in connection therewith; (12) Liens
     securing OI Group's or any of its Domestic Subsidiary's obligations in
     respect of bankers' acceptances issued or created to facilitate the
     purchase, shipment or storage of inventory or other goods; and (13) Liens
     for taxes, assessments or governmental charges or claims that are not yet
     delinquent or that are being contested in good faith by appropriate
     proceedings promptly instituted and diligently concluded, PROVIDED that any
     reserve or other appropriate provision as shall be required in conformity
     with GAAP shall have been made therefor.

                    "INVESTMENT GRADE RATINGS" means a debt rating of the Notes
     of BBB- or higher by S&P and Baa3 or higher by Moody's or the equivalent of
     such ratings by S&P or Moody's or in the event S&P or Moody's shall cease
     rating the Notes and the Company shall select any other Rating Agency, the
     equivalent of such ratings by such other Rating Agency.

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

                                        9


                    "KKR" means Kohlberg Kravis Roberts & Co., L.P., a Delaware
     limited membership.

                    "LIQUIDATED DAMAGES" means the payment of liquidated damages
     as set forth in the Registration Rights Agreement.

                    "MOODY'S" means Moody's Investors Service, Inc. or any
     successor rating agency.

                    "NET INCOME" means, with respect to any specified Person,
     the net income (loss) of such Person, determined in accordance with GAAP
     and before any reduction in respect of preferred stock dividends.

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

                    "NOTES" shall have the meaning specified in the second
     recital of the First Supplemental Indenture.

                    "OFFSHORE COLLATERAL DOCUMENTS" means the Offshore Security
     Agreements and the Mortgages securing real property outside of the United
     States of America.

                    "OFFSHORE SECURITY AGREEMENTS" has the meaning assigned to
     such term in the Credit Agreement.

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

                    "OI INC. SENIOR NOTES" means the Indebtedness of OI Inc.
     outstanding as of any date pursuant to its $300.0 million aggregate
     principal amount of 7.85% Senior Notes due 2004, $350.0 million aggregate
     principal amount of 7.15% Senior Notes due

                                       10


     2005, $300.0 million aggregate principal amount of 8.10% Senior Notes due
     2007, $250.0 million aggregate principal amount of 7.35% Senior Notes due
     2008, $250.0 million aggregate principal amount of 7.50% Senior Debentures
     due 2010, and $250.0 million aggregate principal amount of 7.80% Senior
     Debentures due 2018.

                    "PERMITTED BUSINESS" means any business conducted or
     proposed to be conducted (as described in the offering memorandum) by OI
     Group and its Restricted Subsidiaries on the date of this Indenture and
     other businesses reasonably related or ancillary thereto.

                    "PERMITTED INVESTMENTS" means: (1) any Investment in the
     Company, OI Group or in a Restricted Subsidiary of OI Group; (2) any
     Investment in cash or Cash Equivalents and, with respect to Foreign
     Subsidiaries, short term Investments similar to Cash Equivalents
     customarily used in the countries in which such Foreign Subsidiaries are
     located; (3) any Investment by OI Group or any Restricted Subsidiary of OI
     Group in a Person, if as a result of such Investment: (a) such Person
     becomes a Restricted Subsidiary of OI Group; or (b) such Person is merged,
     consolidated or amalgamated with or into, or transfers or conveys
     substantially all of its assets to, or is liquidated into, OI Group or a
     Restricted Subsidiary of OI Group; (4) any Investment made as a result of
     the receipt of non-cash consideration from an Asset Sale that was made
     pursuant to and in compliance with Section 4.11; (5) any acquisition of
     assets solely in exchange for the issuance of Equity Interests (other than
     Disqualified Stock) of OI Inc., the Company or OI Group; (6) Hedging
     Obligations; (7) advances to employees, officers and directors not in
     excess of $2.0 million outstanding at any one time, in the aggregate; (8)
     obligations of employees, officers and directors, not in excess of $2.0
     million outstanding at any one time, in the aggregate, in connection with
     such employees', officers' or directors' acquisition of shares of OI Inc.
     common stock, so long as no cash is actually advanced to such employees,
     officers or directors in connection with the acquisition of any such
     shares; (9) any Investment existing on the Issue Date; and (10) other
     Investments in any Person having an aggregate Fair Market Value (measured
     on the date each such Investment was made and without giving effect to
     subsequent changes in value), when taken together with all other such
     Investments outstanding at any such time, not to exceed $150.0 million.

                    "PERMITTED LIENS" means: (1) Liens arising under the
     Collateral Documents other than Liens securing the OI Inc. Senior Notes on
     the Issue Date; (2) Liens incurred after the Issue Date on the assets
     (including shares of Capital Stock and Indebtedness) of OI Group or any
     Restricted Subsidiary of OI Group; PROVIDED, HOWEVER, that the aggregate
     amount of Indebtedness and other obligations at any time outstanding
     secured by such Liens pursuant to clause (1) above and this clause (2)
     shall not exceed the sum of $5.5 billion plus 50% of Tangible Assets
     acquired by the Company or any Guarantor or that are owned by any
     Restricted Subsidiary that becomes a Guarantor after the Issue Date; (3)
     Liens in favor of OI Group or any Restricted Subsidiary of OI Group; (4)
     Liens on property or shares of capital stock of a Person existing at the
     time such Person is merged with or into or consolidated with OI Group or
     any Restricted Subsidiary of OI Group; PROVIDED that such Liens were not
     incurred in connection with or in contemplation of such merger or
     consolidation and do not extend to any assets other than those of the
     Person merged into or consolidated with OI Group or the Restricted
     Subsidiary; (5) Liens

                                       11


     on property or shares of capital stock existing at the time of acquisition
     thereof by OI Group or any Restricted Subsidiary of OI Group, PROVIDED that
     such Liens were not incurred in connection with or in contemplation of such
     acquisition and do not extend to any property other than the property so
     acquired by OI Group or the Restricted Subsidiary; (6) Liens on property or
     shares of capital stock of any Foreign Subsidiary, including shares of
     capital stock of any Foreign Subsidiary owned by a Domestic Subsidiary, to
     secure Indebtedness of a Foreign Subsidiary permitted to be incurred under
     this Indenture; (7) Liens (including extensions and renewals thereof) upon
     real or personal (whether tangible or intangible) property acquired after
     the Issue Date, PROVIDED that: (a) such Lien is created solely for the
     purpose of securing Indebtedness incurred to finance all or any part of the
     purchase price or cost of construction or improvement of property, plant or
     equipment subject thereto and such Lien is created prior to, at the time of
     or within 12 months after the later of the acquisition, the completion of
     construction or the commencement of full operation of such property, plant
     or equipment or to refinance any such Indebtedness previously so secured;
     (b) the principal amount of the Indebtedness secured by such Lien does not
     exceed 100% of such cost; and (c) any such Lien shall not extend to or
     cover any property or assets other than such item of property or assets and
     any improvements on such item; (8) Liens to secure any Capital Lease
     Obligation or operating lease; (9) Liens encumbering customary initial
     deposits and margin deposits; (10) Liens securing Indebtedness under
     Hedging Obligations; (11) Liens arising out of conditional sale, title
     retention, consignment or similar arrangements for the sale of goods
     entered into by OI Group or any of its Restricted Subsidiaries in the
     ordinary course of business of OI Group and its Restricted Subsidiaries;
     (12) Liens on or sales of receivables and customary cash reserves
     established in connection therewith; (13) Liens securing OI Group's or any
     of its Restricted Subsidiaries' obligations in respect of bankers'
     acceptances issued or created to facilitate the purchase, shipment or
     storage of inventory or other goods; and (14) Liens for taxes, assessments
     or governmental charges or claims that are not yet delinquent or that are
     being contested in good faith by appropriate proceedings promptly
     instituted and diligently concluded, PROVIDED that any reserve or other
     appropriate provision as shall be required in conformity with GAAP shall
     have been made therefor.

                    "PERMITTED OI INC. DEBT OBLIGATIONS" means Obligations with
     respect to the OI Inc. Senior Notes and any refinancings of the $300.0
     million aggregate principal amount of 7.85% Senior Notes due 2004, the
     $350.0 million aggregate principal amount of 7.15% Senior Notes due 2005 of
     OI Inc., the $300.0 million aggregate principal amount of 8.10% Senior
     Notes due 2007, the $250.0 million aggregate principal amount of 7.35%
     Senior Notes due 2008 and the $250.0 million aggregate principal amount of
     7.50% Senior Debentures due 2010, and the Existing IRBs and up to an
     additional $50.0 million of IRB financing.

                    "PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness
     of OI Group or any of its Restricted Subsidiaries issued in exchange for,
     or the net proceeds of which are used to extend, refinance, renew, replace,
     defease or refund such other Indebtedness of OI Group or any of its
     Restricted Subsidiaries (other than Intercompany Indebtedness); PROVIDED
     that: (1) the principal amount (or accreted value, if applicable) of such
     Permitted Refinancing Indebtedness does not exceed the principal or
     commitment amount (or accreted value, if applicable) of the Indebtedness so
     extended, refinanced,

                                       12


     renewed, replaced, defeased or refunded (plus all accrued interest thereon
     and the amount of any premiums necessary to accomplish such refinancing and
     such expenses incurred in connection therewith); (2) such Permitted
     Refinancing Indebtedness has a final maturity date later than the final
     maturity date of, and has a Weighted Average Life to Maturity equal to or
     greater than the Weighted Average Life to Maturity of, the Indebtedness
     being extended, refinanced, renewed, replaced, defeased or refunded; and
     (3) if the Indebtedness being extended, refinanced, renewed, replaced,
     defeased or refunded is subordinated in right of payment to the Notes, such
     Permitted Refinancing Indebtedness has a final maturity date later than the
     final maturity date of, and is subordinated in right of payment to, the
     Notes on terms at least as favorable to the Holders of Notes as those
     contained in the documentation governing the Indebtedness being extended,
     refinanced, renewed, replaced, defeased or refunded.

                    "PRINCIPALS" means KKR and its Affiliates.

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

                    "REGISTRATION RIGHTS AGREEMENT" means the Registration
     Rights Agreement, dated as of January 24, 2002, between the Company, the
     Guarantors named therein and the Initial Purchasers (as defined therein).

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

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

                    "RESTRICTED INVESTMENT" means an Investment other than a
     Permitted Investment.

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

                    "SHELF REGISTRATION STATEMENT" means the shelf registration
     statement as defined in the Registration Rights Agreement.

                                       13


                    "TANGIBLE ASSETS" means the total consolidated assets, LESS
     goodwill and intangibles, of OI Group and its Restricted Subsidiaries, as
     shown on the most recent balance sheet of OI Group.

                    "UNRESTRICTED SUBSIDIARY" means any Subsidiary of OI Group
     that is designated by the Board of Directors as an Unrestricted Subsidiary
     pursuant to a Board Resolution, but only to the extent that such
     Subsidiary: (1) has no Indebtedness other than Non-Recourse Debt; (2) is
     not party to any agreement, contract, arrangement or understanding with OI
     Group or any Restricted Subsidiary of OI Group unless the terms of any such
     agreement, contract, arrangement or understanding are no less favorable to
     OI Group or such Restricted Subsidiary than those that might be obtained at
     the time from Persons who are not Affiliates of OI Group; (3) is a Person
     with respect to which neither OI Group nor any of its Restricted
     Subsidiaries has any direct or indirect obligation (a) to subscribe for
     additional Equity Interests or (b) to maintain or preserve such Person's
     financial condition or to cause such Person to achieve any specified levels
     of operating results; (4) has not guaranteed or otherwise directly or
     indirectly provided credit support for any Indebtedness of OI Group or any
     of its Restricted Subsidiaries; and (5) has at least one director on its
     Board of Directors that is not a director or executive officer of OI Group
     or any of its Restricted Subsidiaries and has at least one executive
     officer that is not a director or executive officer of OI Group or any of
     its Restricted Subsidiaries. Any designation of a Restricted Subsidiary of
     OI Group as an Unrestricted Subsidiary shall be evidenced to the Trustee by
     filing with the Trustee a certified copy of the Board Resolution giving
     effect to such designation and an Officers' Certificate certifying that
     such designation complied with the preceding conditions and was permitted
     by Section 4.12. If, at any time, any Unrestricted Subsidiary would fail to
     meet the preceding requirements as an Unrestricted Subsidiary, it shall
     thereafter cease to be an Unrestricted Subsidiary for purposes of this
     Indenture and any Indebtedness of such Subsidiary shall be deemed to be
     incurred by a Restricted Subsidiary of OI Group as of such date and, if
     such Indebtedness is not permitted to be incurred as of such date under
     Section 4.13, OI Group shall be in default of such covenant.

                    "VOTING STOCK" of any Person as of any date means the
     Capital Stock of such Person that is at the time entitled to vote in the
     election of the Board of Directors of such Person.

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

                    "WHOLLY OWNED RESTRICTED SUBSIDIARY" of any specified Person
     means a Restricted Subsidiary of such Person all of the outstanding Capital
     Stock or other ownership interests of which (other than directors'
     qualifying shares) shall at the time be

                                       14


     owned by such Person and/or by one or more Wholly Owned Restricted
     Subsidiaries of such Person.

SECTION 2.02.  AMENDMENTS TO ARTICLE 2.

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

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

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

     SECTION 2.08   OUTSTANDING SECURITIES.

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

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

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

                    For each series of Original Issue Discount Securities, the
     principal amount of such Securities that shall be deemed to be outstanding
     and used to determine whether the necessary Holders have given any request,
     demand, authorization, direction, notice, consent or waiver shall be the
     principal amount of such Securities that could be declared to be due and
     payable upon acceleration upon an Event of Default as of the date of such
     determination. When requested by the Trustee, the Company shall advise the
     Trustee of such amount, showing its computations in reasonable detail.

                    In determining whether the Holders of the required principal
     amount of Securities of any series have concurred in any direction, waiver
     or consent, Securities owned by the Company, or by any Person directly or
     indirectly controlling or controlled by or under direct or indirect common
     control with the Company, shall be considered as though not outstanding,
     except that for the purposes of determining whether the Trustee shall be
     protected in relying on any such direction, waiver or consent, only
     Securities as

                                       15


     to which a Trust Officer of the Trustee has actual knowledge are so owned
     shall be so disregarded. Securities owned by the Company, or by any Person
     directly or indirectly controlling or controlled by or under direct or
     indirect common control with the Company shall not be deemed to be
     outstanding for purposes of Section 3.07.

SECTION 2.03.  AMENDMENTS TO ARTICLE 3.

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

     SECTION 3.07.  OPTIONAL REDEMPTION.

                    Except as described in this Section 3.07, the Notes shall
     not be redeemable at the Company's option prior to February 15, 2006.

                    (a)  On or after February 15, 2006, the Company may redeem
     all or a part of the Notes upon not less than 30 nor more than 60 days
     notice, at the redemption prices (expressed as percentages of Principal
     amount) set forth below plus accrued and unpaid interest and Liquidated
     Damages, if any, thereon, to the applicable redemption date, if redeemed
     during the twelve-month period beginning on February 15, 2006 of the years
     indicated below:



           YEAR                                        PERCENTAGE
           ----                                        ----------
                                                      
           2006.....................................     104.438%
           2007.....................................     102.219%
           2008 and thereafter......................     100.000%


                    (b) At any time prior to February 15, 2005, the Company may
     redeem on any one or more occasions up to 35% of the aggregate principal
     amount of Notes (calculated after giving effect to any issuance of
     Additional Securities) issued under this Indenture at a redemption price of
     108.875% of the principal amount thereof, plus accrued and unpaid interest
     and Liquidated Damages, if any, to the redemption date, with the net cash
     proceeds of one or more Equity Offerings by OI Inc. to the extent the net
     cash proceeds thereof are contributed to the Company or used to purchase
     from the Company Capital Stock (other than Disqualified Stock) of the
     Company; PROVIDED that:

          (1)       at least 65% of the aggregate principal amount of Notes
                    issued under this Indenture remains outstanding immediately
                    after the occurrence of such redemption (excluding Notes
                    held by OI Inc. and its Subsidiaries); and

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

                    (c)  At any time prior to February 15, 2006, the Notes may
     be redeemed, in whole but not in part, at the option of the Company upon
     the occurrence of a Change of Control, upon not less than 30 nor more than
     60 days prior notice (but in no event more than 90 days after the
     occurrence of such Change of Control or transfer event) mailed by
     first-class mail to each Holder's registered address, at a redemption price
     equal to 100% of

                                       16


     the principal amount of Notes redeemed plus the Applicable Premium as of,
     and accrued and unpaid interest and Liquidated Damages, if any, to, the
     date of redemption (subject to the right of Holders of record on the
     relevant record date to receive interest due on the Notes on the relevant
     Interest Payment Date).

                    "APPLICABLE PREMIUM" means, with respect to any Note on any
     redemption date, the greater of:

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

                    (2)  the excess of:

                         (a)  the present value at such redemption date of (1)
                              the redemption price of such Note at February 15,
                              2006 (such redemption price being set forth in the
                              table above) plus (2) all required interest
                              payments due on such Note through February 15,
                              2006, (including accrued but unpaid interest)
                              computed using a discount rate equal to the
                              Treasury Rate on such redemption date plus 50
                              basis points; over

                         (b)  the principal amount of such Note.

                    "TREASURY RATE" means, as of ANY redemption date, the yield
     to maturity as of such redemption date of United States Treasury securities
     with a constant maturity (as compiled and published in the most recent
     Federal Reserve Statistical Release H.15(519) that has become publicly
     available at least two Business Days prior to the redemption date (or, if
     such statistical release is no longer published, any publicly available
     source of similar market data)) most nearly equal to the period from the
     redemption date to February 15, 2006; PROVIDED, HOWEVER, that if the period
     from the redemption date to February 15, 2006 is less than one year, the
     weekly average yield on actually traded United States Treasury securities
     adjusted to a constant maturity of one year shall be used.

     SECTION 3.08   MANDATORY REDEMPTION.

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

SECTION 2.04.  AMENDMENTS TO ARTICLE 4.

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

     SECTION 4.09.  FALL-AWAY EVENT.

                    If at any time the Notes have achieved the Investment Grade
     Ratings, OI Group and the Restricted Subsidiaries of OI Group shall
     thereafter no longer be subject to the covenants under Sections 4.10, 4.11,
     4.12, 4.13, 4.14, 4.15, 4.16, 4.17 and 4.18

                                       17


     (collectively, the "EXTINGUISHED COVENANTS"), PROVIDED that if upon the
     receipt by the Notes of the Investment Grade Ratings, a Default or Event of
     Default has occurred and is continuing under this Indenture, the Company
     shall continue to be subject to the Extinguished Covenants until such time
     as no Default or Event of Default is continuing.

                    Notwithstanding the foregoing, at the time OI Group and the
     Restricted Subsidiaries are no longer subject to the Extinguished
     Covenants, the following covenant shall apply to OI Group and its Domestic
     Subsidiaries:

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

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

                                       18


     SECTION 4.10   OFFER TO REPURCHASE UPON A CHANGE OF CONTROL.

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

                                       19


     have breached its obligations under the Change of Control provisions of
     this Indenture by virtue of such conflict.

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

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

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

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

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

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

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

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

     SECTION 4.11   ASSET SALES.

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

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

                                       20


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

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

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

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

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

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

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

               (1)  to repay senior Indebtedness of the Company or any Guarantor
                    and, if the senior Indebtedness of the Company or any
                    Guarantor repaid is revolving credit Indebtedness, to
                    correspondingly reduce commitments with respect thereto, if
                    the terms of such revolving credit Indebtedness would
                    require such a commitment reduction; PROVIDED, HOWEVER, that
                    a non-Guarantor Restricted Subsidiary may use the Net
                    Proceeds from an Asset Sale to

                                       21


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

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

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

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

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

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

     Notwithstanding the foregoing, with respect to any Asset Sale by the
     Company or any Guarantor, such Net Proceeds may only be applied pursuant to
     items (1) or (6) above and, to the extent such Net Proceeds are applied to,
     or with respect to, the Company, a Guarantor or a Person or a Restricted
     Subsidiary that becomes a Guarantor, items (3), (4) or (5) above. Pending
     the final application of any such Net Proceeds, OI Group or the applicable
     Restricted Subsidiary may temporarily reduce revolving credit borrowings or
     otherwise invest such Net Proceeds in any manner that is not prohibited by
     this Indenture.

                    Any Net Proceeds from Asset Sales that are not applied or
     invested as provided in the preceding paragraph shall constitute "EXCESS
     PROCEEDS." When the aggregate amount of Excess Proceeds exceeds $25.0
     million, the Company shall make an offer (an "ASSET SALE OFFER") to all
     Holders of Notes and all Holders of other Indebtedness that is PARI PASSU
     with the Notes containing provisions similar to those set forth in this
     Indenture with respect to offers to purchase or redeem with the proceeds of
     sales of assets to purchase the maximum principal amount of Notes and such
     other PARI PASSU Indebtedness that may be purchased out of the Excess
     Proceeds. The offer price in any Asset Sale Offer shall be equal to 100% of
     principal amount plus accrued and unpaid interest and Liquidated Damages,
     if any, to the date of purchase, and shall be payable in cash. If any
     Excess Proceeds remain after consummation of an Asset Sale Offer, the

                                       22


     Company may use such Excess Proceeds for any purpose not otherwise
     prohibited by this Indenture. If the aggregate principal amount of Notes
     and such other PARI PASSU Indebtedness tendered into such Asset Sale Offer
     exceeds the amount of Excess Proceeds, the Trustee shall select the Notes
     and such other PARI PASSU Indebtedness to be purchased on a pro rata basis
     based on the principal amount of Notes and such other PARI PASSU
     Indebtedness tendered. Upon completion of each Asset Sale Offer, the amount
     of Excess Proceeds shall be reset at zero.

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

     SECTION 4.12.  RESTRICTED PAYMENTS.

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

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

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

               (3)  purchase, redeem, defease or otherwise acquire or retire for
                    value any Indebtedness that is subordinated to the Notes or
                    the Guarantees of the Notes, except for (a) payments of or
                    related to Intercompany Indebtedness

                                       23


                    (other than Intercompany Indebtedness owing to OI Inc. by OI
                    Group), (b) a payment of interest or Principal at the Stated
                    Maturity thereof (other than Intercompany Indebtedness owing
                    to OI Inc. by OI Group) or (c) the purchase, repurchase,
                    defeasance, acquisition or retirement for value of
                    Indebtedness of a Foreign Subsidiary by a Foreign
                    Subsidiary; or

               (4)  make any Restricted Investment (all such payments and other
                    actions set forth in clauses (1) through (4) above being
                    collectively referred to as "RESTRICTED PAYMENTS"),

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

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

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

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

                    (a)  50% of the Consolidated Net Income of OI Group for the
                         period (taken as one accounting period) from the
                         beginning of the first fiscal quarter commencing after
                         the date of this Indenture to the end of OI Group's
                         most recently ended fiscal quarter for which internal
                         financial statements are available at the time of such
                         Restricted Payment (or, if such Consolidated Net Income
                         for such period is a deficit, less 100% of such
                         deficit), PLUS

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

                                       24


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

                    (d)  $15.0 million.

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

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

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

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

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

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

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

               (7)  dividends or distributions to OI Inc. or payments of
                    Intercompany Indebtedness to allow OI Inc. to pay cash
                    dividends on any shares of

                                       25


                    preferred stock of OI Inc. outstanding on the date of this
                    Indenture, plus dividends on any subsequently issued shares
                    of preferred stock of OI Inc. in an amount not to exceed
                    $25.0 million in any twelve-month period.

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

     SECTION 4.13.  INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.

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

                    The first paragraph of this Section 4.13 shall not prohibit
     the incurrence of any of the following items of Indebtedness (collectively,
     "PERMITTED DEBT"):

               (1)  the incurrence by OI Group or its Restricted Subsidiaries of
                    Indebtedness under Credit Facilities (and the incurrence of
                    Guarantees thereof) in an aggregate principal amount at any
                    one time outstanding (with letters of credit being deemed to
                    have a principal amount equal to the maximum potential
                    liability of the Company and its Restricted Subsidiaries
                    thereunder) not to exceed $4.5 billion (of which not more
                    than $1.41 billion of such Indebtedness shall be incurred by
                    Restricted Subsidiaries that are not Guarantors);

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

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

                                       26


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

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

               (6)  provided that so long as no Default shall have occurred or
                    be continuing or would be caused thereby, the incurrence by
                    OI Group or any of its Restricted Subsidiaries of
                    Indebtedness, the proceeds of which are or shall be used to
                    refund, refinance or replace the $300.0 million aggregate
                    principal amount of 7.85% Senior Notes due 2004, the $350.0
                    million aggregate principal amount of 7.15% Senior Notes due
                    2005, the $300.0 million aggregate principal amount of 8.10%
                    Senior Notes due 2007, the $250.0 million aggregate
                    principal amount of 7.35% Senior Notes due 2008 and the
                    $250.0 million aggregate principal amount of 7.50% Senior
                    Debentures due 2010, in each case of OI Inc.

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

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

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

                                       27


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

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

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

               (10) provided that so long as no Default shall have occurred or
                    be continuing or would be caused thereby, the incurrence by
                    any Foreign Subsidiary of OI Group of Indebtedness in an
                    aggregate principal amount (or accreted value, as
                    applicable) at any time outstanding, not to exceed $300.0
                    million, in addition to the $1.41 billion of Indebtedness
                    that may be incurred under clause (1) of this paragraph;

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

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

               (13) the incurrence by OI Group or any of its Restricted
                    Subsidiaries of additional Indebtedness in an aggregate
                    principal amount (or accreted value, as applicable) at any
                    time outstanding, including all Permitted Refinancing
                    Indebtedness incurred to refund, refinance or replace any


                                       28


                    Indebtedness incurred pursuant to this clause (13), not to
                    exceed $300.0 million;

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

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

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

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

               (18) the incurrence by OI Group or any of its Restricted
                    Subsidiaries of Acquired Debt, in an aggregate principal
                    amount at any time outstanding, including all Permitted
                    Refinancing Indebtedness incurred to refund, refinance or
                    replace any Indebtedness incurred pursuant to this

                                       29


                    clause (18), not to exceed 5.0% of Tangible Assets, as
                    measured after giving effect to the transaction for which
                    the Acquired Debt was incurred.

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

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

                    For purposes of determining compliance with this Section
     4.13, in the event that any proposed Indebtedness meets the criteria of
     more than one of the categories of Permitted Debt described in clauses (1)
     through (18) above, or is entitled to be incurred pursuant to the first
     paragraph of this Section 4.13, the Company shall be permitted to classify
     such item of Indebtedness on the date of its incurrence in any manner that
     complies with this Section 4.13, or later reclassify all or a portion of
     such item of Indebtedness. Indebtedness under Credit Facilities outstanding
     on the date on which Notes are first issued and authenticated under this
     Indenture shall be deemed to have been incurred on such date in reliance on
     the exception provided by clauses (1) or (2) of the definition of Permitted
     Debt above.

     SECTION 4.14.  LIENS.

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

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

               (2)  Liens existing on the Issue Date;

                                       30


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

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

               (5)  Permitted Liens; and

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

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

     SECTION 4.15.  DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
     SUBSIDIARIES.

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

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

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

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

                                       31


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

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

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

               (3)  applicable law;

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

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

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

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

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

                                       32


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

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

     SECTION 4.16.  TRANSACTIONS WITH AFFILIATES.

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

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

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

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

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

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

               (3)  payment of reasonable directors' fees;

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

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

                                       33


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

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

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

               (9)  in addition to any payments referred to in (6) above,
                    payments or loans to officers, directors and employees of OI
                    Group, any of its direct or indirect parent corporations or
                    any Restricted Subsidiary of OI Group for business or
                    personal purposes and other loans and advances, in
                    accordance with any policy of OI Group which shall have been
                    approved by the Board of Directors of OI Group in good faith
                    from time to time, to such officers, directors and employees
                    for travel, entertainment, moving and other relocation
                    expenses made in the ordinary course of business of OI
                    Group, any of its direct or indirect parent corporations or
                    any Restricted Subsidiary of OI Group;

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

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

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

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

                                       34


     SECTION 4.17.  ADDITIONAL PLEDGES.

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

     SECTION 4.18.  PAYMENTS FOR CONSENT.

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

     SECTION 4.19.  DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.

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

     SECTION 4.20.  FUTURE PLEDGES OF COLLATERAL/NEGATIVE PLEDGES.

                    The Collateral Documents shall provide that, beginning on
     April 1, 2002, the Holders shall, automatically and without any further
     action, become the beneficiary of the pledge to the Collateral Agent
     pursuant to the Pledge Agreement of (1) all the issued and outstanding
     shares of all classes of Capital Stock of OI Health Care Holding Corp., OI
     General Finance Inc., OI Plastic Products FTS Inc. and Owens-Brockway
     Packaging, Inc. ("OI PACKAGING") owned by OI Group and Intercompany
     Indebtedness owed by each of OI Health Care Holding Corp., OI General
     Finance Inc., OI Plastic Products FTS Inc. and OI Packaging to OI Group;
     and (2) all the issued and outstanding shares of all classes

                                       35


     of Capital Stock of the Company owned by OI Packaging and Intercompany
     Indebtedness owed by the Company to OI Packaging (collectively, the "FUTURE
     PLEDGE").

                    In addition, (1) until the date of the Future Pledge, and
     except as contemplated and permitted by the Credit Agreement and the
     Collateral Documents, (a) OI Group shall not permit any of the issued and
     outstanding shares of any class of Capital Stock of OI Health Care Holding
     Corp., OI General Finance Inc., OI Plastic Products FTS Inc. or OI
     Packaging to be pledged; (b) OI Group shall not permit any part of the
     Intercompany Indebtedness owed by any of OI Health Care Holding Corp., OI
     General Finance Inc., OI Plastic Products FTS Inc. or OI Packaging to OI
     Group to be pledged; (c) OI Packaging shall not permit any of the issued
     and outstanding shares of any class of Capital Stock of the Company to be
     pledged; and (d) OI Packaging shall not permit any part of the Intercompany
     Indebtedness owed by the Company to OI Packaging to be pledged, and (2)
     except as contemplated by and permitted by the Credit Agreement and the
     Collateral Documents, OI Group shall not permit any of the issued and
     outstanding shares of any class of Capital Stock of OI General FTS or any
     part of the Intercompany Indebtedness owed by OI General FTS to OI Group to
     be pledged, in each of the foregoing cases as security or otherwise unless
     the Notes and Guarantees of the Notes are secured by this collateral on a
     PARI PASSU basis with the applicable Indebtedness.

     SECTION 4.21.  LIMITATIONS ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS.

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

SECTION 2.05.  AMENDMENTS TO ARTICLE 5.

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

     SECTION 5.01.  WHEN OI GROUP MAY MERGE, ETC.

                    OI Group shall not, in any transaction or series of
     transactions, merge or consolidate with or into, or, directly or
     indirectly, sell, assign, convey, transfer, lease or otherwise dispose of
     all or substantially all of its properties and assets to, any Person or
     Persons, and OI Group shall not permit any of its Restricted Subsidiaries
     to enter into any such transaction or series of transactions if such
     transaction or series of transactions, in the aggregate, would result in a
     sale, assignment, conveyance, transfer, lease or other disposition of all
     or substantially all of the properties and assets of OI Group and its
     Restricted Subsidiaries, on a consolidated basis, to any other Person or
     Persons, unless at the time and after giving effect thereto:

                                       36


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

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

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

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

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

     SECTION 5.02.  SUCCESSOR CORPORATION SUBSTITUTED.

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

                                       37


     SECTION 5.03.  ASSIGNMENT OF OBLIGATIONS.

                    On and after the one-year anniversary of the effectiveness
     of the Exchange Offer Registration Statement or if the Company and the
     Guarantors are not permitted to consummate the Exchange Offer because the
     Exchange Offer is not permitted by applicable law or commission policy, the
     one-year anniversary of the effectiveness of the Shelf Registration
     Statement, the Company may assign its obligations under the Notes and this
     Indenture to OI Inc., and the Company and each Guarantor, in its capacity
     as a Guarantor, will thereafter be released from its obligations under the
     Notes, the Guarantees of the Notes and this Indenture provided that (1) OI
     Inc. assumes all of the obligations under the Notes and this Indenture, and
     (2) the obligations of each Credit Agreement Domestic Borrower under the
     Credit Agreement have been or will be concurrently assumed by OI Inc. in
     accordance with the terms of the Credit Agreement. In the event of any such
     assignment, OI Inc. shall succeed to, and be substituted for, and may
     exercise every right and power of, the Company under the Indenture with the
     same effect as if OI Inc. had been named the Company herein, and
     restrictions imposed on and obligations of OI Group in this Indenture shall
     become restrictions imposed on and obligations of OI Inc., unless the
     context otherwise requires.

SECTION 2.06.  AMENDMENTS TO ARTICLE 6.

               Section 6.01 of the Indenture is hereby amended by adding,
immediately following clause (10), the following new clause (11):

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

SECTION 2.07.  AMENDMENTS TO ARTICLE 9.

               Section 9.02 of the Indenture is hereby amended by adding,
immediately following clause (12), the following new clauses (13) and (14):

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

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

                                       38


SECTION 2.08.  AMENDMENTS TO ARTICLE 10.

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

     SECTION 10.10  RELEASE OF GUARANTOR.

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

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

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

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

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

               (b)  Upon the release of a Guarantee by a Domestic Subsidiary
     under the Credit Agreement, the Guarantee of such Domestic Subsidiary under
     this Indenture will be released and discharged at such time and the Trustee
     shall execute an appropriate instrument evidencing such release. If any
     such Domestic Subsidiary thereafter guarantees obligations under the Credit
     Agreement (or any released Guarantee under the Credit Agreement is
     reinstated or renewed), then such Domestic Subsidiary will guarantee the
     Securities in accordance with this Article 10 and Section 4.17.

               (c)  A Guarantor shall be released from its obligations under
     this Indenture in accordance with an assignment of obligations to OI Inc.
     pursuant to Section 5.03 or in connection with the merger or consolidation
     of the Company or any of the Guarantors with or into any other of the
     Company, OI Group or any of the Guarantors or the sale, assignment,
     conveyance, transfer, lease or other disposition of assets between or among
     the Company, OI Group and any of the Guarantors, so long as such
     transaction complies with Article 4.

                                       39


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

     SECTION 10.11  MERGER, CONSOLIDATION AND SALE OF ASSETS OF A GUARANTOR.

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

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

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

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

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

SECTION 2.09.  OTHER PROVISIONS UNCHANGED.

               All provisions of the Indenture, other than as set forth in
Sections 2.01 to 2.09, inclusive, of this First Supplemental Indenture shall be
unchanged by this First Supplemental Indenture and shall remain in full force
and effect. The Indenture, as supplemented and amended by this First
Supplemental Indenture, is in all respects ratified and confirmed, and the
Indenture and this First Supplemental Indenture shall be read, taken and
construed as one and the same instrument.

                                       40


                                   ARTICLE 3.

                                  MISCELLANEOUS

SECTION 3.01.  DEFINED TERMS.

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

SECTION 3.02.  CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST INDENTURE ACT
OF 1939.

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

SECTION 3.03.  NEW YORK LAW TO GOVERN.

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

SECTION 3.04.  COUNTERPARTS.

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

SECTION 3.05.  EFFECT OF HEADINGS.

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

SECTION 3.06.  SEVERABILITY OF PROVISIONS.

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

SECTION 3.07.  SUCCESSORS AND ASSIGNS.

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

                                       41


SECTION 3.08.  BENEFIT OF SUPPLEMENTAL INDENTURE.

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

                                       42


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

                                           OWENS-BROCKWAY GLASS CONTAINER INC.

                                           By:        /s/ JAMES W. BAEHREN
                                               ---------------------------------
                                               Name:  James W. Baehren
                                               Title: Vice President

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

                                           By:        /s/ JAMES W. BAEHREN
                                               ---------------------------------
                                               Name:  James W. Baehren

                                           U.S. Bank National Association, as
                                               Trustee

                                           By:        /s/ FRANK P. LESLIE
                                               ---------------------------------
                                               Name:  Frank P. Leslie
                                               Title: Vice President

                                       43


                                                                         ANNEX A

                                                    TITLE OF OFFICER EXECUTING
          NAME OF ENTITY                             ON BEHALF OF SUCH ENTITY

ACI America Holdings Inc.                           Vice President and Secretary

Anamed International, Inc.                          Vice President and Secretary

BriGam Medical, Inc.                                Vice President and Secretary

BriGam Ventures, Inc.                               Vice President and Secretary

BriGam, Inc.                                        Vice President and Secretary

Brockway Realty Corporation                         Vice President and Secretary

Brockway Research, Inc.                             Vice President and Secretary

Continental PET Technologies, Inc.                  Vice President and Secretary

MARC Industries, Inc.                               Vice President and Secretary

Martell Medical Products, Incorporated              Vice President and Secretary

NHW Auburn, LLC                                     Vice President and Secretary
                                                    of its sole member

OB Cal South Inc.                                   Vice President and Secretary

OI AID STS Inc.                                     Vice President and Secretary

OI Auburn Inc.                                      Vice President and Secretary

OI Australia Inc.                                   Vice President and Secretary

OI Brazil Closure Inc.                              Vice President and Secretary

OI California Containers Inc.                       Vice President and Secretary

OI Castalia STS Inc.                                Vice President and Secretary

OI Consol STS Inc.                                  Vice President and Secretary

OI Ecuador STS Inc.                                 Vice President and Secretary

OI Europe & Asia Inc.                               Vice President and Secretary

  ANNEX A-1



                                                    TITLE OF OFFICER EXECUTING
             NAME OF ENTITY                           ON BEHALF OF SUCH ENTITY

OI General Finance Inc.                             Vice President and Secretary

OI General FTS Inc.                                 Vice President and Secretary

O-I Health Care Holding Corp.                       Vice President and Secretary

O-I Holding Company, Inc.                           Vice President and Secretary

OI Hungary Inc.                                     Vice President and Secretary

OI International Holdings Inc.                      Vice President and Secretary

OI Levis Park STS Inc.                              Vice President and Secretary

OI Medical Holdings Inc.                            Vice President and Secretary

OI Medical Inc.                                     Vice President and Secretary

OI Peru STS Inc.                                    Vice President and Secretary

OI Plastic Products FTS Inc.                        Vice President and Secretary

OI Poland Inc.                                      Vice President and Secretary

OI Puerto Rico STS Inc.                             Vice President and Secretary

OI Regioplast STS Inc.                              Vice President and Secretary

OI Venezuela Plastic Products Inc.                  Vice President and Secretary

OIB Produvisa Inc.                                  Vice President and Secretary

Overseas Finance Company                            Vice President and Secretary

Owens-BriGam Medical Company                        Vice President and Secretary
                                                    of each general partner

Owens-Brockway Glass Container Trading
Company                                             Vice President and Secretary

Owens-Brockway Packaging, Inc.                      Vice President and Secretary

Owens-Brockway Plastic Products Inc.                Vice President and Secretary

Owens-Illinois Closure Inc.                         Vice President and Secretary

  ANNEX A-2



                                                    TITLE OF OFFICER EXECUTING
             NAME OF ENTITY                           ON BEHALF OF SUCH ENTITY

Owens-Illinois General Inc.                         Vice President and Secretary

Owens-Illinois Group, Inc.                          Vice President, Director of
                                                    Finance and Secretary

Owens-Illinois Prescription Products Inc.           Vice President and Secretary

Owens-Illinois Specialty Products Puerto
Rico, Inc.                                          Vice President and Secretary

Product Design & Engineering, Inc.                  Vice President and Secretary

Seagate, Inc.                                       Vice President and Secretary

Seagate II, Inc.                                    Vice President and Secretary

Seagate III, Inc.                                   Vice President and Secretary

Specialty Packaging Licensing Company               Vice President and Secretary

Universal Materials, Inc.                           Vice President and Secretary

  ANNEX A-3




                                   EXHIBIT D-1

                                 [FORM OF NOTE]

[INSERT THE GLOBAL SECURITY LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS
 OF THE INDENTURE]

[INSERT THE PRIVATE PLACEMENT LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS
 OF THE INDENTURE]

                       OWENS-BROCKWAY GLASS CONTAINER INC.

                      8 7/8% SENIOR SECURED NOTES DUE 2009

Number:                     CUSIP No. ___________                     $________

               OWENS-BROCKWAY GLASS CONTAINER INC., a Delaware corporation
(the "Company"), for value received, hereby promises to pay to Cede & Co., as
nominee of The Depository Trust Company, or registered assigns, the principal
sum of ___________________________________________________________________
DOLLARS ($_________) on February 15, 2009.

               Interest Payment Dates:  February 15 and August 15, commencing
August 15, 2002.

               Record Dates: February 1 and August 1.

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

                                      D1-1


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

                                           OWENS-BROCKWAY GLASS CONTAINER INC.

                                           By:
                                               ---------------------------------
                                               Name:
                                               Title:

                                           By:
                                               ---------------------------------
                                               Name:
                                               Title:

Dated:  January 24, 2002

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

U.S. BANK NATIONAL ASSOCIATION, as Trustee

By:
     ---------------------------------
     Authorized Signatory

                                      D1-2


                       OWENS-BROCKWAY GLASS CONTAINER INC.

                      8 7/8% SENIOR SECURED NOTES DUE 2009

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

1.   INTEREST

               OWENS-BROCKWAY GLASS CONTAINER INC., a Delaware corporation
(such entity, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "COMPANY"), promises to pay interest on the
principal amount of this Note at the rate per annum shown above and shall pay
the Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement. Interest on this Note shall accrue from January 24, 2002 or from the
most recent interest payment date to which interest has been paid or provided
for, as the case may be; interest and Liquidated Damages on this Note shall be
payable semi-annually on February 15 and August 15 of each year until maturity,
or, if such day is not a Business Day, on the next succeeding Business Day
(each, an "INTEREST PAYMENT DATE"), commencing on August 15, 2002; and interest
on this Note shall be payable to holders of record on the February 1 or August 1
immediately preceding the applicable Interest Payment Date. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. The Company
shall pay defaulted interest on overdue interest, plus (to the extent lawful)
any interest payable on the defaulted interest, as provided in Section 2.11 of
the Indenture.

2.   METHOD OF PAYMENT

               The Company will pay interest and Liquidated Damages on this
Note (except defaulted interest) to the Persons who are holders ("HOLDERS") of
record in the note register of the Company (the "REGISTER") of this Note at the
close of business on the February 1 or August 1 (each, a "RECORD DATE") next
preceding the Interest Payment Date, in each case even if the Note is cancelled
solely by virtue of registration of transfer or registration of exchange after
such Record Date. The Company will pay Principal, interest and Liquidated
Damages in money of the United States that at the time of payment is legal
tender for payment of public and private debts. Principal of and interest and
Liquidated Damages, if any, on this Note will be payable, and this Note may be
exchanged or transferred, at the office or agency of the Company in the Borough
of Manhattan, the City of New York (which initially will be a Corporate Trust
Office of the Trustee); PROVIDED that, at the option of the Company, payment of
interest and Liquidated Damages, if any, may be made by check mailed to the
address of each Holder as such address appears in the Note Register PROVIDED
that payment by wire transfer of immediately available funds will be required
with respect to Principal of and interest, and Liquidated Damages, if any, on,
all Global Notes and all other Notes the Holders of which will have provided
wire transfer instructions to the Company or the Paying Agent. Such payment will
be in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.

                                      D1-3


3.   PAYING AGENT AND REGISTRAR

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

4.   INDENTURE

               The Company issued this Note under an Indenture dated as of
January 24, 2002 among the Company, the Guarantors and the Trustee, the terms of
which have been established in the First Supplemental Indenture among the
Company, the Guarantors and the Trustee, dated as of January 24, 2002
(collectively, the "INDENTURE"), pursuant to Section 2.01 of the Indenture. This
Note is a series designated as the "8 7/8% Senior Secured Notes due 2009" of the
Company. The terms of this Note include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb), as amended (the "TIA"). This Note is subject to
all such terms, and Holders are referred to the Indenture and the TIA for a
statement of those terms. Any conflict between the terms of this Note and the
Indenture will be governed by the Indenture.

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

5.   OPTIONAL REDEMPTION

               Except as described below, this Note shall not be redeemable
at the Company's option prior to February 15, 2006.

               On or after February 15, 2006, the Company may redeem all or a
part of this Note upon not less than 30 nor more than 60 days notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages, if any, thereon, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on February 15, 2006 of the years indicated below:



         YEAR                                                   PERCENTAGE
         ----                                                   ----------
                                                              
         2006..............................................      104.438%
         2007..............................................      102.219%
         2008 and thereafter...............................      100.000%


               At any time prior to February 15, 2005, the Company may redeem on
any one or more occasions up to 35% of the aggregate principal amount of Notes
(calculated after giving effect to any issuance of Additional Securities) issued
under the Indenture at a redemption price of 108.875% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings by
OI Inc. to the extent the net cash proceeds thereof are contributed to the
Company or used to purchase from the Company Capital Stock (other than
Disqualified Stock) of the

                                      D1-4


Company; PROVIDED that: (1) at least 65% of the aggregate principal amount of
Notes issued under the Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by OI Inc. and its
Subsidiaries); and (2) the redemption must occur within 60 days of the date of
the closing of such Equity Offering.

               In addition, at any time prior to February 15, 2006, this Note
may also be redeemed, in whole but not in part, at the option of the Company
upon the occurrence of a Change of Control, upon not less than 30 nor more than
60 days prior notice (but in no event more than 90 days after the occurrence of
such Change of Control or transfer event) mailed by first-class mail to each
Holder's registered address, at a redemption price equal to 100% of the
principal amount of this Note plus the Applicable Premium as of, and accrued and
unpaid interest and Liquidated Damages, if any, to, the date of redemption
(subject to the right of Holders of record on the relevant Record Date to
receive interest due on the Note on the relevant Interest Payment Date).

6.   MANDATORY REDEMPTION

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

7.   REPURCHASE AT THE OPTION OF HOLDER

               If a Change of Control occurs, unless the Company has
exercised its right to redeem the Notes pursuant to the terms of the Indenture,
each Holder of this Note will have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
that Holder's Notes pursuant to a Change of Control Offer on the terms set forth
in the Indenture. If OI Group or a Restricted Subsidiary consummates any Asset
Sales, when the aggregate amount of Excess Proceeds exceeds $25 million, the
Company will be required to make an offer (an "ASSET SALE OFFER") to all Holders
of this Note and all Holders of other Indebtedness that is PARI PASSU with this
Note containing provisions similar to those set forth in the Indenture with
respect to offers to purchase or redeem with the proceeds of sales of assets to
purchase the maximum principal amount of this Note and such other PARI PASSU
Indebtedness that may be purchased out of the Excess Proceeds on the terms, in
accordance with the procedures and subject to the limitations set forth in the
Indenture and such other PARI PASSU Indebtedness.

8.   NOTICE OF REDEMPTION

               Notice of redemption shall be mailed by first class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of this Note to be redeemed. Notices of redemption shall not be
conditional. Denominations of this Note larger than $1,000 may be redeemed in
part. If this Note is to be redeemed in part only, the notice of redemption that
relates to that portion to be redeemed shall state the portion of the principal
amount thereof to be redeemed. A new Note in principal amount equal to the
unredeemed portion of the original Note shall be issued in the name of the
Holder thereof upon cancellation of the original Note. On and after the
redemption date, interest ceases to accrue on the Note or portions thereof
called for redemption.

                                      D1-5


9.   DENOMINATIONS; TRANSFER; EXCHANGE

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

10.  PERSONS DEEMED OWNERS

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

11.  REPAYMENT TO COMPANY

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

12.  DISCHARGE AND DEFEASANCE

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

13.  DEFAULTS AND REMEDIES

               Under the Indenture, Events of Default include: (1) defaults
in the payment of interest on, or Liquidated Damages, if any, with respect to
the Notes when the same becomes due and payable and the default continues for a
period of 30 days; (2) defaults in the payment of the Principal of the Notes
when the same becomes due and payable at maturity, upon redemption or otherwise;
(3) failure by OI Group or any of its Restricted Subsidiaries for 60 days after
notice to comply with any of the other agreements in the Indenture, the Notes,
the Guarantees of the Notes (with respect to any Guarantor) and the Collateral
Documents (with respect to any Restricted Subsidiary which has pledged assets or
property to secure its obligations under the Indenture and the Notes); (4)
default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by OI Group or any Restricted Subsidiary (or the payment of which is
guaranteed by OI Group or any of its Restricted Subsidiaries) whether such
Indebtedness or Guarantee now exists, or is created after the date of the
Indenture, if that default: (a) is caused by a failure to pay Principal of, or
interest on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a "PAYMENT DEFAULT");
or (b) results in the acceleration

                                      D1-6


of such Indebtedness prior to its express maturity; PROVIDED, that an Event of
Default shall not be deemed to occur with respect to any such accelerated
Indebtedness which is repaid or prepaid within 20 Business Days after such
declaration; and, in any individual case, the principal amount of any such
Indebtedness is equal to or in excess of $50.0 million, or such Indebtedness
together with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $100.0 million or more; (5) any final judgment or order
for payment of money in excess of $50.0 million in any individual case and
$100.0 million in the aggregate at any time shall be rendered against OI Group
or any of its Restricted Subsidiaries and such judgment shall not have been
paid, discharged or stayed for a period of 60 days; (6) except as permitted by
the Indenture or the Collateral Documents, any Guarantee of the Notes shall be
held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or any Guarantor, or any Person
acting on behalf of any Guarantor, shall deny or disaffirm its obligations under
its Guarantee of the Notes; (7) the Company, OI Group or any Significant
Subsidiary of OI Group pursuant to or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case; (b) consents to the entry of an order for relief
against it in an involuntary case; (c) consents to the appointment of a
Custodian of it or for all or substantially all of its property; (d) makes a
general assignment for the benefit of its creditors; or (e) admits in writing
its inability generally to pay its debts as the same become due; (8) a court of
competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(a) is for relief against the Company, OI Group or any Significant Subsidiary of
OI Group in an involuntary case; (b) appoints a Custodian of the Company, OI
Group or any Significant Subsidiary of OI Group or for all or substantially all
of such entity's property; or (c) orders the liquidation of the Company, OI
Group or any Significant Subsidiary of OI Group; and, with respect to (a), (b)
and (c), the order or decree remains unstayed and in effect for 60 days; (9)
except as permitted by the Collateral Documents, any amendments thereto and the
provisions of the Indenture, any of the Collateral Documents ceases to be in
full force and effect or ceases to be effective, in all material respects, to
create the Lien purported to be created in the Collateral in favor of the
Holders of the Notes for 60 days after notice; and (10) failure by OI Group or
any of its Restricted Subsidiaries to comply with the provisions of Sections
4.10 or 4.11 or Article 5 of the Indenture.

               If an Event of Default other than an Event or Default
specified in clauses (7) and (8) of the preceding paragraph occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in principal amount of the then outstanding Notes by notice to the Company and
the Trustee, as provided in the Indenture, may declare the unpaid Principal of
and any accrued and unpaid interest on the Notes to be due and payable
immediately. Upon such declaration the Principal (or such lesser amount) and
interest shall be due and payable immediately. At any time after a declaration
of acceleration with respect to the Notes has been made, the Holders of a
majority in principal amount of the then outstanding Notes may, under certain
circumstances, rescind such acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default with respect to the Notes have been cured or waived except nonpayment of
Principal or interest that has become due solely because of the acceleration.

               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

                                      D1-7


under the Indenture at the request of any Holder of this Note, unless such
Holder shall have offered to the Trustee security and indemnity satisfactory to
it against any loss, liability or expense. Subject to certain provisions,
including those requiring security or indemnification of the Trustee, the
Holders of a majority in principal amount of the outstanding Note have the right
to direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee, with respect to this Note.

14.  SUPPLEMENTS, AMENDMENTS AND WAIVERS

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

15.  TRUSTEE DEALINGS WITH THE COMPANY

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

16.  NO RECOURSE AGAINST OTHERS

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

17.  GUARANTEES

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

                                      D1-8


18.  GOVERNING LAW

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

19.  AUTHENTICATION

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

20.  ABBREVIATIONS

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

21.  ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED
     DEFINITIVE NOTES.

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

22.  CUSIP NUMBERS

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

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

                                         Owens-Brockway Glass Container Inc.
                                         One SeaGate
                                         Toledo, Ohio  43666
                                         Attention:  Investor Relations

                                         ------------------------------------

                                      D1-9


                                 ASSIGNMENT FORM

                  TO ASSIGN THIS NOTE, FILL IN THE FORM BELOW:

                    I or we assign and transfer this Note to:

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
              [PRINT OR TYPE ASSIGNEE'S NAME, ADDRESS AND ZIP CODE]

- --------------------------------------------------------------------------------
                  [INSERT ASSIGNEE'S SOC. SEC. OR TAX I.D. NO.]

and irrevocably appoint

- --------------------------------------------------------------------------------
                          [PRINT OR TYPE AGENT'S NAME]

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

- --------------------------------------------------------------------------------

Date:_______________

                              Your Signature:
                                              ----------------------------------
                                              (SIGN EXACTLY AS YOUR NAME APPEARS
                                                 ON THE FACE OF THIS NOTE)

SIGNATURE GUARANTEE

- -------------------------------------
Participant in a Recognized Signature
Guarantee Medallion Program

                                     D1-10


                       OPTION OF HOLDER TO ELECT PURCHASE

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

                  / /  Section 4.10                 / /  Section 4.11

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

Date:
     -----------------

                          Your Signature:
                                          --------------------------------------
                                          (SIGN EXACTLY AS YOUR NAME APPEARS ON
                                           THE FACE OF THIS NOTE)

                          Tax Identification No:
                                                    ----------------------------

SIGNATURE GUARANTEE

- ----------------------------------
Participant in a Recognized Signature
Guarantee Medallion Program

                                     D1-11


             SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

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



                                                                        Principal Amount
                         Amount of decrease     Amount of increase           of this
                                in                     in                  Global Note             Signature
                             Principal               Principal            following such         of authorized
                             Amount of               Amount of            decrease (or            signatory of
Date of Exchange           this Global Note       this Global Note           increase)         Trustee or Custodian
- ----------------         --------------------   --------------------   --------------------   ---------------------
                                                                                  



* THIS SHOULD BE INCLUDED ONLY IF THE NOTE IS ISSUED IN GLOBAL FORM.

                                      D1-12


                                   EXHIBIT D-2
                  [FORM OF REGULATION S TEMPORARY GLOBAL NOTE]

[INSERT THE GLOBAL SECURITY LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS
 OF THE INDENTURE]

[INSERT THE PRIVATE PLACEMENT LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS
 OF THE INDENTURE]

[INSERT THE REGULATION S TEMPORARY GLOBAL SECURITY LEGEND]

                       OWENS-BROCKWAY GLASS CONTAINER INC.

                      8 7/8% SENIOR SECURED NOTES DUE 2009

Number:                     CUSIP No.                                $
                                     --------------                   ----------

               OWENS-BROCKWAY GLASS CONTAINER INC., a Delaware corporation
(the "Company"), for value received, hereby promises to pay to Cede & Co., as
nominee of The Depository Trust Company, or registered assigns, the principal
sum of _________________________________________________________________________
DOLLARS ($_________) on February 15, 2009.

               Interest Payment Dates:  February 15 and August 15, commencing
August 15, 2002.

               Record Dates: February 1 and August 1.

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

                                      D2-1


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

                                           OWENS-BROCKWAY GLASS CONTAINER INC.

                                           By:
                                               ---------------------------------
                                               Name:
                                               Title:

                                           By:
                                               ---------------------------------
                                               Name:
                                               Title:

Dated:  January 24, 2002

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

U.S. BANK NATIONAL ASSOCIATION, as Trustee

By:
     ---------------------------------
      Authorized Signatory

                                      D2-2


                       OWENS-BROCKWAY GLASS CONTAINER INC.

                      8 7/8% SENIOR SECURED NOTES DUE 2009

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

1.   INTEREST

               OWENS-BROCKWAY GLASS CONTAINER INC., a Delaware corporation
(such entity, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "COMPANY"), promises to pay interest on the
principal amount of this Note at the rate per annum shown above and shall pay
the Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement. Interest on this Note shall accrue from January 24, 2002 or from the
most recent interest payment date to which interest has been paid or provided
for, as the case may be; interest and Liquidated Damages on this Note shall be
payable semi-annually on February 15 and August 15 of each year until maturity,
or, if such day is not a Business Day, on the next succeeding Business Day
(each, an "INTEREST PAYMENT DATE"), commencing on August 15, 2002; and interest
on this Note shall be payable to holders of record on the February 1 or August 1
immediately preceding the applicable Interest Payment Date. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. The Company
shall pay defaulted interest on overdue interest, plus (to the extent lawful)
any interest payable on the defaulted interest, as provided in Section 2.11 of
the Indenture.

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

2.   METHOD OF PAYMENT

               The Company will pay interest and Liquidated Damages on this
Note (except defaulted interest) to the Persons who are holders ("HOLDERS") of
record in the note register of the Company (the "REGISTER") of this Note at the
close of business on the February 1 or August 1 (each, a "RECORD DATE") next
preceding the Interest Payment Date, in each case even if the Note is cancelled
solely by virtue of registration of transfer or registration of exchange after
such Record Date. The Company will pay Principal, interest and Liquidated
Damages in money of the United States that at the time of payment is legal
tender for payment of public and private debts. Principal of and interest and
Liquidated Damages, if any, on this Note will be payable, and this Note may be
exchanged or transferred, at the office or agency of the Company in the Borough
of Manhattan, the City of New York (which initially will be a Corporate Trust
Office of the Trustee); PROVIDED that, at the option of the Company, payment of
interest and Liquidated Damages, if any, may be made by check mailed to the
address of each Holder as such address

                                      D1-3


appears in the Note Register PROVIDED that payment by wire transfer of
immediately available funds will be required with respect to Principal of and
interest, and Liquidated Damages, if any, on, all Global Notes and all other
Notes the Holders of which will have provided wire transfer instructions to the
Company or the Paying Agent. Such payment will be in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.

3.   PAYING AGENT AND REGISTRAR

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

4.   INDENTURE

               The Company issued this Note under an Indenture dated as of
January 24, 2002 among the Company, the Guarantors and the Trustee, the terms of
which have been established in the First Supplemental Indenture among the
Company, the Guarantors and the Trustee, dated as of January 24, 2002
(collectively, the "INDENTURE"), pursuant to Section 2.01 of the Indenture. This
Note is a series designated as the "8?% Senior Secured Notes due 2009" of the
Company. The terms of this Note include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. Sections. 77aaa-77bbbb), as amended (the "TIA"). This Note is subject to
all such terms, and Holders are referred to the Indenture and the TIA for a
statement of those terms. Any conflict between the terms of this Note and the
Indenture will be governed by the Indenture.

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

5.   OPTIONAL REDEMPTION

               Except as described below, this Note shall not be redeemable
at the Company's option prior to February 15, 2006.

               On or after February 15, 2006, the Company may redeem all or a
part of this Note upon not less than 30 nor more than 60 days notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages, if any, thereon, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on February 15, 2006 of the years indicated below:



         YEAR                                                        PERCENTAGE
         ----                                                        ----------
                                                                   
         2006..................................................       104.438%
         2007..................................................       102.219%
         2008 and thereafter...................................       100.000%


                                      D2-4


               At any time prior to February 15, 2005, the Company may redeem
on any one or more occasions up to 35% of the aggregate principal amount of
Notes (calculated after giving effect to any issuance of Additional Securities)
issued under the Indenture at a redemption price of 108.875% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
to the redemption date, with the net cash proceeds of one or more Equity
Offerings by OI Inc. to the extent the net cash proceeds thereof are contributed
to the Company or used to purchase from the Company Capital Stock (other than
Disqualified Stock) of the Company; PROVIDED that: (1) at least 65% of the
aggregate principal amount of Notes issued under the Indenture remains
outstanding immediately after the occurrence of such redemption (excluding Notes
held by OI Inc. and its Subsidiaries); and (2) the redemption must occur within
60 days of the date of the closing of such Equity Offering.

               In addition, at any time prior to February 15, 2006, this Note
may also be redeemed, in whole but not in part, at the option of the Company
upon the occurrence of a Change of Control, upon not less than 30 nor more than
60 days prior notice (but in no event more than 90 days after the occurrence of
such Change of Control or transfer event) mailed by first-class mail to each
Holder's registered address, at a redemption price equal to 100% of the
principal amount of this Note plus the Applicable Premium as of, and accrued and
unpaid interest and Liquidated Damages, if any, to, the date of redemption
(subject to the right of Holders of record on the relevant Record Date to
receive interest due on the Note on the relevant Interest Payment Date).

6.   MANDATORY REDEMPTION

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

7.   REPURCHASE AT THE OPTION OF HOLDER

               If a Change of Control occurs, unless the Company has
exercised its right to redeem the Notes pursuant to the terms of the Indenture,
each Holder of this Note will have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
that Holder's Notes pursuant to a Change of Control Offer on the terms set forth
in the Indenture. If OI Group or a Restricted Subsidiary consummates any Asset
Sales, when the aggregate amount of Excess Proceeds exceeds $25 million, the
Company will be required to make an offer (an "ASSET SALE OFFER") to all Holders
of this Note and all Holders of other Indebtedness that is PARI PASSU with this
Note containing provisions similar to those set forth in the Indenture with
respect to offers to purchase or redeem with the proceeds of sales of assets to
purchase the maximum principal amount of this Note and such other PARI PASSU
Indebtedness that may be purchased out of the Excess Proceeds on the terms, in
accordance with the procedures and subject to the limitations set forth in the
Indenture and such other PARI PASSU Indebtedness.

8.   NOTICE OF REDEMPTION

               Notice of redemption shall be mailed by first class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of this Note to be redeemed. Notices of redemption shall not be
conditional. Denominations of this Note larger than $1,000

                                      D2-5


may be redeemed in part. If this Note is to be redeemed in part only, the notice
of redemption that relates to that portion to be redeemed shall state the
portion of the principal amount thereof to be redeemed. A new Note in principal
amount equal to the unredeemed portion of the original Note shall be issued in
the name of the Holder thereof upon cancellation of the original Note. On and
after the redemption date, interest ceases to accrue on the Note or portions
thereof called for redemption.

9.   DENOMINATIONS; TRANSFER; EXCHANGE

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

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

10.  PERSONS DEEMED OWNERS

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

11.  REPAYMENT TO COMPANY

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

12.  DISCHARGE AND DEFEASANCE

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

                                      D2-6


13.  DEFAULTS AND REMEDIES

               Under the Indenture, Events of Default include: (1) defaults
in the payment of interest on, or Liquidated Damages, if any, with respect to
the Notes when the same becomes due and payable and the default continues for a
period of 30 days; (2) defaults in the payment of the Principal of the Notes
when the same becomes due and payable at maturity, upon redemption or otherwise;
(3) failure by OI Group or any of its Restricted Subsidiaries for 60 days after
notice to comply with any of the other agreements in the Indenture, the Notes,
the Guarantees of the Notes (with respect to any Guarantor) and the Collateral
Documents (with respect to any Restricted Subsidiary which has pledged assets or
property to secure its obligations under the Indenture and the Notes); (4)
default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by OI Group or any Restricted Subsidiary (or the payment of which is
guaranteed by OI Group or any of its Restricted Subsidiaries) whether such
Indebtedness or Guarantee now exists, or is created after the date of the
Indenture, if that default: (a) is caused by a failure to pay Principal of, or
interest on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a "PAYMENT DEFAULT");
or (b) results in the acceleration of such Indebtedness prior to its express
maturity; PROVIDED, that an Event of Default shall not be deemed to occur with
respect to any such accelerated Indebtedness which is repaid or prepaid within
20 Business Days after such declaration; and, in any individual case, the
principal amount of any such Indebtedness is equal to or in excess of $50.0
million, or such Indebtedness together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $100.0 million or more; (5) any
final judgment or order for payment of money in excess of $50.0 million in any
individual case and $100.0 million in the aggregate at any time shall be
rendered against OI Group or any of its Restricted Subsidiaries and such
judgment shall not have been paid, discharged or stayed for a period of 60 days;
(6) except as permitted by the Indenture or the Collateral Documents, any
Guarantee of the Notes shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Guarantee of the Notes; (7) the
Company, OI Group or any Significant Subsidiary of OI Group pursuant to or
within the meaning of any Bankruptcy Law: (a) commences a voluntary case; (b)
consents to the entry of an order for relief against it in an involuntary case;
(c) consents to the appointment of a Custodian of it or for all or substantially
all of its property; (d) makes a general assignment for the benefit of its
creditors; or (e) admits in writing its inability generally to pay its debts as
the same become due; (8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (a) is for relief against the Company, OI
Group or any Significant Subsidiary of OI Group in an involuntary case; (b)
appoints a Custodian of the Company, OI Group or any Significant Subsidiary of
OI Group or for all or substantially all of such entity's property; or (c)
orders the liquidation of the Company, OI Group or any Significant Subsidiary of
OI Group; and, with respect to (a), (b) and (c), the order or decree remains
unstayed and in effect for 60 days; (9) except as permitted by the Collateral
Documents, any amendments thereto and the provisions of the Indenture, any of
the Collateral Documents ceases to be in full force and effect or ceases to be
effective, in all material respects, to create the Lien purported to be created
in the Collateral in favor of the Holders of the Notes for 60 days after notice;
and (10) failure by

                                      D2-7


OI Group or any of its Restricted Subsidiaries to comply with the provisions of
Sections 4.10 or 4.11 or Article 5 of the Indenture.

               If an Event of Default other than an Event or Default
specified in clauses (7) and (8) of the preceding paragraph occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in principal amount of the then outstanding Notes by notice to the Company and
the Trustee, as provided in the Indenture, may declare the unpaid Principal of
and any accrued and unpaid interest on the Notes to be due and payable
immediately. Upon such declaration the Principal (or such lesser amount) and
interest shall be due and payable immediately. At any time after a declaration
of acceleration with respect to the Notes has been made, the Holders of a
majority in principal amount of the then outstanding Notes may, under certain
circumstances, rescind such acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default with respect to the Notes have been cured or waived except nonpayment of
Principal or interest that has become due solely because of the acceleration.

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

14.  SUPPLEMENTS, AMENDMENTS AND WAIVERS

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

15.  TRUSTEE DEALINGS WITH THE COMPANY

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

                                      D2-8


16.  NO RECOURSE AGAINST OTHERS

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

17.  GUARANTEES

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

18.  GOVERNING LAW

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

19.  AUTHENTICATION

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

20.  ABBREVIATIONS

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

21.  ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED
     DEFINITIVE NOTES.

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

                                      D2-9


22.  CUSIP NUMBERS

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

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

                               Owens-Brockway Glass Container Inc.
                               One SeaGate
                               Toledo, Ohio  43666
                               Attention:  Investor Relations

              ----------------------------------------------------

                                      D2-10


                                 ASSIGNMENT FORM

                  TO ASSIGN THIS NOTE, FILL IN THE FORM BELOW:

                    I or we assign and transfer this Note to:

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
              [PRINT OR TYPE ASSIGNEE'S NAME, ADDRESS AND ZIP CODE]

- --------------------------------------------------------------------------------
                  [INSERT ASSIGNEE'S SOC. SEC. OR TAX I.D. NO.]

and irrevocably appoint

- --------------------------------------------------------------------------------
                          [PRINT OR TYPE AGENT'S NAME]

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

________________________________________________________________________________

Date: _____________

                             Your Signature:
                                            ------------------------------------
                                            (SIGN EXACTLY AS YOUR NAME APPEARS
                                              ON THE FACE OF THIS NOTE)
SIGNATURE GUARANTEE

- ----------------------------------
Participant in a Recognized Signature
Guarantee Medallion Program

                                      D2-11


                       OPTION OF HOLDER TO ELECT PURCHASE

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

                  / /  Section 4.10          / /  Section 4.11

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

Date:__________________       Your Signature:
                                             -----------------------------------
                                              (SIGN EXACTLY AS YOUR NAME APPEARS
                                              ON THE FACE OF THIS NOTE)

                              Tax Identification No:____________________________

SIGNATURE GUARANTEE

- ----------------------------------
Participant in a Recognized Signature
Guarantee Medallion Program

                                      D2-12


             SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

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



                                                                         Principal Amount
                          Amount of Decrease     Amount of Increase           of This
                                  in                     in                 Global Note             Signature
                              Principal               Principal            Following Such         of Authorized
                              Amount of               Amount of            Decrease (Or            Signatory of
Date of Exchange           this Global Note       this Global Note           increase)         Trustee or Custodian
- -----------------------  --------------------   --------------------   --------------------   ---------------------
                                                                                  



* THIS SHOULD BE INCLUDED ONLY IF THE NOTE IS ISSUED IN GLOBAL FORM.

                                     D2-13

EX-4.14

                                                               Exhibit 4.14

                           OWENS-ILLINOIS GROUP, INC.
                       OWENS-BROCKWAY GLASS CONTAINER INC.
                               OI GENERAL FTS INC.
                          OI PLASTIC PRODUCTS FTS INC.
                               OI CLOSURE FTS INC.
                              UNITED GLASS LIMITED
                           UNITED GLASS GROUP LIMITED
                     OWENS-ILLINOIS (AUSTRALIA) PTY LIMITED
                           ACI OPERATIONS PTY LIMITED
                                OI ITALIA S.R.L.
                  AZIENDE VETRARIE INDUSTRIALI RICCIARDI S.P.A.

                                 FIRST AMENDMENT
                     TO SECURED CREDIT AGREEMENT AND CONSENT
                          DATED AS OF DECEMBER 31, 2001

          This FIRST AMENDMENT TO SECURED CREDIT AGREEMENT AND CONSENT (this
"AMENDMENT") is dated as of December 31, 2001 and entered into by and among
OWENS-ILLINOIS GROUP, INC., a Delaware corporation ("COMPANY"), OWENS-BROCKWAY
GLASS CONTAINER INC., a Delaware corporation ("OWENS BROCKWAY"), OI GENERAL FTS
INC., a Delaware corporation ("O-I GENERAL FTS"), OI PLASTIC PRODUCTS FTS INC.,
a Delaware corporation ("O-I PLASTIC"), O-I CLOSURE FTS INC., a Delaware
corporation ("O-I CLOSURE"), UNITED GLASS LIMITED, a corporation organized under
the laws of England and Wales, UNITED GLASS GROUP LIMITED, a corporation
organized under the laws of England and Wales, OWENS-ILLINOIS (AUSTRALIA) PTY
LIMITED, a limited liability company organized under the laws of Australia, ACI
OPERATIONS PTY LIMITED, a limited liability company organized under the laws of
Australia, OI ITALIA S.R.L., a limited liability company organized under the
laws of Italy, AZIENDE VETRARIE INDUSTRIALI RICCIARDI S.P.A., a joint stock
company organized under the laws of Italy, OWENS-ILLINOIS GENERAL, INC., a
Delaware corporation, as Borrowers' Agent (in such capacity "BORROWERS' AGENT"),
THE LENDERS LISTED ON THE SIGNATURE PAGES HEREOF (each individually a "LENDER"
and collectively, "LENDERS") and BANKERS TRUST COMPANY, as Administrative Agent
(in such capacity, "ADMINISTRATIVE AGENT") and Collateral Agent (in such
capacity, "COLLATERAL AGENT") for the Lenders and is made with reference to that
certain Secured Credit Agreement dated as of April 23, 2001 (the "CREDIT
Agreement"), by and among the foregoing parties. Capitalized terms used herein
without definition shall have the same meanings herein as set forth in the
Credit Agreement, and, if not defined herein or in the Credit Agreement, as
defined in the Intercreditor Agreement (as defined in the Credit Agreement).



                                    RECITALS

          WHEREAS, the Credit Agreement permits the Company and it Subsidiaries
to incur certain Indebtedness, including the issuance from time to time of
Indebtedness constituting New Senior Debt, the proceeds of which are required to
be used initially to repay the Term Loans owing to the Lenders until paid in
full;

          WHEREAS, the Credit Agreement permits Indebtedness from time to time
issued constituting New Senior Debt to be secured by the Domestic Collateral (as
defined in the Intercreditor Agreement) under the Domestic Collateral Documents
and permits such Indebtedness to constitute "Senior Secured Obligations" under
the Intercreditor Agreement;

          WHEREAS, Owens Brockway desires to issue proposed Senior Secured Notes
(together with any notes issued in exchange therefor or replacement thereof
containing substantially identical terms, the "NEW 2002 SENIOR NOTES") which
constitute New Senior Debt and desires to secure the obligations in respect of
such New 2002 Senior Notes by certain of the Domestic Collateral;

          WHEREAS, in order to facilitate the issuance of the New 2002 Senior
Notes, Owens Brockway desires to obtain the consent of the Requisite Lenders and
Requisite Obligees, as applicable, to the Collateral Agent's and Administrative
Agent's amendment of the Collateral Documents and the Intercreditor Agreement to
eliminate or defer the provision of certain of the Domestic Collateral as
security for the New 2002 Senior Notes, which Domestic Collateral would
otherwise secure the obligations in respect of such New 2002 Senior Notes upon
their issuance and the execution of a counterpart to the Intercreditor Agreement
by the New Senior Debt Representative and Borrower's Agent, subject to the
qualification of the Indebtedness evidenced by such Notes (and guarantees
thereof) as New Senior Debt, including, without limitation, confirmation by the
Administrative Agent that, in Administrative Agent's reasonable judgment, the
proposed terms of the New 2002 Senior Notes are substantially comparable to
those prevailing in the market place for comparable debt issuances and the
application of the Net Debt Securities Proceeds arising from the issuance of the
New 2002 Senior Notes to repay the Term Loans pursuant to Section 2.4A(ii)(e) of
the Credit Agreement;

          WHEREAS, Company and Borrowers desire to obtain the consent of the
Requisite Lenders to the merger of O-I Closure into O-I Plastic; and

          WHEREAS, Company and Borrowers desire to obtain the consent of the
Requisite Lenders to certain other amendments described herein;

                                        2


          NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:

SECTION 1.     CONSENT TO AMENDMENT OF COLLATERAL DOCUMENTS AND INTERCREDITOR
               AGREEMENT BY COLLATERAL AGENT AND ADMINISTRATIVE AGENT.

          By their execution and delivery of this Amendment, Lenders
approve, consent and agree that upon the issuance of the New 2002 Senior Notes,
the qualification of such New 2002 Senior Notes as New Senior Debt and the
effectiveness of this Amendment, Collateral Agent and Administrative Agent may
appropriately modify the Collateral Documents and the Intercreditor Agreement
pursuant to, and execute and deliver, documentation acceptable to the Collateral
Agent and Administrative Agent to (A) provide that: (i) the pledge of the
Pledged Collateral (as defined in the Pledge Agreement) under the Pledge
Agreement shall not benefit the holders of the New 2002 Senior Notes until April
1, 2002; (ii) irrespective of clause A(i), above, the senior pledge by Company
of its shares in, and intercompany debt owing from, O-I General FTS (the
"EXCLUDED PLEDGED COLLATERAL") pursuant to the Pledge Agreement shall not
benefit the holders of the New 2002 Senior Notes, the holders of such New 2002
Senior Notes shall not be entitled to any portion of the cash proceeds received
by Collateral Agent in respect of any sale of, collection from or other
realization upon the Excluded Pledged Collateral and neither the holders of the
New 2002 Senior Notes nor any New Senior Debt Representative with respect
thereto shall have any right to direct Collateral Agent with respect to the
exercise of remedies with respect to the Excluded Pledged Collateral; and (iii)
the grant of a security interest under the Security Agreement in certain
Securities Collateral (as defined in the Security Agreement) by Grantors (as
defined in the Security Agreement) shall not benefit the holders of the New 2002
Senior Notes, the holders of such New 2002 Senior Notes shall not be entitled to
any portion of the cash proceeds received by Collateral Agent in respect of any
sale of, collection from or other realization upon such Securities Collateral
and neither the holders of the New 2002 Senior Notes nor any New Senior Debt
Representative with respect thereto shall have any right to direct Collateral
Agent with respect to the exercise of remedies with respect to such Securities
Collateral; (B) confirm the right of Collateral Agent to release liens on
Domestic Collateral pledged by a Domestic Borrower or Subsidiary Guarantor under
the Security Agreement or the Mortgages upon the sale, transfer or disposition
of the Capital Stock of and intercompany indebtedness owing by or to such
Borrower or Subsidiary Guarantor or the direct or indirect parent thereof as
permitted by the Credit Agreement or in connection with the Collateral Agent's
exercise of remedies under the Domestic Collateral Documents and (C) make other
appropriate clarifying or conforming changes or such changes as may be necessary
to cure any ambiguity, defect or inconsistency, including, without limitation,
amendment of the Offshore Collateral Documents executed by the Australian
Offshore Borrowers or Offshore Guarantors to provide for the release of the
liens created thereby upon the achievement of the Threshold Debt Rating. The
foregoing modifications of the Collateral Documents and the Intercreditor
Agreement may be made without any further authorization by Lenders or the
approval of the form of the documentation effecting any such modifications.

                                        3


SECTION 2.     CONSENT TO MERGER OF O-I CLOSURE INTO O-I PLASTIC

          Notwithstanding SECTION 6.7 of the Credit Agreement, by their
execution and delivery of this Amendment, Lenders approve, consent and agree to
the merger of O-I Closure into O-I Plastic, so long as (i) the merger is
performed in connection with the issuance of the New 2002 Senior Notes and the
application of the Net Debt Securities Proceeds arising therefrom pursuant to
Subsection 2.4A(ii)(e) of the Credit Agreement; (ii) O-I Plastic is the
surviving entity following such merger; and (iii) O-I Plastic assumes, for the
benefit of Lenders, all of O-I Closure's obligations under the Credit Agreement
and the other Loan Documents. Irrespective of such express assumption, Company
and Borrowers agree that upon consummation of such merger, O-I Plastic shall
succeed to all obligations of O-I Closure under the Credit Agreement and the
other Loan Documents by operation of law. Upon the consummation of such merger
and the delivery to Administrative Agent of satisfactory documentation
evidencing such merger and the assumption described above, (A) the definition of
"Domestic Borrower" shall be deemed amended to eliminate O-I Closure as a
Domestic Borrower, the Revolving Loan Commitments of the Revolving Lenders to
O-I Closure shall be deemed to be Revolving Loan Commitments by Revolving
Lenders to O-I Plastic, (B) SCHEDULE A to the Credit Agreement shall be amended
to delete references to O-I Closure, reflect the former Revolving Loan
Commitments of Revolving Lenders to O-I Closure as additional Revolving Loan
Commitments by Revolving Lenders to O-I Plastic, and to increase O-I Plastic's
Proportionate Percentage of Revolving Loan Commitments to 33.333333333%, and (C)
the Revolving Notes issued by O-I Closure shall be the obligations of O-I
Plastic. Notwithstanding the merger of O-I Closure and O-I Plastic, Closure &
Specialty shall remain a separate and distinct Reporting Unit for purposes of
SECTION 5.1 of the Credit Agreement.

SECTION 3.     AGENTS' CONSENT TO AMENDMENT OF COMPANY'S SUBORDINATED
               INTERCOMPANY NOTE TO HOLDINGS

          Each Agent hereby consents to the amendment of Company's
intercompany note dated as of April 23, 2001 to Holdings solely for the purpose
of subordinating the Indebtedness evidenced thereby in right of payment to the
Indebtedness evidenced by New Senior Debt, pursuant to an amendment in a form
reasonably satisfactory to Administrative Agent.

SECTION 4.     CONSENT TO AMENDMENT OF DOMESTIC BORROWERS' GUARANTY

          By their execution and delivery of this Amendment, Lenders
approve, consent and agree to the addition of the following paragraph to the
Domestic Borrowers' Guaranty:

          If all of the stock of any Guarantor or any of its successors in
interest under this Guaranty shall be sold or otherwise disposed of (including
by merger or consolidation) in an Asset Sale consented to by Requisite Lenders
under the Credit Agreement, the Guaranty of such Guarantor or such successor in
interest, as the case may be, hereunder shall automatically be discharged and
released without any further action by Collateral Agent or

                                        4


any other Person or any Guarantied Party, effective as of the time of such Asset
Sale or consent.

SECTION 5.     OTHER AMENDMENTS TO THE CREDIT AGREEMENT

          5.1      CHANGE OF CONTROL. The definition of "Change of Control" is
hereby amended by adding the following after the first use of the words "Voting
Stock" therein: "or any event constituting a "change of control" under any
indenture governing any New Senior Debt, Refinancing Senior Debt or New Junior
Debt."

          5.2       CONSOLIDATED ADJUSTED EBITDA. The definition of
"Consolidated Adjusted EBITDA" is hereby amended by striking the word "and"
immediately after the word "items" and adding the following after the word
"losses" therein: "and (vii) minority share owners' interests in earnings of
subsidiaries."

          5.3       NEW SENIOR DEBT. The definition of "New Senior Debt" is
hereby amended (i) by adding the following parenthetical after the first use of
the word "Indebtedness" therein: "(including guarantees thereof and Indebtedness
and guarantees issued in exchange or in replacement thereof containing
substantially identical terms)" and (ii) by adding the following to the end of
clause (w) thereof: "except for provisions requiring any permitted obligor under
clause (u) above to repurchase all or a portion of New Senior Debt from the
holders thereof upon the occurrence of a "change of control" or following an
"asset sale" (such terms to be defined in the indenture(s) governing such New
Senior Debt).

          5.4       DOMESTIC OVERDRAFT ACCOUNT. Subsection 2.1B of the Credit
Agreement is hereby amended by adding the phrase "having Revolving Loan
Exposure" after the phrase "other Lender" in the first two instances in which
such phrase is used in such Section and after the phrase "each Lender" in the
first proviso of such Section.

          5.5       NO RESTRICTION ON SUBSIDIARY DISTRIBUTIONS. Section 6.2B of
the Credit Agreement is hereby amended by (i) striking the words "and (g)" and
replacing them with the following "(g) any restrictions under indentures
governing New Senior Debt, which restrictions are approved by Administrative
Agent, and (h)" and (ii) striking the clause "(a) through (f)" and replacing it
with the clause "(a) through (g)".

          5.6       RESTRICTED JUNIOR PAYMENTS. Section 6.5 is hereby amended by
striking the word "and" after the word "subsection 2.5A" and adding the
following after the words "past practices": "and (v) make, and Subsidiaries of
Company may make, payments of intercompany indebtedness other than payments of
Company's intercompany Indebtedness to Holdings."

                                        5


          5.7       RESTRICTION ON FUNDAMENTAL CHANGES. Section 6.7 of the
Credit Agreement is hereby amended by inserting the word "Domestic" before the
word "Borrower" each time such word appears in the final proviso of such
Section.

SECTION 6.     CONDITIONS TO EFFECTIVENESS
          Sections 1, 2, 3, 4 and 5 of this Amendment shall become effective
only upon the satisfaction of all of the following conditions precedent (the
date of satisfaction of such conditions being referred to herein as the "FIRST
AMENDMENT EFFECTIVE DATE"):

          A. On or before the First Amendment Effective Date, Company and
each of the Borrowers shall deliver to Administrative Agent sufficient
originally executed copies, where appropriate, for each Lender and its counsel
the following, each, unless otherwise noted, dated the First Amendment Effective
Date:

                    (i) Resolutions of its Board of Directors approving and
     authorizing the execution, delivery, and performance of this Amendment,
     certified as of the First Amendment Effective Date by its corporate
     secretary or an assistant secretary as being in full force and effect
     without modification or amendment;

                    (ii) Signature and incumbency certificates of its officers
     executing this Amendment; and

                    (iii) Executed copies of this Amendment.

          B. On or before the First Amendment Effective Date, all corporate
and other proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel
shall be satisfactory in form and substance to Administrative Agent and such
counsel, and Administrative Agent and such counsel shall have received all such
counterpart originals or certified copies of such documents as Administrative
Agent may reasonably request.

          C. Administrative Agent and Collateral Agent shall have received
a written acknowledgement from each of the Subsidiary Guarantors providing that
it has reviewed the terms and provisions of the Credit Agreement and this
Amendment and consents to the amendment of the Credit Agreement effected
pursuant to this Amendment, that the Subsidiary Guaranty and each Collateral
Document executed by such Subsidiary Guarantor shall continue in full force and
effect and that all of its obligations thereunder shall be valid and enforceable
and shall not be impaired or limited by the execution or effectiveness of this
Amendment and such other matters as Administrative Agent may reasonably request,
all in a form satisfactory to Administrative Agent.

SECTION 7.     COMPANY'S REPRESENTATIONS AND WARRANTIES

          In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, Company and each of
the Borrowers

                                        6


represents and warrants to each Lender that the following
statements are true, correct and complete:

          7.1       CORPORATE POWER AND AUTHORITY. Company and each Borrower has
all requisite corporate power and authority to enter into this Amendment and to
carry out the transactions contemplated by, and perform its obligations under,
the Credit Agreement as amended by this Amendment (the "AMENDED AGREEMENT").

          7.2       AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of Company and each
Borrower.

          7.3       NO CONFLICT. The execution and delivery by Company and each
Borrower of this Amendment and the performance by each Loan Party of the Amended
Agreement do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to Company or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of Company
or any of its Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on Company or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of Company or any of
its Subsidiaries, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Company or any of its Subsidiaries
(other than Liens in favor of the Collateral Agent), or (iv) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of Company or any of its Subsidiaries, other than those
approvals and consents which have been obtained.

          7.4       GOVERNMENTAL CONSENTS. The execution and delivery by Company
and each Borrower of this Amendment and the performance by Company and each
Borrower of the Amended Agreement do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body, except for
filings, consents or notices that have been or will be made or obtained during
the period in which they are required to be obtained or made.

          7.5       BINDING OBLIGATION. This Amendment and the Amended Agreement
have been duly executed and delivered by Company and each Borrower and are the
legally valid and binding obligations of Company and each Borrower, enforceable
against Company and each Borrower in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability.

          7.6       INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 4 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date,

                                        7


in which case they were true, correct and complete in all material respects on
and as of such earlier date.

          7.7       ABSENCE OF DEFAULT. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.

SECTION 8.     MISCELLANEOUS

          8.1       REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS.

                    (i) On and after the First Amendment Effective Date, each
     reference in the Credit Agreement to "this Agreement", "hereunder",
     "hereof", "herein" or words of like import referring to the Credit
     Agreement, and each reference in the other Loan Documents to the "Credit
     Agreement", "thereunder", "thereof" or words of like import referring to
     the Credit Agreement shall mean and be a reference to the Amended
     Agreement.

                    (ii) Except as specifically amended by this Amendment, the
     Credit Agreement and the other Loan Documents shall remain in full force
     and effect and are hereby ratified and confirmed.

                    (iii) The execution, delivery and performance of this
     Amendment shall not, except as expressly provided herein, constitute a
     waiver of any provision of, or operate as a waiver of any right, power or
     remedy of Administrative Agent, Collateral Agent or any other Agent or any
     Lender under, the Credit Agreement or any of the other Loan Documents.

          8.2       FEES AND EXPENSES. Company acknowledges that all costs, fees
and expenses as described in subsection 10.3 of the Credit Agreement incurred by
Administrative Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of the
Domestic Borrowers.

          8.3       HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.

          8.4       APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

          8.5       COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of

                                        8


which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment (other than the provisions of Section 1, 2, 3,
4 and 5 hereof, the effectiveness of which is governed by Section 6 hereof)
shall become effective upon the execution of a counterpart hereof by Company,
each Borrower and Requisite Lenders and receipt by Company and Administrative
Agent of written or telephonic notification of such execution and authorization
of delivery thereof. Delivery of an executed counterpart of a signature page of
this amendment by telecopy shall be effective as delivery of a manually executed
counterpart of this Amendment.

                  [Remainder of page intentionally left blank]

                                        9


               IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.

COMPANY:                        OWENS-ILLINOIS GROUP, INC.

                                By:              /s/ JAMES W. BAEHREN
                                   -------------------------------------------
                                Name:            James W. Baehren
                                      -----------------------------------------
                                Title:           Vice President
                                      -----------------------------------------

BORROWERS:                      OWENS-BROCKWAY GLASS CONTAINER INC.

                                By:              /s/ JAMES W. BAEHREN
                                   -------------------------------------------
                                Name:            James W. Baehren
                                      ----------------------------------------
                                Title:           Vice President
                                      ----------------------------------------

                                OI GENERAL FTS INC.

                                By:              /s/ JAMES W. BAEHREN
                                   -------------------------------------------
                                Name:            James W. Baehren
                                      ----------------------------------------
                                Title:           Vice President
                                      ----------------------------------------

                                OI PLASTIC PRODUCTS FTS INC.

                                By:              /s/ JAMES W. BAEHREN
                                   -------------------------------------------
                                Name:            James W. Baehren
                                      ----------------------------------------
                                Title:           Vice President
                                      ----------------------------------------

                                OI CLOSURE FTS INC.

                                By:              /s/ JAMES W. BAEHREN
                                   -------------------------------------------
                                Name:            James W. Baehren
                                      ----------------------------------------
                                Title:           Vice President
                                      -----------------------------------------

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

                                       S-1


                                UNITED GLASS LIMITED

                                By:              /s/ JAMES W. BAEHREN
                                   -------------------------------------------
                                Name:            James W. Baehren
                                      ----------------------------------------
                                Title:           By Power of Attorney
                                      ----------------------------------------

                                UNITED GLASS GROUP LIMITED

                                By:              /s/ JAMES W. BAEHREN
                                   -------------------------------------------
                                Name:            James W. Baehren
                                      ----------------------------------------
                                Title:           By Power of Attorney
                                      ----------------------------------------

                                OWENS-ILLINOIS (AUSTRALIA) PTY LIMITED

                                By:              /s/ JAMES W. BAEHREN
                                   -------------------------------------------
                                Name:            James W. Baehren
                                      ----------------------------------------
                                Title:           By Power of Attorney
                                      ----------------------------------------

                                OI ITALIA S.R.L.

                                By:              /s/ JAMES W. BAEHREN
                                   -------------------------------------------
                                Name:            James W. Baehren
                                      ----------------------------------------
                                Title:           By Power of Attorney
                                      ----------------------------------------

                                ACI OPERATIONS PTY LIMITED

                                By:              /s/ JAMES W. BAEHREN
                                   -------------------------------------------
                                Name:            James W. Baehren
                                      ----------------------------------------
                                Title:           By Power of Attorney
                                      ----------------------------------------

                                AZIENDE VETRARIE INDUSTRIALI RICCIARDI S.P.A.

                                By:              /s/ JAMES W. BAEHREN
                                   -------------------------------------------
                                Name:            James W. Baehren
                                      ----------------------------------------
                                Title:           By Power of Attorney
                                      ----------------------------------------

                                       S-2


               ADMINISTRATIVE AGENT, COLLATERAL AGENT AND LENDERS:

                                BANKERS TRUST COMPANY,
                                INDIVIDUALLY AND AS ADMINISTRATIVE AGENT AND
                                COLLATERAL AGENT

                                By:         /s/ MARY JO JOLLY
                                    ------------------------------------------
                                    Name:   Mary Jo Jolly
                                    Title:  Assistant Vice President

                                       S-3


                                    ------------------------------------------

                                    By:
                                        --------------------------------------
                                          Name:
                                          Title:

EX-4.16

                                                                Exhibit 4.16

                               FIRST AMENDMENT TO
                             INTERCREDITOR AGREEMENT
                          DATED AS OF JANUARY 24, 2002

          This FIRST AMENDMENT TO INTERCREDITOR AGREEMENT (this "AMENDMENT") is
dated as of January 24, 2002 among BANKERS TRUST COMPANY ("BANKERS"), as
administrative agent (the "LENDER AGENT") for the lenders (the "LENDERS") party
to the Credit Agreement (as hereinafter defined), and BANKERS TRUST COMPANY, as
Collateral Agent, is made pursuant to Section 9(b) of that certain Intercreditor
Agreement by and among the foregoing parties dated as of April 23, 2001 (the
"INTERCREDITOR AGREEMENT"). Initially capitalized terms used herein without
definition are defined in the Intercreditor Agreement, and, if not defined
herein or in the Intercreditor Agreement, as defined in the Credit Agreement (as
hereinafter defined).

                                    RECITALS

          WHEREAS, the Lenders have entered into a Secured Credit Agreement
dated as of April 23, 2001 (the "SECURED CREDIT AGREEMENT"), as amended by that
certain First Amendment to Secured Credit Agreement and Consent dated as of
December 31, 2001 (the "FIRST AMENDMENT AND CONSENT") with certain subsidiaries
of Company and Packaging as Borrowers and with Company as guarantor pursuant to
Section 9 thereof and Owens-Illinois General, Inc., as Borrowers' Agent (the
Secured Credit Agreement, as so amended and as more particularly defined in the
Intercreditor Agreement, is referred to herein as the "CREDIT AGREEMENT");

          WHEREAS, the Credit Agreement permits Indebtedness from time to time
issued constituting New Senior Debt to be secured by the Domestic Collateral
under the Domestic Collateral Documents and permits such Indebtedness to
constitute "Senior Secured Obligations" under the Intercreditor Agreement,
provided that the holders of any such issue of New Senior Debt cause their New
Senior Debt Representative to execute and deliver to the Collateral Agent an
acknowledgment to the Intercreditor Agreement agreeing to be bound by the terms
thereof (which acknowledgment must be acknowledged by the Borrower's Agent);

          WHEREAS, concurrently herewith, Owens Brockway is issuing certain 8
7/8% Senior Secured Notes due 2009 in the aggregate principal amount of
$1,000,000,000 (together with any subsequent issuance of notes consituting the
same series of notes as the 8 7/8% Senior Secured Notes due 2009 pursuant to the
same indenture on substantially identical terms the Net Debt Securities Proceeds
of which are applied to repay the Term Loans pursuant to Section 2.4A(ii)(e) of
the Credit Agreement or as otherwise required thereby, in each case together
with any guarantees thereof and any notes and guarantees issued in exchange
therefor or replacement thereof containing substantially identical terms, the
"NEW 2002 SENIOR NOTES") which New 2002 Senior Notes constitute New Senior Debt
(subject, with respect to any subsequent issuance of notes (but not any exchange
notes) described above, to Administrative Agent's determination in its
reasonable judgment that the terms and conditions of such notes are
substantially comparable to those prevailing in the market place for comparable
debt issuances) and desires to have such New 2002 Senior Notes constitute Senior
Secured Obligations under the Intercreditor Agreement and to secure the
obligations in respect of such New 2002 Senior Notes by certain of the

                                        1


Domestic Collateral;

          WHEREAS, in order to facilitate the issuance of the New 2002 Senior
Notes, Owens Brockway has obtained, pursuant to the First Amendment and Consent,
the consent of the Requisite Lenders and the Requisite Obligees, as applicable,
to the Collateral Agent's and Lender Agent's amendment of the Collateral
Documents to eliminate or defer the provision of certain Domestic Collateral as
security for the New 2002 Senior Notes, which Domestic Collateral would
otherwise secure the obligations in respect of such New 2002 Senior Notes upon
their issuance and the execution of a counterpart to the Intercreditor Agreement
by the New Senior Debt Representative and Borrower's Agent and the application
of the Net Debt Securities Proceeds arising from the issuance of the New 2002
Senior Notes to repay the Term Loans pursuant to Section 2.4A(ii)(e) of the
Credit Agreement, and to the Collateral Agent's and the Lender Agent's amendment
of the Intercreditor Agreement to account for such exclusion or deferral of such
Domestic Collateral as security for the New 2002 Senior Notes; and

          WHEREAS, the parties desire to amend the Intercreditor Agreement as
set forth herein to implement the provisions of the First Amendment and Consent.

          NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:

                                    SECTION 1
                      AMENDMENTS TO INTERCREDITOR AGREEMENT

1.1  RECITALS.

     (a)  Recital 8 of the Intercreditor Agreement is hereby amended by adding
          the words "and the Domestic Borrowers' Guaranty" after the words
          "Credit Agreement" in clause (b) thereof and by adding the words "of
          certain Domestic Borrowers under the Credit Agreement and the Domestic
          Borrowers' Guaranty and" after the word "obligations" in clause (c)
          thereof.

     (b)  Recital 11 of the Intercreditor Agreement is hereby amended by adding
          the words "and the documents and instruments evidencing or relating to
          any such Other Permitted Credit Exposure are referred to herein as the
          "OTHER PERMITTED CREDIT EXPOSURE DOCUMENTS" at the end of the third
          sentence thereof.

     (c)  Recital 13 of the Intercreditor Agreement is hereby amended by adding
          the phrase ", any Domestic Borrower" after the second use of the word
          "Packaging" therein and by adding the phrase "acting in such capacity
          for the benefit of the holders of New Senior Debt" after the use of
          the phrase "New Senior Debt" in the definition of "New Senior Debt
          Representative" therein.

     (d)  Clause (a) of Recital 18 of the Intercreditor Agreement is hereby
          amended to read in its entirety as follows: "The Lender Agent and any
          Other Permitted Credit Exposure Holders secured by the Collateral
          Documents,".

                                       2


1.2  APPOINTMENT AS COLLATERAL AGENT. Section 1 of the Intercreditor Agreement
     is hereby amended by deleting the words "and each Other Permitted Credit
     Exposure Holder listed on the signature pages hereof each" after the first
     use of the words "Lender Agent" therein and by adding the the words "Other
     Permitted Credit Exposure Holder," after the first use of the words
     "Interest Rate Exchanger".

1.3  REQUISITE OBLIGEES.

     (a)  The heading of Section 2 of the Intercreditor Agreement is hereby
          amended by replacing the phrase "Other Permitted Credit Exposure
          Guaranties" therein with the phrase "Other Permitted Credit Exposure
          Documents".

     (b)  Section 2(a)(i) of the Intercreditor Agreement is hereby amended by
          adding the words "this Agreement, including" after the first use of
          the words "for purposes of" therein.

     (c)  Section 2(a)(ii)(1)(C) of the Intercreditor Agreement is hereby
          amended to read in its entirety: "(C) in the case of the Collateral
          Documents only (and NOT the Loan Guaranties) the aggregate ---
          outstanding principal amount of the New Senior Debt (to the extent
          such New Senior Debt is then secured by the Domestic Collateral under
          the Collateral Documents), PROVIDED, THAT, the --------- ----
          aggregate principal amount of the New 2002 Senior Notes shall not be
          included in such calculation with respect to any direction to the
          Collateral Agent solely to the extent such direction (a) takes place
          (or is requested) prior to April 1, 2002 and relates to the Pledged
          Collateral (as defined in the Pledge Agreement) under the Pledge
          Agreement, (b) relates to the Excluded Pledged Collateral (as defined
          in the First Amendment to Pledge Agreement of even date herewith), or
          (c) relates to the Excluded Securities Collateral (as defined in the
          First Amendment to Security Agreement of even date herewith), until
          indefeasible payment in full in cash of all Other Permitted Credit
          Exposure secured by the Domestic Collateral, Interest Rate
          Obligations, the Currency Obligations, and all New Senior Debt secured
          by the Domestic Collateral under the Collateral Documents,"

     (d)  Section 2(f) of the Intercreditor Agreement is hereby amended to read
          as follows: "Subject to the application of proceeds pursuant to
          SECTION 3 or SECTION 4, as applicable, Collateral Agent may release
          the Lien of the Collateral Documents against any portion of the
          Domestic Collateral that is the subject of a sale, transfer or other
          disposition permitted by the Credit Agreement, made in connection with
          the Collateral Agent's exercise of remedies under the Domestic
          Collateral Documents or otherwise to the extent approved by the
          Requisite Obligees, including, without limitation, against any portion
          of the Domestic Collateral pledged by a Domestic Borrower or
          Subsidiary Guarantor under the Security Agreement or a Mortgage upon
          the sale, transfer or other disposition of all of the Capital Stock of
          and intercompany indebtedness owing by or to such Domestic Borrower or
          Subsidiary Guarantor or the direct or indirect parent thereof as
          permitted by the Credit Agreement or in connection with the Collateral
          Agent's exercise of remedies under the Collateral Documents. In
          addition,

                                        3


          notwithstanding anything to the contrary in any of the Collateral
          Documents, upon release of a guarantor of any New Senior Debt, the
          Lien of the Collateral Documents against any assets or property of
          that guarantor shall no longer secure such New Senior Debt."

1.4  APPLICATION OF PROCEEDS OF SECURITY, LOAN GUARANTY PAYMENTS.

     (a)  Clause "SECOND" of Section 3(a)(i) of the Intercreditor Agreement is
          hereby amended by striking the words "PROVIDED that" and adding the
          following in their place: "PROVIDED, THAT, (a) until April 1, 2002, no
          Proceeds of Domestic Collateral arising from the sale, collection from
          or other realization upon all or any part of the Pledged Collateral
          and (b) no Proceeds of Domestic Collateral arising from the sale,
          collection from or other realization upon all or any part of the
          Excluded Pledged Collateral shall be applied toward payment of
          obligations in respect of the New 2002 Senior Notes (and in each case
          neither the holders of nor representatives for such New 2002 Senior
          Notes shall be entitled to any increased portion of any Proceeds of
          any other Collateral due to such exclusions); PROVIDED, FURTHER, THAT,
          so long as the New Senior Debt Representative for the New 2002 Senior
          Notes has executed and delivered a counterpart or acknowledgment to
          the Intercreditor Agreement acknowledged by Pledgors or Borrowers'
          Agent, then on April 1, 2002, without any further action by the
          Pledgors or Borrowers' Agent, the New Senior Debt Representative or
          any other party to the Pledge Agreement, the Credit Agreement or
          hereto, the exclusion set forth in clause (a), above, shall no longer
          apply; PROVIDED, YET, FURTHER, THAT,".

     (b)  Clause "SECOND" of Section 3(a)(ii) of the Intercreditor Agreement is
          hereby amended by striking the words "PROVIDED that" and adding the
          following in their place: "PROVIDED, THAT, no Proceeds of Domestic
          Collateral arising from the sale, collection from or other realization
          upon all or any part of the Excluded Securities Collateral shall be
          applied toward payment of obligations in respect of the New 2002
          Senior Notes (and neither the holders of nor representatives for such
          New 2002 Senior Notes shall be entitled to any increased portion of
          any Proceeds of any other Collateral due to such exclusion); PROVIDED,
          FURTHER, THAT,".

1.5  ALLOCATION OF PROCEEDS FROM ASSET SALES AND NET INSURANCE CONDEMNATION
     PROCEEDS OF DOMESTIC COLLATERAL, AND NET DEBT SECURITIES PROCEEDS FROM
     RECEIVABLES SALE INDEBTEDNESS.

     (a)  The first sentence of Section 4(a) of the Intercreditor Agreement is
          hereby amended by adding the following to the end thereof: "PROVIDED,
          HOWEVER, Net Asset Sale Proceeds arising from any Excluded Pledged
          Collateral or Excluded Securities Collateral or, until April 1, 2002,
          Pledged Collateral shall in no event be applied to the repayment of
          obligations in respect of the New 2002 Senior Notes (and neither the
          holders nor representatives of such New 2002 Senior Notes shall be
          entitled to any increased portion of any Net Asset Sale Proceeds of
          any other Collateral due to such exclusion)."

                                        4


     (b)  The second sentence of Section 4(b) of the Intercreditor Agreement is
          hereby amended to read as follows: "Any such payments received by the
          Collateral Agent directly or pursuant to this SECTION 4(B) shall be
          distributed to the relevant parties, including, if applicable, the New
          Senior Debt Representatives in accordance with Section 4(a) and in the
          manner provided in SECTION 3(C)."

1.6  INFORMATION. Section 5(d) of the Intercreditor Agreement is hereby amended
     to read in its entirety as follows:

          "Each Other Permitted Credit Exposure Holder benefiting from the Loan
     Guaranties and Other Permitted Credit Exposure Documents benefited by this
     Agreement, by executing this Agreement or signing an acknowledgment to this
     Agreement, as the case may be, agrees to promptly from time to time notify
     the Collateral Agent of (i) the aggregate amount of principal and interest
     outstanding with respect to the Other Permitted Credit Exposure to which
     such Other Permitted Credit Exposure Documents relate, whether such amounts
     are fully guarantied by the Loan Guaranties and the amount, if any, then
     due and payable under such Loan Guaranties in respect of such Other
     Permitted Credit Exposure, as at such date as the Collateral Agent may
     specify and (ii) any payment received by such Other Permitted Credit
     Exposure Holder to be applied to the principal of or interest on the
     amounts due with respect to the Other Permitted Credit Exposure and the
     Loan Guaranties. The Other Permitted Credit Exposure Holder shall certify
     as to such amounts and the Collateral Agent shall be entitled to rely
     conclusively upon such certification."

1.7  DISCLAIMERS, INDEMNITY, ETC. Section 7(a) of the Intercreditor Agreement is
     hereby amended by replacing the phrase "Other Permitted Credit Exposure
     Guaranties" therein with the phrase "Other Permitted Credit Exposure
     Documents".

1.8  MISCELLANEOUS. Section 9(b) of the Intercreditor Agreement is hereby
     amended by adding the following to the end thereof: "Notwithstanding
     anything to the contrary contained herein or in the Pledge Agreement, the
     Security Agreement or any Mortgage, neither the written consent of the New
     Senior Debt Representatives nor the holders of any New Senior Debt shall be
     required with respect to amendments, modifications or waivers of this
     Agreement, and the New Senior Debt Representatives and the holders of any
     New Senior Debt authorize the Collateral Agent to make such amendments,
     modifications or waivers to the Collateral Documents (without further
     consent of the New Senior Debt Representatives or the holders of any New
     Senior Debt), and to take such actions, in each case necessary (i) to
     designate Second Priority Secured Obligations, including guarantees
     thereof, as Senior Secured Obligations and to designate the holders of such
     Second Priority Secured Obligations, including guarantees thereof, or the
     representatives thereof as Senior Secured Parties and (ii) to secure Second
     Priority Secured Obligations, including any guarantees thereof, by all
     Domestic Collateral on the same (or lesser) basis as the Obligations under
     the Credit Agreement, including without limitation any amendments,
     modifications or waivers for the purpose of adding appropriate references
     to the holders of such obligations or the representatives thereof in, and
     according such parties the benefits of the provisions hereof or thereof,
     insofar as such amendments,

                                        5


     modifications or waivers set forth in (i) and (ii) above are not prohibited
     by the New Senior Debt Documents governing the New Senior Debt."

                                    SECTION 2
                                  MISCELLANEOUS

2.1  REFERENCE TO AND EFFECT ON THE INTERCREDITOR AGREEMENT.

     (a)  On and after the date hereof, each reference in the Intercreditor
          Agreement to "this Agreement", "hereunder", "hereof", "herein" or
          words of like import referring to the Intercreditor Agreement, and
          each reference in the other Loan Documents to the "Intercreditor
          Agreement", "thereunder", "thereof" or words of like import referring
          to the Intercreditor Agreement shall mean and be a reference to the
          Intercreditor Agreement as amended hereby.

     (b)  Except as specifically amended by this Amendment, the Intercreditor
          Agreement shall remain in full force and effect and is hereby ratified
          and confirmed.

2.2  HEADINGS. Section and subsection headings in this Amendment are included
     herein for convenience of reference only and shall not constitute a part of
     this Amendment for any other purpose or be given any substantive effect.

2.3  SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and inure to
     the benefit of the Collateral Agent, each Secured Party and their
     respective successors and assigns.

2.4  COUNTERPARTS. This Amendment may be executed in any number of counterparts,
     all of which taken together shall constitute one and the same instrument,
     and any of the parties hereto may execute this Agreement by signing any
     such counterpart.

2.5  GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
     ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                            [SIGNATURES ON NEXT PAGE]

                                        6


     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.

COLLATERAL AGENT:               BANKERS TRUST COMPANY,
                                as Collateral Agent

                                By:        /s/ MARY JO JOLLY
                                   ----------------------------------
                                Name:      MARY JO JOLLY
                                     --------------------------------
                                Title:     ASSISTANT VICE PRESIDENT
                                      -------------------------------

LENDER AGENT:                   BANKERS TRUST COMPANY,
                                as Lender Agent for the Lenders

                                By:        /s/ MARY JO JOLLY
                                   ----------------------------------
                                Name:      MARY JO JOLLY
                                     --------------------------------
                                Title:     ASSISTANT VICE PRESIDENT
                                      -------------------------------

                                        1


     EACH OF THE UNDERSIGNED ENTITIES, by its execution of this Amendment in the
space provided below, HEREBY ACKNOWLEDGES AND AGREES to the provisions of the
Intercreditor Agreement, as amended by this Amendment.

                                ON BEHALF OF EACH ENTITY NAMED ON THE ATTACHED
                                EXHIBIT A, IN THE CAPACITY SET FORTH FOR SUCH
                                ENTITY ON SUCH EXHIBIT A

                                By:        /s/ JEFFREY A. DENKER
                                    ---------------------------------
                                               Jeffrey A. Denker

                                        2


                                    EXHIBIT A
                                       TO
                             INTERCREDITOR AGREEMENT

                                                   TITLE OF OFFICER EXECUTING ON
           NAME OF ENTITY                            BEHALF OF SUCH ENTITY
           --------------                          --------------------------

Owens-Illinois Group, Inc.                         Assistant Treasurer

Owens-Brockway Glass Container Inc.                Treasurer

OI General FTS Inc.                                Treasurer

OI Plastic Products FTS Inc.                       Treasurer

O-I Health Care Holding Corp.                      Treasurer

OI General Finance Inc.                            Treasurer

Specialty Packaging Licensing Company              Treasurer

Owens-Illinois Closure Inc.                        Treasurer

Product Design & Engineering, Inc.                 Treasurer

OI Brazil Closure Inc.                             Treasurer

Owens-Illinois Prescription Products Inc.          Treasurer

OI Medical Inc.                                    Treasurer

MARC Industries, Inc.                              Treasurer

OI Medical Holdings Inc.                           Treasurer

Anamed International, Inc.                         Treasurer

Martell Medical Products, Incorporated             Treasurer

Owens-BriGam Medical Company                       Treasurer of each general
                                                    partner

BriGam, Inc.                                       Treasurer

BriGam Medical, Inc.                               Treasurer


                                        3


                                                   TITLE OF OFFICER EXECUTING ON
              NAME OF ENTITY                         BEHALF OF SUCH ENTITY
              --------------                       --------------------------

BriGam Ventures, Inc.                              Treasurer

Owens-Brockway Plastic Products Inc.               Treasurer

Owens-Illinois Specialty Products Puerto
Rico, Inc.                                         Treasurer

OI Regioplast STS Inc.                             Treasurer

OI Australia Inc.                                  Treasurer

ACI America Holdings Inc.                          Treasurer

Continental PET Technologies, Inc.                 Treasurer

OI Venezuela Plastic Products Inc.                 Treasurer

OI Castalia STS Inc.                               Treasurer

OI Levis Park STS Inc.                             Treasurer

OI AID STS Inc.                                    Treasurer

Owens-Illinois General Inc.                        Treasurer

O-I Holding Company, Inc.                          Treasurer

Universal Materials, Inc.                          Treasurer

Owens-Brockway Packaging, Inc.                     Treasurer

Brockway Realty Corporation                        Treasurer

Brockway Research, Inc.                            Treasurer

NHW Auburn, LLC                                    Treasurer of its
                                                   sole member

OI Auburn Inc.                                     Treasurer

SeaGate, Inc.                                      Treasurer

SeaGate II, Inc.                                   Treasurer

SeaGate III, Inc.                                  Treasurer

Owens-Brockway Glass Container Trading
Company                                            Treasurer


                                       4


                                                   TITLE OF OFFICER EXECUTING ON
              NAME OF ENTITY                         BEHALF OF SUCH ENTITY
              --------------                       --------------------------

OB Cal South Inc.                                  Treasurer

Overseas Finance Company                           Treasurer

OIB Produvisa Inc.                                 Treasurer

OI Consol STS Inc.                                 Treasurer

OI California Containers Inc.                      Treasurer

OI Puerto Rico STS Inc.                            Treasurer

OI Ecuador STS Inc.                                Treasurer

OI Europe & Asia Inc.                              Treasurer

OI Peru STS Inc.                                   Treasurer

OI Poland Inc.                                     Treasurer

OI Hungary Inc.                                    Treasurer

OI International Holdings Inc.                     Treasurer

                                       5

EX-4.18

 
                                                                    EXHIBIT 4.18

                                 FIRST AMENDMENT
                               TO PLEDGE AGREEMENT
                          DATED AS OF JANUARY 24, 2002

          This FIRST AMENDMENT TO PLEDGE AGREEMENT (this "AMENDMENT") is dated
as of January 24, 2002 and entered into by and among OWENS-ILLINOIS GROUP, INC.,
a Delaware corporation ("COMPANY"), OWENS- BROCKWAY PACKAGING INC., a Delaware
corporation ("PACKAGING"), and BANKERS TRUST COMPANY, as Collateral Agent for
and representative of the Lenders, the Interest Rate Exchangers, the Currency
Exchangers, the Existing Senior Note Trustees, the Other Permitted Credit
Exposure Holders, the New Senior Debt Representatives, the Refinancing Senior
Debt Representatives and the New Junior Debt Representatives (in such capacity
herein called the "COLLATERAL AGENT") and BANKERS TRUST COMPANY, as
administrative agent (the "LENDER AGENT") for the lenders party to the Credit
Agreement (as defined below) and is made with reference to that certain Pledge
Agreement dated as of April 23, 2001 (the "PLEDGE AGREEMENT"), by and among the
foregoing parties. Capitalized terms used herein without definition shall have
the same meanings herein as set forth in the Pledge Agreement, and, if not
defined herein or in the Pledge Agreement, as defined in the Credit Agreement
(as defined below).

                                    RECITALS

          WHEREAS, the Lenders have entered into a Secured Credit Agreement
dated as of April 23, 2001 (the "SECURED CREDIT AGREEMENT"), as amended by that
certain First Amendment to Secured Credit Agreement and Consent dated as of
December 31, 2001 (the "FIRST AMENDMENT AND CONSENT") with certain subsidiaries
of Company and Packaging as Borrowers and with Company as guarantor pursuant to
Section 9 thereof and Owens-Illinois General, Inc., as Borrowers' Agent (the
Secured Credit Agreement, as so amended and as more particularly defined in the
Pledge Agreement, is referred to herein as the "CREDIT AGREEMENT"). In addition,
in connection therewith, Packaging entered into a Subsidiary Guaranty of all
Obligations as defined in and now or hereafter existing under or in respect of
the Credit Agreement.

          WHEREAS, the Credit Agreement permits Indebtedness from time to time
issued constituting New Senior Debt to be secured by the Domestic Collateral (as
defined in the Intercreditor Agreement) under the Domestic Collateral Documents,
including the Pledge Agreement;

          WHEREAS, concurrently herewith, Owens Brockway is issuing certain 8
7/8% Senior Secured Notes due 2009 in the aggregate principal amount of
$1,000,000,000 (together with any subsequent issuance of notes consituting the
same series of notes as the 8 7/8% Senior Secured Notes due 2009 pursuant to the
same indenture on substantially identical terms the Net Debt Securities Proceeds
of which are applied to repay the Term Loans pursuant to Section 2.4A(ii)(e) of
the Credit Agreement or as otherwise required thereby, in each case together
with any guarantees thereof and any notes and guarantees issued in exchange
therefor or replacement thereof containing substantially identical terms, the
"NEW 2002 SENIOR NOTES") which New 2002 Senior Notes constitute New Senior Debt
(subject, with respect to any subsequent issuance of

                                        1



notes (but not any exchange notes) described above, to Administrative Agent's
determination in its reasonable judgment that the terms and conditions of such
notes are substantially comparable to those prevailing in the market place for
comparable debt issuances) and desires to have such New 2002 Senior Notes
constitute Senior Secured Obligations under the Intercreditor Agreement and to
secure the obligations in respect of such New 2002 Senior Notes by certain of
the Domestic Collateral;

          WHEREAS, in order to facilitate the issuance of the New 2002 Senior
Notes, Owens Brockway has obtained, pursuant to the First Amendment and Consent,
the consent of the Requisite Lenders and Requisite Obligees, as applicable, to
the Collateral Agent's and Lender Agent's amendment of the Pledge Agreement to
eliminate or defer the provision of certain of the Pledged Collateral as
security for the New 2002 Senior Notes, which Pledged Collateral would otherwise
secure the obligations in respect of such New 2002 Senior Notes upon their
issuance and the execution of a counterpart to the Intercreditor Agreement by
the New Senior Debt Representative and Borrowers' Agent and the application of
the Net Debt Securities Proceeds arising from the issuance of the New 2002
Senior Notes to repay the Term Loans pursuant to Section 2.4A(ii)(e) of the
Credit Agreement; and

          WHEREAS, the parties desire to amend the Pledge Agreement as set forth
herein to implement the provisions of the First Amendment and Consent.

                                    AGREEMENT

          NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:

                                   SECTION 1.
                         AMENDMENTS TO PLEDGE AGREEMENT

     1.1 RECITALS.

     (a) Recital 6 of the Pledge Agreement is hereby amended by (i) adding the
following after the words "Company and/or Packaging" and "Company or Packaging"
in the first and second sentences of such recital: "or Domestic Borrowers and/or
the other Subsidiary Guarantors", and (ii) adding the phrase "acting in such
capacity for the benefit of the holders of New Senior Debt" after the words "New
Senior Debt" in the last sentence thereof.

     (b) Recital 11 of the Pledge Agreement is hereby amended by adding the
following proviso to the end of such recital: "PROVIDED, THAT, notwithstanding
any such execution and delivery of a counterpart or acknowledgement to the
Intercreditor Agreement by any New Senior Debt Representative for the New 2002
Senior Notes acknowledged by Pledgors or Borrower's Agent, neither such New
Senior Debt Representative nor the holders of the New 2002 Senior Notes shall be
entitled to the benefits of this Agreement until April 1, 2002; and provided,
further, that, so long as the New Senior Debt Representative for the New 2002
Senior Notes has executed and delivered a counterpart or acknowledgment to the
Intercreditor Agreement acknowledged by Pledgors or Borrowers' Agent, then on
April 1, 2002, without any further action by the Pledgors or Borrowers' Agent,
the New Senior Debt Representative or any other party hereto or to the
Intercreditor Agreement or to the Credit Agreement, the New Senior Debt

                                        2



Representative and the holders of the New 2002 Senior Notes shall automatically
be entitled to the benefits of this Agreement."

     1.2 SENIOR PLEDGE. Section 1.1A of the Pledge Agreement is hereby amended
by adding the following parenthetical after the words "Senior Secured Parties":
"(subject to Section 2.1 below with respect to the New 2002 Senior Notes)".

     1.3 SENIOR SECURED OBLIGATIONS. Section 2.1 of the Pledge Agreement is
hereby amended by adding the following after the words "as applicable":
"PROVIDED, FURTHER, THAT, notwithstanding any such execution and delivery of a
counterpart or acknowledgement to the Intercreditor Agreement by any holder of,
or New Senior Debt Representative with respect to, the New 2002 Senior Notes
acknowledged by Pledgors or Borrowers' Agent, the pledge made and security
interest granted in SECTION 1 and the other provisions of this Agreement shall
not be effective as to any obligations in respect of such New 2002 Senior Notes
until April 1, 2002; PROVIDED, FURTHER, THAT, so long as the New Senior Debt
Representative for the New 2002 Senior Notes has executed and delivered a
counterpart or acknowledgment to the Intercreditor Agreement acknowledged by
Pledgors or Borrowers' Agent, then on April 1, 2002, without any further action
by the Pledgors or Borrowers' Agent, the New Senior Debt Representative or any
other party hereto or to the Intercreditor Agreement or to the Credit Agreement,
the New Senior Debt Representative and the holders of the New 2002 Senior Notes
shall automatically be entitled to the benefits of this Agreement; and PROVIDED,
YET, FURTHER, that in no event (whether before or after April 1, 2002 and
notwithstanding any execution and delivery of a counterpart or acknowledgement
to the Intercreditor Agreement) shall the pledge made and security interest
granted in SECTION 1 by Company in the Company Pledged Collateral issued by or
owing from O-1 General FTS (including, for the avoidance of doubt, any
documents, instruments, or certificates evidencing the same and any proceeds of
such Company Pledged Collateral) (the "EXCLUDED PLEDGED COLLATERAL") secure
obligations in respect of the New 2002 Senior Notes and such Excluded Pledged
Collateral shall not be held by Collateral Agent for the benefit of any holder
of, or New Senior Debt Representative with respect to, the New 2002 Senior
Notes."

     1.4 REMEDIES UPON DEFAULT. The second sentence of Section 11.1(a) of the
Pledge Agreement is hereby amended by adding the following to the end thereof:
"(the foregoing limitation, however, shall not apply to Collateral Agent acting
in such capacity)".

     1.5 APPLICATION OF PROCEEDS. Clause "SECOND" of Section 12 of the Pledge
Agreement is hereby amended by striking the words "PROVIDED that" and adding the
following in their place: "PROVIDED, THAT, no Proceeds arising from the sale,
collection from or other realization upon all or any part of the Excluded
Pledged Collateral shall be applied toward payment of obligations in respect of
the New 2002 Senior Notes (and neither the holders of nor any New Senior Debt
Representative for such New 2002 Senior Notes shall be entitled to any increased
portion of any Proceeds of any other Collateral due to such exclusion);
PROVIDED, FURTHER, THAT,".

     1.6 CONTINUING SECURITY INTEREST. The second sentence of Section 20 of the
Pledge Agreement is hereby deleted in its entirety and replaced with the
following:

                                        3


     "Without limiting the generality of the foregoing clause (iii), (A) but
subject to the provisions of SUBSECTION 10.2 of the Credit Agreement, any Lender
may assign or otherwise transfer any Loans held by it to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to Lenders as Secured Parties herein or otherwise, (B) any
Interest Rate Exchanger or Currency Exchanger may assign or otherwise transfer
any Interest Rate Agreement or Currency Agreement to which it is a party to any
other Lender or Affiliate of a Lender in accordance with the terms of such
Interest Rate Agreement or Currency Agreement, and such other permitted assignee
shall thereupon become vested with all the benefits in respect thereof granted
to Interest Rate Exchangers and/or Currency Exchanger as Secured Parties herein
or otherwise, (C) any Other Permitted Credit Exposure Holder may assign or
otherwise transfer any Other Permitted Credit Exposure to any other Lender or
Affiliate of Lender in accordance with the applicable Other Permitted Credit
Exposure Documents and such other permitted assignee shall thereupon become
vested with all the benefits in respect thereof granted to such Other Permitted
Credit Exposure Holder as a Secured Party herein or otherwise and (D) any holder
of any Existing Senior Notes, New Senior Debt, Refinancing Senior Debt or New
Junior Debt may assign or otherwise transfer any Existing Senior Notes, New
Senior Debt, Refinaincing Senior Debt or New Junior Debt to any other Person in
accordance with the applicable Existing Senior Note Indentures, New Senior Debt
Documents, Refinancing Senior Debt Documents or New Junior Debt Documents and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to such holder (or its representative) as a Secured Party herein
or otherwise."

     1.7 GOVERNING LAW; TERMS. The reference to "Section 5-1402" in Section 21
of the Pledge Agreement is hereby amended to read "Section 5-1401".

                                   SECTION 2.
                           CONDITIONS TO EFFECTIVENESS

     2.1 This Amendment shall become effective only upon the satisfaction of all
of the following conditions precedent (the date of satisfaction of such
conditions being referred to herein as the "FIRST AMENDMENT EFFECTIVE DATE"):

         (a) On or before the First Amendment Effective Date, Company and
Packaging shall deliver to Administrative Agent sufficient originally executed
copies, where appropriate, for each Lender and its counsel the following, each,
unless otherwise noted, dated the First Amendment Effective Date:

             (i) Resolutions of its Board of Directors approving and authorizing
the execution, delivery, and performance of this Amendment, certified as of the
First Amendment Effective Date by its corporate secretary or an assistant
secretary as being in full force and effect without modification or amendment;

             (ii) Signature and incumbency certificates of its officers
executing this Amendment; and

             (iii) Executed copies of this Amendment.

                                        4


         (b) On or before the First Amendment Effective Date, all corporate and
other proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel
shall be satisfactory in form and substance to Administrative Agent and such
counsel, and Administrative Agent and such counsel shall have received all such
counterpart originals or certified copies of such documents as Administrative
Agent may reasonably request.

                                   SECTION 3.
                         REPRESENTATIONS AND WARRANTIES

     In order to induce Collateral Agent and Lender's Agent to enter into this
Amendment and to amend the Pledge Agreement in the manner provided herein,
Company and Packaging each represents and warrants to Collateral Agent, Lender
Agent and each Secured Party that the following statements are true, correct and
complete:

     3.1 CORPORATE POWER AND AUTHORITY. Each of Company and Packaging has all
requisite corporate power and authority to enter into this Amendment and to
carry out the transactions contemplated by, and perform its obligations under,
the Pledge Agreement as amended by this Amendment (the "AMENDED AGREEMENT").

     3.2 AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment and the performance of the Amended Agreement have been duly authorized
by all necessary corporate action on the part of Company and Packaging.

     3.3 NO CONFLICT. The execution and delivery by Company and Packaging of
this Amendment and the performance by Company and Packaging of the Amended
Agreement do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to Company or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of Company
or any of its Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on Company or any of its Subsidiaries, (ii)
conflict with, result in a material breach of or constitute (with due notice or
lapse of time or both) a material default under any Contractual Obligation of
Company or any of its Subsidiaries, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Company or any of
its Subsidiaries (other than Liens in favor of the Collateral Agent), or (iv)
require any approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of Company or any of its Subsidiaries, other
than those approvals and consents which have been obtained.

     3.4 GOVERNMENTAL CONSENTS. The execution and delivery by Company and
Packaging of this Amendment and the performance by Company and Packaging of the
Amended Agreement do not and will not require any registration with, consent or
approval of, or notice to, or other action to, with or by, any federal, state or
other governmental authority or regulatory body, except for filings, consents or
notices that have been or will be made or obtained during the period in which
they are required to be obtained or made.

                                        5


     3.5 BINDING OBLIGATION. This Amendment and the Amended Agreement have been
duly executed and delivered by Company and Packaging and are the legally valid
and binding obligations of Company and Packaging, enforceable against Company
and Packaging in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.

     3.6 INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM PLEDGE AGREEMENT.
The representations and warranties contained in Section 4 of the Pledge
Agreement are and will be true, correct and complete in all material respects on
and as of the First Amendment Effective Date to the same extent as though made
on and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.

     3.7 ABSENCE OF DEFAULT. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
that would constitute an Event of Default or a Potential Event of Default.

                                    SECTION 4.
                                  MISCELLANEOUS

     4.1 REFERENCE TO AND EFFECT ON THE PLEDGE AGREEMENT AND THE OTHER LOAN
DOCUMENTS.

         (a) On and after the First Amendment Effective Date, each reference in
the Pledge Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of like import referring to the Pledge Agreement, and each reference in
the other Loan Documents to the "Pledge Agreement", "thereunder", "thereof" or
words of like import referring to the Pledge Agreement shall mean and be a
reference to the Amended Agreement.

         (b) Except as specifically amended by this Amendment, the Pledge
Agreement and the other Loan Documents shall remain in full force and effect and
are hereby ratified and confirmed.

         (c) The execution, delivery and performance of this Amendment shall
not, except as expressly provided herein, constitute a waiver of any provision
of, or operate as a waiver of any right, power or remedy of Collateral Agent or
Lender Agent or any other under the Pledge Agreement or any of the other Loan
Documents.

     4.2 HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.

     4.3 APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT
AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE

                                        6


CODE REQUIRES THAT THE PERFECTION OF THE SECURITY INTEREST UNDER THE PLEDGE
AGREEMENT, OR REMEDIES THEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.

     4.4 COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. Delivery of an executed counterpart of a signature page of
this amendment by telecopy shall be effective as delivery of a manually executed
counterpart of this Amendment.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                        7


          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.

COMPANY:                   OWENS-ILLINOIS GROUP, INC.

                           By:           /s/ James W.baehren
                              --------------------------------
                           Name:
                                ------------------------------
                           Title:
                                 -----------------------------

PACKAGING:                 OWENS-BROCKWAY PACKAGING, INC.

                           By:           /s/ James W.baehren
                              --------------------------------
                           Name:
                                ------------------------------
                           Title:
                                 -----------------------------

COLLATERAL AGENT           BANKERS TRUST COMPANY,
AND LENDER AGENT:          AS COLLATERAL AGENT AND LENDER AGENT

                           BY:           /s/ Mary Jo Jolly
                              --------------------------------
                                NAME:    Mary Jo Jolly
                                TITLE:   Assistant Vice President

EX-4.19

                                                                   EXHIBITS 4.19

                               SECURITY AGREEMENT

                           DATED AS OF APRIL 23, 2001
                                      AMONG

                           OWENS-ILLINOIS GROUP, INC.,

             O-I HEALTH CARE HOLDING CORP., OI GENERAL FINANCE INC.,
          OI CLOSURE FTS INC., SPECIALITY PACKAGING LICENSING COMPANY,
        OWENS-ILLINOIS CLOSURE INC., PRODUCT DESIGN & ENGINEERING, INC.,
              OI BRAZIL CLOSURE INC., OI PLASTIC PRODUCTS FTS INC.,
           OWENS-ILLINOIS PRESCRIPTION PRODUCTS INC., OI MEDICAL INC.,
           MARC INDUSTRIES, INC., ENTRACARE CORP., MARC MEDICAL, INC.,
             PRECISION MEDICAL MOLDING, INC., K & M PLASTICS, INC.,
          OI MEDICAL HOLDINGS INC., ANAMED INTERNATIONAL, INC., MARTELL
          MEDICAL PRODUCTS, INC., OWENS-BRIGAM MEDICAL COMPANY, BRIGAM,
        INC., BRIGAM MEDICAL, INC., BRIGAM VENTURES, INC., OWENS-BROCKWAY
        PLASTIC PRODUCTS, INC., OWENS-ILLINOIS SPECIALITY PRODUCTS PUERTO
       RICO, INC., OI REGIOPLAST STS INC., OI AUSTRALIA INC., ACI AMERICA
         HOLDINGS INC., CONTINENTAL PET TECHNOLOGIES, INC., OI VENEZUELA
      PLASTIC PRODUCTS INC., OI GENERAL FTS INC., OI CASTALIA STS INC., OI
      LEVIS PARK STS INC., OI AID STS INC., OWENS-ILLINOIS GENERAL INC., OI
        HOLDING COMPANY, INC., UNIVERSAL MATERIALS, INC., OWENS-BROCKWAY
         PACKAGING, INC., OWENS-BROCKWAY GLASS CONTAINER INC., BROCKWAY
        REALTY CORP., BROCKWAY RESEARCH, INC., NHW AUBURN LLC, OI AUBURN
    INC., SEAGATE, INC., SEAGATE II, INC., SEAGATE III, INC., OWENS-BROCKWAY
        GLASS CONTAINER TRADING CO., OB CAL SOUTH INC., OVERSEAS FINANCE
      CO., OIB PRODUVISA INC., OI CONSOL STS INC., OI CALIFORNIA CONTANERS
      INC., OI PUERTO RICO STS INC., OI ECUADOR STS INC., OI EUROPE & ASIA
         INC., OI PERU STS INC., OI POLAND INC., OI HUNGARY INC., AND OI
                           INTERNATIONAL HOLDINGS INC.

                               ADDITIONAL GRANTORS

                                       AND

                              BANKERS TRUST COMPANY



                               TABLE OF CONTENTS



                                                                                                  PAGE
                                                                                             
Section 1.    Grant of Security.....................................................................2
Section 2.    Security for Obligations..............................................................7
Section 3.    Grantors Remain Liable................................................................8
Section 4.    Representations and Warranties........................................................9
Section 5.    Further Assurances...................................................................10
Section 6.    Certain Covenants of Grantors........................................................11
Section 7.    Special Covenants With Respect to Equipment and Inventory............................12
Section 8.    Special Covenants with respect to Accounts and Related Contracts.....................12
Section 9.    Special Covenants With Respect to the Securities Collateral..........................13
Section 10.   Special Covenants With Respect to the Intellectual Property Collateral...............15
Section 11.   Omitted..............................................................................16
Section 12.   Collateral Accounts..................................................................16
Section 13.   Secured Party Appointed Attorney-in-Fact.............................................17
Section 14.   Collateral Agent May Perform.........................................................18
Section 15.   Standard of Care.....................................................................18
Section 16.   Remedies.............................................................................18
Section 17.   Additional Remedies for Intellectual Property Collateral.............................20
Section 18.   Application of Proceeds..............................................................21
Section 19.   Indemnity and Expenses...............................................................22
Section 20.   Continuing Security Interest; Transfer of Loans; Termination and Release.............23
Section 21.   Collateral Agent as Agent............................................................24
Section 22.   Additional Grantors..................................................................25
Section 23.   Amendments; Etc......................................................................25
Section 24.   Notices..............................................................................25
Section 25.   Failure or Indulgence Not Waiver; Remedies Cumulative................................25
Section 26.   Severability.........................................................................26
Section 27.   Headings.............................................................................26
Section 28.   Governing Law; Terms; Rules of Construction..........................................26
Section 29.   Consent to Jurisdiction and Service of Process.......................................26
Section 30.   Waiver of Jury Trial.................................................................27
Section 31.   Counterparts.........................................................................27


                                       -i-


                                    SCHEDULES

Schedule 1(e)(i) to Security Agreement

Schedule 1(e)(ii) to Security Agreement

Schedule 4(b) to Security Agreement

Schedule 4(d) to Security Agreement

Schedule 4(e) to Security Agreement

Schedule 4(i) to Security Agreement



                                    EXHIBITS

Exhibit I                      Form of Counterpart

Exhibit II                     Form of Grant of Copyright Security Interest

Exhibit III                    Form of Pledge Amendment



                               SECURITY AGREEMENT

          This SECURITY AGREEMENT (this "AGREEMENT") is dated as of April 23,
2001 and entered into by and among OWENS-ILLINOIS GROUP, INC., a Delaware
corporation ("COMPANY"), each of THE UNDERSIGNED DIRECT AND INDIRECT
SUBSIDIARIES of Company (each of such undersigned Subsidiaries being a
"SUBSIDIARY GRANTOR" and collectively "SUBSIDIARY GRANTORS") and each ADDITIONAL
GRANTOR that may become a party hereto after the date hereof in accordance with
SECTION 22 hereof (each of the Company, each Subsidiary Grantor, and each
Additional Grantor being a "GRANTOR" and collectively the "GRANTORS"), and
BANKERS TRUST COMPANY ("BANKERS"), as Collateral Agent for and representative of
the lenders ("LENDERS") party to the Credit Agreement referred to below, the
Interest Rate Exchangers (as hereinafter defined), the Currency Exchangers (as
hereinafter defined), the Other Permitted Credit Exposure Holders (as
hereinafter the defined) and the New Senior Debt Representatives (as hereinafter
defined).

                                    RECITALS

          1. The Lenders have entered into a Secured Credit Agreement of even
date herewith (as amended, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT") with certain subsidiaries of Company and
Packaging as Borrowers (the "BORROWERS"), and Company as a guarantor pursuant to
SECTION 9 thereof and Owens-Illinois General, Inc. as Borrowers' Agent.
Initially capitalized terms used herein without definition are defined in the
Credit Agreement.

          2. Each of the Domestic Borrowers have guaranteed (i) all Revolving
Loans made to, and related Obligations of, the other Domestic Borrowers; (ii)
all Offshore Loans made to, and all other Obligations of, the Offshore
Borrowers; (iii) the Other Lender Guaranteed Obligations, and (iv) OI Plastic
and OI Closure have guaranteed the Term Loans made to, and related Obligations
of, Owens Brockway and OI General FTS, all pursuant to a guaranty dated the date
hereof (the "DOMESTIC BORROWERS' GUARANTY").

          3. Subsidiary Grantors (other than the Borrowers) have executed and
delivered that certain Subsidiary Guaranty dated the date hereof (said
Subsidiary Guaranty, as amended, to the date hereof, and as it may hereafter be
further amended, restated, supplemented or otherwise modified from time to time,
being the "SUBSIDIARY GUARANTY") in favor of the Collateral Agent for the
benefit of the Lenders, the Other Permitted Credit Exposure Holders (defined
below) the Interest Rate Exchangers and the Currency Exchangers pursuant to
which each such Subsidiary Grantor has guarantied the prompt payment and
performance when due of all Obligations of Borrowers under the Credit Agreement,
as well as certain Interest Rate Obligations and Currency Obligations.

          4. It is contemplated that, from time to time Subsidiaries of Company
may incur obligations to Lenders or affiliates of Lenders arising out of loans,
advances, overdrafts, interest rate, currency or hedge products and other
derivative exposures or extensions of credit to the extent permitted under the
Credit Agreement ("OTHER PERMITTED CREDIT EXPOSURE") in favor of the holders
thereof (each, an "OTHER PERMITTED CREDIT EXPOSURE HOLDER" and,



collectively, "OTHER PERMITTED CREDIT EXPOSURE HOLDERS"). The documents and
instruments evidencing or relating to any such Other Permitted Credit Exposure
are referred to as the "OTHER PERMITTED CREDIT EXPOSURE DOCUMENTS."

          5. It is contemplated that, from time to time to the extent permitted
by the Credit Agreement, Grantors may issue or guaranty certain New Senior Debt.
Any indenture, debenture, note, guaranty or other document executed by a Grantor
in connection with the issuance of any such New Senior Debt is referred to
herein as a "NEW SENIOR DEBT DOCUMENT" individually and the "NEW SENIOR DEBT
DOCUMENTS" collectively. Any trustee or like representative of the holders of
any such New Senior Debt is referred to herein as a "NEW SENIOR DEBT
REPRESENTATIVE."

          6. It is contemplated that, from time to time, Grantors may assume
from Owens-Illinois, Inc., a Delaware corporation ("HOLDINGS"), or enter into
Interest Rate Agreements and/or Currency Agreements with one or more Lenders or
their respective affiliates (collectively, the "INTEREST RATE EXCHANGERS" or the
"CURRENCY EXCHANGERS," as the case may be and the obligations under such
agreements, including the obligation to make payments in the event of early
termination thereunder being the "INTEREST RATE OBLIGATIONS" or the "CURRENCY
OBLIGATIONS," as the case may be). The Collateral Agent, the Lenders, Other
Permitted Credit Exposure Holders, the Interest Rate Exchangers, the Currency
Exchangers and the holders of any New Senior Debt and the New Senior Debt
Representatives, collectively, are referred to herein as the "SECURED PARTIES".

          7. Concurrently herewith, the Collateral Agent and the current Other
Permitted Credit Exposure Holders have entered into an Intercreditor Agreement
(as amended, amended and restated or otherwise modified from time to time in
accordance with its terms, the "INTERCREDITOR AGREEMENT") which provides for,
INTER, ALIA, the appointment of the Collateral Agent to administer the
Collateral (defined below). Any New Senior Debt Representative and any holder of
New Senior Debt represented by such New Senior Debt Representative, Interest
Rate Exchanger, Currency Exchanger, and any future Other Permitted Credit
Exposure Holder shall only be entitled to the benefits of this Agreement, and
shall only be a Secured Party hereunder, if such Person has executed and
delivered to Collateral Agent a counterpart of the Intercreditor Agreement or an
acknowledgment to the Intercreditor Agreement (in the form attached thereto) and
the Borrowers' Agent has duly executed and delivered an acknowledgement to such
acknowledgement.

          8. It is a condition precedent to the initial extensions of credit by
Lenders under the Credit Agreement that Grantors listed on the signature pages
hereof shall have granted the security interests and undertaken the obligations
contemplated by this Agreement.

          NOW, THEREFORE, in consideration of the premises the parties hereto
agree as follows:

SECTION 1.    GRANT OF SECURITY.

          Each Grantor hereby assigns to Collateral Agent, and hereby grants to
Collateral Agent, for the ratable benefit of the Secured Parties a security
interest in all of such Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing,

                                        2


whether tangible or intangible, or in which such Grantor now has or hereafter
acquires an interest and wherever the same may be located, excluding, however,
any of the following constituting Pledged Collateral under the Pledge Agreement
(subject to such exclusion, the "COLLATERAL"):

          (a)  all equipment in all of its forms, all parts thereof and all
accessions thereto (any and all such equipment, parts and accessions being the
"EQUIPMENT");

          (b)  all inventory in all of its forms, including but not limited to
(i) all goods held by such Grantor for sale or lease or to be furnished under
contracts of service or so leased or furnished, (ii) all raw materials, work in
process, finished goods, and materials used or consumed in the manufacture,
packing, shipping, advertising, selling, leasing, furnishing or production of
such inventory or otherwise used or consumed in such Grantor's business, (iii)
all goods in which such Grantor has an interest in mass or a joint or other
interest or right of any kind, and (iv) all goods which are returned to or
repossessed by such Grantor and all accessions thereto and products thereof
(collectively the "INVENTORY") and all negotiable and non-negotiable documents
of title (including, without limitation, documents, warehouse receipts, dock
receipts and bills of lading) issued by any Person covering any Inventory (any
such negotiable document of title being a "NEGOTIABLE DOCUMENT OF TITLE");

          (c)  all accounts, contract rights, chattel paper, documents,
instruments, letter-of-credit rights and other rights and obligations of any
kind owned by or owing to such Grantor and all rights in, to and under all
security agreements, leases and other contracts securing or otherwise relating
to any such accounts, contract rights, chattel paper, documents, instruments,
letter-of-credit rights or other rights and obligations (any and all such
accounts, contract rights, chattel paper, documents, instruments,
letter-of-credit rights and other rights and obligations being the "ACCOUNTS",
and any and all such security agreements, leases and other contracts being the
"RELATED CONTRACTS");

          (d)  all deposit accounts, together with (i) all amounts on deposit
from time to time in such deposit accounts and (ii) all interest, cash,
instruments, securities and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing ("DEPOSIT ACCOUNTS");

          (e)  the "SECURITIES COLLATERAL", which term means:

               (i)  the shares of stock, partnership interests, interests in
     joint ventures, limited liability company interests and all other equity
     interests in a Person that is owned on the date hereof and described on
     SCHEDULE 1(e)(i) or, after the date hereof, becomes, a direct Subsidiary of
     such Grantor, solely to the extent such equity interests are required to be
     pledged pursuant to the Credit Agreement, including all securities
     convertible into, and rights, warrants, options and other rights to
     purchase or otherwise acquire, any of the foregoing now or hereafter owned
     by such Grantor, and the certificates or other instruments representing any
     of the foregoing and any interest of such Grantor in the entries on the
     books of any securities intermediary pertaining thereto, EXCLUDING,
     HOWEVER, (A) any of the foregoing with respect to Harbor Capital Advisors,
     Inc., HCA Securities, Inc. and Harbor Transfer, Inc. (collectively, the
     "HARBOR CAPITAL COMPANIES") and (B), in the case of Company and Packaging,
     any of the foregoing pledged thereby as Pledged Collateral pursuant to the
     Pledge Agreement, including,

                                        3


     without limitation, the Company Pledged Shares and the Packaging Pledged
     Shares (each as defined in the Pledge Agreement (subject to such
     exclusions, the "PLEDGED SHARES"), and all dividends, distributions,
     returns of capital, cash, warrants, options, rights, instruments, rights to
     vote or manage the business of such Person pursuant to organizational
     documents governing the rights and obligations of the stockholders,
     partners, members or other owners thereof and other property or proceeds
     from time to time received, receivable or otherwise distributed in respect
     of or in exchange for any or all of such Pledged Shares; provided, that if
     the issuer of any of such Pledged Shares is a controlled foreign
     corporation (used hereinafter as such term is defined in SECTION 957(a) or
     a successor provision of the Internal Revenue Code) (such Pledged Shares,
     are referred to herein as "FOREIGN PLEDGED SHARES"), notwithstanding
     anything herein to the contrary, in no event shall the Secured Parties be
     entitled to realize on, foreclose against or otherwise have recourse to
     Foreign Pledged Shares in excess of the number of shares or other equity
     interests of such issuer possessing up to but not exceeding 65% of the
     voting power of all classes of capital stock or other equity interests
     entitled to vote of such issuer, and all dividends, cash, warrants, rights,
     instruments and other property or proceeds from time to time received,
     receivable or otherwise distributed in respect of or in exchange for any or
     all of such Pledged Shares in connection with or on account of the
     satisfaction of any Domestic Obligations and such excess shares or other
     equity interests shall not be deemed to be Pledged Shares for purposes of
     the security pledged for the Domestic Obligations; PROVIDED, FURTHER,
     HOWEVER, that there shall be no limitations on the realization, foreclosure
     against or other recourse of the Secured Parties against the Foreign
     Pledged Stock in connection with or on account of the satisfaction of any
     Foreign Obligations. As used herein, "DOMESTIC OBLIGATIONS" means the
     obligations of the Domestic Borrowers consisting of Term Loans, Revolving
     Loans, Letters of Credit for the account of Domestic Borrowers, the
     Domestic Overdraft Agreement and any obligations of any other Loan Party
     under other Loan Documents which are not obligations of Offshore Borrowers
     or any Foreign Subsidiary, and "FOREIGN OBLIGATIONS" means the obligations
     of the Offshore Borrowers and their Foreign Subsidiaries consisting of
     Offshore Loans, Letters of Credit for the account of Offshore Borrowers,
     the Offshore Overdraft Agreements and any obligations under the other Loan
     Documents which are not obligations of Domestic Borrowers or any Subsidiary
     Guarantor;

               (ii) the indebtedness from time to time owed to such Grantor by
     any obligor that is, or becomes, a direct or indirect Subsidiary of such
     Grantor, or by any obligor of which such Grantor is a direct or indirect
     subsidiary, including the indebtedness described on SCHEDULE 1(e)(ii) and
     issued by the obligors named therein, and the instruments evidencing such
     indebtedness EXCLUDING, HOWEVER, (A) any such indebtedness owing to or from
     any of the Harbor Capital Companies and, (B) in the case of Company and
     Packaging, any of the foregoing pledged thereby as Pledged Collateral
     pursuant to the Pledge Agreement, including without limitation the Company
     Pledged Debt and the Packaging Pledged Debt (as defined in the Pledge
     Agreement) (subject to such exclusions, the "PLEDGED DEBT"), and all
     interest, cash, instruments and other property or proceeds from time to
     time received, receivable or otherwise distributed in respect of or in
     exchange for any or all of the Pledged Debt; and

                                        4


               (iii) all other investment property of such Grantor unless
     expressly excluded in CLAUSES (i) and (ii) above and provided that no other
     enforceable restrictions exist on the pledging or hypothecation thereof;

          (f)  the "INTELLECTUAL PROPERTY COLLATERAL", which term means:

               (i)  all rights, title and interest (including rights acquired
     pursuant to a license or otherwise) in and to all trademarks, service
     marks, designs, logos, indicia, tradenames, trade dress, corporate names,
     company names, business names, fictitious business names, trade styles
     and/or other source and/or business identifiers and applications pertaining
     thereto, owned by such Grantor, or hereafter adopted and used, in its
     business (collectively, the "TRADEMARKS"), all registrations that have been
     or may hereafter be issued or applied for thereon in the United States and
     any state thereof and in foreign countries (the "TRADEMARK REGISTRATIONS"),
     all common law and other rights in and to the Trademarks in the United
     States and any state thereof and in foreign countries (the "TRADEMARK
     RIGHTS"), and all goodwill of such Grantor's business symbolized by the
     Trademarks and associated therewith (the "ASSOCIATED GOODWILL"):

               (ii) all rights, title and interest (including rights acquired
     pursuant to a license or otherwise) in and to all patents and patent
     applications and rights and interests in patents and patent applications
     under any domestic or foreign law that are presently, or in the future may
     be, owned or held by such Grantor and all patents and patent applications
     and rights, title and interests in patents and patent applications under
     any domestic or foreign law that are presently, or in the future may be,
     owned by such Grantor in whole or in part all rights corresponding thereto
     (including, without limitation, the right, exercisable only upon the
     occurrence and during the continuation of an Event of Default, to sue for
     past, present and future infringements in the name of such Grantor or in
     the name of Collateral Agent or the Secured Parties), and all re-issues,
     divisions, continuations, renewals, extensions and continuations-in-part
     thereof (all of the foregoing being collectively referred to as the
     "PATENTS"); it being understood that the rights and interests included in
     the Intellectual Property Collateral hereby shall include, without
     limitation, all rights and interests pursuant to licensing or other
     contracts in favor of such Grantor pertaining to patent applications and
     patents presently or in the future owned or used by third parties but, in
     the case of third parties which are not Affiliates of such Grantor, only to
     the extent permitted by such licensing or other contracts and, if not so
     permitted, only with the consent of such third parties; and

               (iii) all rights, title and interest (including rights acquired
     pursuant to a license or otherwise) under copyrights in various published
     and unpublished works of authorship including, without limitation, computer
     programs, computer data bases, other computer software, layouts, trade
     dress, drawings, designs, writings, and formulas owned by such Grantor
     (collectively, the "COPYRIGHTS"), all copyright registrations issued to
     such Grantor and applications for copyright registration that have been or
     may hereafter be issued or applied for thereon by such Grantor in the
     United States and any state thereof and in foreign countries (including,
     without limitation, any registrations listed on Schedule 1(f)(iii))
     (collectively, the "COPYRIGHT REGISTRATIONS"), all common law and other
     rights in and to the Copyrights in the United States and any state thereof
     and in foreign countries including all copyright licenses (but with respect
     to such copyright

                                        5


     licenses, only to the extent permitted by such licensing arrangements) (the
     "COPYRIGHT RIGHTS"), including, without limitation, each of the Copyrights,
     rights, titles and interests in and to the Copyrights, all derivative works
     and other works protectable by copyright, which are presently, or in the
     future may be, owned, created (as a work for hire for the benefit of such
     Grantor), authored (as a work for hire for the benefit of such Grantor), or
     acquired by such Grantor, in whole or in part, and all Copyright Rights
     with respect thereto and all Copyright Registrations therefor, heretofore
     or hereafter granted or applied for, and all renewals and extensions
     thereof, throughout the world, including all proceeds thereof (such as, by
     way of example and not by limitation, license royalties and proceeds of
     infringement suits), the right to renew and extend such Copyright
     Registrations and Copyright Rights and to register works protectable by
     copyright and the right to sue for past, present and future infringements
     of the Copyrights and Copyright Rights;

          (g)  all information used or useful or arising from the business of
such Grantor including all goodwill, trade secrets, trade secret rights,
know-how, customer lists, processes of production, ideas, confidential business
information, techniques, processes, formulas, and all other proprietary
information;

          (h)  to the extent not included in any other paragraph of this SECTION
1, all general intangibles, including, without limitation, tax refunds, payment
intangibles, other rights to payment or performance, choses in action, software
and judgments taken on any rights or claims included in the Collateral;

          (i)  all plant fixtures, business fixtures and other fixtures and
storage and office facilities, and all accessions thereto and products thereof,
to the extent a part of, used in connection with, or appurtenant to a Mortgaged
Property;

          (j)  all books, records, ledger cards, files, correspondence, computer
programs, tapes, disks and related data processing software that at any time
evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon; and

          (k)  all proceeds, products, rents and profits of or from any and all
of the foregoing Collateral and, to the extent not otherwise included, all
payments under insurance (whether or not Collateral Agent or a Secured Party is
the loss payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "PROCEEDS" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.

          Notwithstanding anything herein to the contrary, in no event shall the
Collateral include, and no Grantor shall be deemed to have granted a security
interest in (i) any of such Grantor's rights or interests in any license,
contract or agreement to which such Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which such Grantor is a party or is bound (other than
to the extent that any such term would be rendered ineffective pursuant to the
Uniform Commercial Code, as it exists on the date of this Agreement

                                        6


or as it may hereafter be amended, in the State of New York (the "UCC") or any
other applicable law (including the Bankruptcy Code) or principles of equity);
PROVIDED, that immediately upon the ineffectiveness, lapse or termination of any
such provision, the Collateral shall include, and such Grantor shall be deemed
to have granted a security interest in, all such rights and interests as if such
provision had never been in effect, or (ii) any real property leasehold, unless
a Grantor has executed a leasehold mortgage or leasehold deed of trust covering
such real property leasehold.

          Each item of Collateral listed in this SECTION 1 that is defined in
Articles 8 or 9 of the UCC shall have the meaning set forth in the UCC, as it
exists on the date of this Agreement or as it may hereafter be amended, it being
the intention of the Grantors that the description of the Collateral set forth
above be construed to include the broadest possible range of assets, except for
assets expressly excluded as set forth above.

SECTION 2.     SECURITY FOR OBLIGATIONS.

          Subject to the limitations on the grant of the security interest with
respect to Foreign Pledged Shares in SECTION 1(e), this Agreement secures, and
the Collateral assigned by each Grantor is collateral security for, the prompt
payment or performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including without
limitation the payment of amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code), of all Secured
Obligations of such Grantor, provided that in no event shall more than 65% of
the Foreign Pledged Shares of any Person be security for or be assigned or
pledged on account of any Domestic Obligations. "SECURED OBLIGATIONS" means:

               (a)   all obligations and liabilities of every nature of:

               (i)   Company, now or hereafter existing under or arising out of
     or in connection with the Credit Agreement and the other Loan Documents and
     all obligations of Company under any New Senior Debt Documents;

               (ii)  each Domestic Borrower, now or hereafter existing under or
     arising out of or in connection with the Credit Agreement, the Domestic
     Borrowers' Guaranty and all obligations of each Domestic Borrower under any
     New Senior Debt Documents;

               (iii) each Subsidiary Guarantor, now or hereafter existing under
     or arising out of or in connection with the Subsidiary Guaranty and all
     obligations of each such Subsidiary Guarantor under any New Senior Debt
     Documents;

               (iv)  each Subsidiary of Company, now or hereafter existing under
     or arising out of or in connection with Other Permitted Credit Exposure and
     each Other Permitted Credit Exposure Document in each case held by any
     Lender or Affiliate of any Lender; and

                                        7


               (v)   Company and any Subsidiary of Company, now or hereafter
     existing under or arising out of or in connection with Interest Rate
     Obligations or Currency Obligations;

     in each case whether for principal, premium or interest (including, without
     limitation, interest which, but for the filing of a petition in a
     bankruptcy, reorganization or other similar proceeding with respect to a
     Grantor, would accrue on such obligations), payments for early termination,
     payments for settlement of amounts due under any such agreements, fees,
     indemnities, expenses or otherwise, whether voluntary or involuntary,
     direct or indirect, absolute or contingent, liquidated or unliquidated,
     whether or not jointly owed with others, and whether or not from time to
     time decreased or extinguished and later increased, created or incurred,
     and all or any portion of such obligations or liabilities that are paid, to
     the extent all or any part of such payment is avoided or recovered directly
     or indirectly from a Secured Party, any Lender, Interest Rate Exchanger,
     Currency Exchanger or Other Permitted Credit Exposure Holder as a
     preference, fraudulent transfer or otherwise, and all obligations of every
     nature of Grantors now or hereafter existing under this Agreement;
     PROVIDED, HOWEVER, that the pledge made and security interest granted in
     SECTION 1 and any other provisions of this Agreement shall be effective as
     to any obligations in respect of any Other Lender Guaranteed Obligations
     only if the holders of such obligations or their representatives (A) shall
     have executed and delivered to the Collateral Agent a counterpart of the
     Intercreditor Agreement or an acknowledgment to the Intercreditor Agreement
     (in the form attached thereto) and the Borrowers' Agent has duly executed
     and delivered an acknowledgement to such acknowledgement and (B) shall have
     released, in form and substance satisfactory to Collateral Agent and
     Borrowers' Agent, Holdings from any pre-existing guaranty obligations in
     connection with such Other Lender Guaranteed Obligations. For purposes of
     determining the amount of Secured Obligations relating to any obligation
     with respect to which a Person other than a Grantor is the direct or
     primary obligor and with respect to which a Grantor is a guarantor
     (including by way of providing security), the total amount of such Secured
     Obligations shall be calculated without duplication of the amount of such
     direct or primary obligation secured by the Collateral and the related
     guaranty obligations of the Grantor secured by the Collateral.

SECTION 3.     GRANTORS REMAIN LIABLE.

          Anything contained herein to the contrary notwithstanding, (a) each
Grantor shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Collateral Agent of any of its rights hereunder
shall not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) neither Collateral
Agent nor any Secured Party shall have any obligation or liability under any
contracts, licenses, and agreements included in the Collateral by reason of this
Agreement, nor shall Collateral Agent or any Secured Party be obligated to
perform any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder,
except to the extent Collateral Agent or Secured Party expressly assumes any
obligations thereunder.

                                        8


SECTION 4.     REPRESENTATIONS AND WARRANTIES.

     Each Grantor represents and warrants as follows:

          (a)  OWNERSHIP OF COLLATERAL. Except as expressly permitted by the
Credit Agreement and except for the security interest created by this Agreement,
such Grantor owns the Collateral owned by such Grantor free and clear of any
Lien. Except as expressly permitted by the Credit Agreement and except such as
may have been filed in favor of Secured Party relating to this Agreement, no
effective financing statement or other instrument similar in effect covering all
or any part of the Collateral is on file in any filing or recording office.

          (b)  LOCATIONS OF EQUIPMENT AND INVENTORY. Substantially all of the
Equipment and Inventory is, as of the date hereof, or in the case of an
Additional Grantor, the date of the applicable counterpart entered into pursuant
to SECTION 22 (each, a "COUNTERPART") located at the places specified in
SCHEDULE 4(b), except for Inventory which, in the ordinary course of business,
is in transit either (i) from a supplier to a Grantor, (ii) between the
locations specified in SCHEDULE 4(b), or (iii) to customers of a Grantor.

          (c)  OMITTED.

          (d)  OFFICE LOCATIONS; TYPE AND JURISDICTION OF ORGANIZATION. The
chief place of business, the chief executive office and the office where such
Grantor keeps its records regarding the Accounts and all originals of all
chattel paper that evidence Accounts are, as of the date hereof, and except as
set forth on Schedule 4(d), have been for the four month period preceding the
date hereof, or, in the case of an Additional Grantor, the date of the
applicable Counterpart, located at the locations set forth on SCHEDULE 4(d); the
type (i.e. corporation, limited partnership, etc.) and jurisdiction of
organization of such Grantor are listed  on SCHEDULE 4(d);

          (e)  NAMES. No Grantor (or predecessor by merger or otherwise of such
Grantor) has, within the four month period preceding the date hereof, or, in the
case of an Additional Grantor, the date of the applicable Counterpart, had a
different name from the name of such Grantor listed or the signature pages
hereof, except the names listed in SCHEDULE 4(e) annexed hereto. Each Grantor's
federal taxpayer identification number and corporate identification number is
set forth on SCHEDULE 4(e).

          (f)  DELIVERY OF CERTAIN COLLATERAL. Except as set forth on SCHEDULE
1(e)(i), All certificates or instruments (excluding checks) evidencing,
comprising or representing the Collateral constituting Pledged Shares (other
than uncertificated Pledged Shares) and Pledged Debt have been delivered to
Collateral Agent duly endorsed or accompanied by duly executed instruments of
transfer or assignment in blank. With respect to certificates described on
Schedule 1(e)(i) which have not been delivered because such certificates are not
readily removable from their jurisdiction of issuance, upon request by the
Collateral Agent such certificates shall be delivered by the applicable Grantor
to the Collateral Agent in the jurisdiction of issuance, duly endorsed or
accompanied by duly executed instruments of transfer or assignment in blank.

          (g)  SECURITIES COLLATERAL. (i) All of the Pledged Debt described on
SCHEDULE 1(e)(ii) has been duly authorized, authenticated or issued, and
delivered and is the

                                        9


legal, valid and binding obligation of the issuers thereof and is not in
default; (ii) except as set forth on SCHEDULE 1(e)(i), as of the date hereof,
the Pledged Shares constitute all of the issued and outstanding shares of stock
or other equity interests of each issuer thereof (subject to the proviso to
SECTION 1(e)(i) with respect to shares of a foreign controlled corporation) and
there are no outstanding warrants, options or other rights to purchase, or other
agreements outstanding with respect to, or property that is now or hereafter
convertible into, or that requires the issuance or sale of, any Pledged Shares
to any Person not a Grantor; (iii) the Pledged Debt constitutes all of the
issued and outstanding intercompany indebtedness evidenced by a promissory note
of the respective issuers thereof owing to such Grantor (subject to the proviso
to SECTION 1(e)(ii) with respect to debt pledged pursuant to the Pledge
Agreement); (iv) SCHEDULE 1(e)(i) sets forth all of the Pledged Shares in the
entities set forth thereon owned by each Grantor on the date hereof; and (v)
SCHEDULE 1(e)(ii) sets forth all of the Pledged Debt in existence on the date
hereof.

          (h)  PERFECTION. The security interests in the Collateral granted to
Collateral Agent for the ratable benefit of the Secured Parties hereunder
constitute valid security interests in the Collateral, securing the payment of
the Secured Obligations. Upon (i) the filing of UCC financing statements (other
than fixture filings) naming each Grantor as "debtor", naming Collateral Agent
as "secured party" for the benefit of the Secured Parties and describing the
Collateral in the filing offices with respect to such Grantor set forth on
SCHEDULE 4(i) (to the extent a security interest in such collateral can be
perfected by filing a financing statement in each relevant filing office under
the provisions of the applicable UCC) and (ii) in the case of the Pledged Shares
(other than uncertificated Pledged Shares constituting general intangibles) and
Pledged Debt, delivery of such Pledged Shares and Pledged Debt to Collateral
Agent, in each case duly endorsed or accompanied by duly executed instruments of
assignment or transfer in blank, and (iii) in the case of the Intellectual
Property Collateral consisting of Copyright Registrations, the filing of a Grant
of Copyright Security Interest, substantially in the form of Exhibit II, with
the United States Copyright Office (each such Grant of Copyright Security
Interest being referred to herein as a "GRANT"), the security interests in the
Collateral granted to Collateral Agent for the benefit of the Secured Parties
will constitute perfected First Priority security interests therein and all
filings (other than fixture filings) and other actions necessary or desirable to
perfect and protect such security interests have been duly made or taken.

SECTION 5.     FURTHER ASSURANCES.

          (a)  GENERALLY. Each Grantor agrees that from time to time, at the
expense of Grantors, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that Collateral Agent may request, in order to perfect and protect
any security interest granted or purported to be granted hereby or to enable
Collateral Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
each Grantor will: (i) execute and file such financing or continuation
statements, or amendments thereto, agreements establishing that Collateral Agent
has control of specified items of Collateral as required by this Agreement or
the Credit Agreement and such other instruments or notices, as may be necessary
or desirable, or as Collateral Agent may request, in order to perfect and
preserve the security interests granted or purported to be granted hereby, (ii)
furnish to Collateral Agent from time to time statements and schedules further
identifying and describing the Collateral as required herein and such other
reports in connection with the Collateral as

                                       10


Collateral Agent may reasonably request, all in reasonable detail, (iii) at any
reasonable time, upon request by Collateral Agent, exhibit the Collateral to and
allow inspection of the Collateral by Collateral Agent, or persons designated by
Collateral Agent, (iv) at Collateral Agent's request, appear in and defend any
action or proceeding that may affect such Grantor's title to or Collateral
Agent's security interest in all or any material part of the Collateral, and (v)
use commercially reasonable efforts to obtain any necessary consents of third
parties to the assignment and perfection of a security interest to Collateral
Agent with respect to any material Collateral, except with respect to Permitted
Encumbrances. Each Grantor hereby authorizes Collateral Agent to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of any Grantor. Each
Grantor agrees that a carbon, photographic or other reproduction of this
Agreement or of a financing statement signed by such Grantor shall be sufficient
as a financing statement and may be filed as a financing statement in any and
all jurisdictions.

          (b)  SECURITIES COLLATERAL. Without limiting the generality of the
foregoing SECTION 5(a), each Grantor agrees that it will, upon obtaining any
additional shares of stock or other securities consisting of Pledged Shares or
Pledged Debt required to be pledged hereunder, promptly (and in any event within
five Business Days) deliver to Collateral Agent a Pledge Amendment, duly
executed by such Grantor, in substantially the form of Exhibit III (a "PLEDGE
AMENDMENT"), in respect of the additional Pledged Shares or Pledged Debt to be
pledged pursuant to this Agreement. Upon each delivery of a Pledge Amendment to
Collateral Agent, the representations and warranties contained in CLAUSES
(i)-(iii) of SECTION 4(g) hereof shall be deemed to have been made by such
Grantor as to the Securities Collateral described in such Pledge Amendment as of
the date thereof. Each Grantor hereby authorizes Collateral Agent to attach each
Pledge Amendment to this Agreement and agrees that all Pledged Shares or Pledged
Debt of such Grantor listed on any Pledge Amendment shall for all purposes
hereunder be considered Collateral of such Grantor; provided, the failure of any
Grantor to execute a Pledge Amendment with respect to any additional Pledged
Shares or Pledged Debt pledged pursuant to this Agreement shall not impair the
security interest of Secured Party therein or otherwise adversely affect the
rights and remedies of Collateral Agent hereunder with respect thereto.

SECTION 6.     CERTAIN COVENANTS OF GRANTORS.

     Each Grantor shall:

          (a)  not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral where
such use or violation would have a Material Adverse Effect;

          (b)  notify Collateral Agent of any change in such Grantor's name,
identity or corporate structure within 30 days of such change;

          (c)  give Collateral Agent 30 days' prior written notice of any change
in such Grantor's chief place of business, chief executive office or residence
or the office where such Grantor keeps its records regarding the Accounts and
all originals of all chattel paper that evidence Accounts or a reincorporation,
reorganization or other action that results in a change of the jurisdiction of
organization of such Grantor;

                                       11


SECTION 7.     SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND INVENTORY.

     Each Grantor shall keep substantially all of the Equipment and Inventory
owned by such Grantor at the places therefor specified on SCHEDULE 4(b) or, upon
30 days' prior written notice to Collateral Agent, at such other places in
jurisdictions where all action that may be necessary or desirable, or that
Collateral Agent may request, in order to perfect and protect any security
interest granted or purported to be granted hereby, or to enable Collateral
Agent to exercise and enforce its rights and remedies hereunder, with respect to
such Equipment and Inventory shall have been taken;

SECTION 8.     SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS AND RELATED CONTRACTS.

          (a)  Each Grantor shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the locations therefor set forth on SCHEDULE 4(d), upon 30
days' prior written notice to Collateral Agent, at such other location in a
jurisdiction where all action that may be necessary or desirable, or that
Collateral Agent may request, in order to perfect and protect any security
interest granted or purported to be granted hereby, or to enable Collateral
Agent to exercise and enforce its rights and remedies hereunder, with respect to
such Accounts and Related Contracts shall have been taken.

          (b)  Except as otherwise provided in this SUBSECTION (b), each Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor under the Accounts and Related Contracts. In connection with
such collections, each Grantor may take (and, upon the occurrence and during the
continuance of an Event of Default at Collateral Agent's direction, shall take)
such action as such Grantor may deem necessary or advisable to enforce
collection of amounts due or to become due under the Accounts; PROVIDED,
HOWEVER, that Collateral Agent shall have the right at any time, upon the
occurrence and during the continuation of an Event of Default and upon written
notice to such Grantor of its intention to do so, to notify the account debtors
or obligors under any Accounts of the assignment of such Accounts to Collateral
Agent and to direct such account debtors or obligors to make payment of all
amounts due or to become due to such Grantor thereunder directly to Collateral
Agent, to notify each Person maintaining a lockbox or similar arrangement to
which account debtors or obligors under any Accounts have been directed to make
payment to remit all amounts representing collections on checks and other
payment items from time to time sent to or deposited in such lockbox or other
arrangement directly to Collateral Agent and, upon such notification and at the
expense of Grantors, to enforce collection of any such Accounts and to adjust,
settle or compromise the amount or payment thereof, in the same manner and to
the same extent as such Grantor might have done. After receipt by such Grantor
of the notice from Collateral Agent referred to in the proviso to the preceding
sentence and for so long as such Event of Default continues, (i) all amounts and
proceeds (including checks and other instruments) received by such Grantor in
respect of the Accounts and the Related Contracts shall be received in trust for
the benefit of Collateral Agent hereunder, shall be segregated from other funds
of such Grantor and shall be forthwith paid over or delivered to Collateral
Agent in the same form as so received (with any necessary endorsement) to be
held as cash Collateral and applied as provided by SECTION 18, and (ii) except
in the ordinary course of business consistent with past practice, such Grantor
shall not adjust, settle or compromise the amount or payment of

                                       12


any Account, or release wholly or partly any account debtor or obligor thereof,
or allow any credit or discount thereon.

SECTION 9.     SPECIAL COVENANTS WITH RESPECT TO THE SECURITIES COLLATERAL.

          (a)  DELIVERY. Each Grantor agrees that all certificates or
instruments representing or evidencing the Pledged Shares (except as otherwise
contemplated by SECTION 4(f)) and the Pledged Debt shall be delivered to and
held by or on behalf of Collateral Agent pursuant hereto and shall be in
suitable form for transfer by delivery or, as applicable, shall be accompanied
by such Grantor's endorsement, where necessary, or duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
Collateral Agent. Collateral Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Shares or Pledged
Debt for certificates or instruments of smaller or larger denominations.

          (b)  COVENANTS. Each Grantor shall (i) except for any merger or
consolidation, which constitutes a, sale, transfer or other disposition
permitted by the Credit Agreement, pledge hereunder all the outstanding capital
stock or other equity interests of the surviving or resulting person in any
merger or consolidation involving securities pledged hereunder, (ii) cause each
issuer of Pledged Shares not to issue any stock, other equity interests or other
securities in addition to or in substitution for the Pledged Shares issued by
such issuer, except to such Grantor or as otherwise permitted under the Credit
Agreement; (iii) pledge hereunder, in accordance with subsection 5.9 of the
Credit Agreement, any and all additional shares of stock, other equity interests
or other securities of each issuer of Pledged Shares; (iv) pledge hereunder,
promptly upon its acquisition (directly or indirectly) thereof, any and all
shares of stock or other equity interests of any Person that, after the date of
this Agreement, becomes, as a result of any occurrence, a direct Subsidiary of
such Grantor, to the extent required by subsection 5.9 of the Credit Agreement,
subject to the limitation on Foreign Pledged Shares; (v) pledge hereunder,
promptly upon their issuance, any and all instruments or other evidences of
additional indebtedness from time to time owed to such Grantor by any obligor on
the Pledged Debt; (vi) pledge hereunder, promptly upon their issuance, any and
all instruments or other evidences of indebtedness which constitutes Pledged
Debt from time to time owed to such Grantor by any Person that after the date of
this Agreement becomes, as a result of any occurrence, a direct or indirect
Subsidiary of such Grantor; PROVIDED, that the foregoing covenant shall exclude
any such instruments or evidences of indebtedness issued by any of the Harbor
Capital Companies or any such instruments or evidences of indebtedness required
to be pledged under the Pledge Agreement; (vii) promptly deliver to Collateral
Agent all material written notices received by it with respect to the Securities
Collateral; and (viii) at the request of Collateral Agent, promptly execute and
deliver to Collateral Agent an agreement providing for the control, as that term
is defined in the UCC, by Collateral Agent of all securities entitlements and
securities accounts of such Grantor not otherwise subject to Permitted
Encumbrances and provided that no other enforceable restrictions exist on the
pledging or the hypothecation thereof.

          (c)  VOTING AND DISTRIBUTIONS. So long as no Event of Default shall
have occurred and be continuing, (i) each Grantor shall be entitled to exercise
any and all voting and other consensual rights pertaining to the Securities
Collateral or any part thereof for any purpose not inconsistent with the terms
of this Agreement or the Credit Agreement; and (ii) each Grantor shall be
entitled to receive and retain, and to utilize free and clear of the lien of
this Agreement,

                                       13


any and all dividends, other distributions and interest paid in respect of the
Securities Collateral; provided, any and all (A) dividends, distributions and
interest paid or payable other than in cash in respect of, and instruments and
other property received, receivable or otherwise distributed in respect of, or
in exchange for, any Securities Collateral, and (B) dividends and other
distributions paid or payable in cash in respect of any Securities Collateral in
connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in-surplus, forthwith be
delivered to Collateral Agent to hold as, Securities Collateral and shall, if
received by such Grantor, be received in trust for the benefit of Collateral
Agent, be segregated from the other property or funds of such Grantor and be
forthwith delivered to Collateral Agent as Securities Collateral in the same
form as so received (with all necessary endorsements).

               Upon the occurrence and during the continuation of an Event of
Default, (x) upon written notice from Collateral Agent to any Grantor, all
rights of such Grantor to exercise the voting and other consensual rights which
it would otherwise be entitled to exercise pursuant hereto shall cease, and all
such rights shall thereupon become vested in Collateral Agent who shall
thereupon have the sole right to exercise such voting and other consensual
rights during the continuation of such Event of Default; (y) all rights of such
Grantor to receive the dividends, other distributions and interest payments
which it would otherwise be authorized to receive and retain pursuant hereto
shall cease, and all such rights shall thereupon become vested in Collateral
Agent who shall thereupon have the sole right to receive and hold as Securities
Collateral such dividends, other distributions and interest payments during the
continuation of such Event of Default, provided that nothing herein shall
restrict or limit the right of a Grantor to directly or indirectly make or
receive dividends, distributions, principal or interest payments for the purpose
of making such amounts available to Company to make Holdings Ordinary Course
Payments permitted to be paid pursuant to SUBSECTION 6.5 of the Credit
Agreement; and (z) all dividends, principal, interest payments and other
distributions which are received by such Grantor contrary to the provisions of
clause (ii) of the immediately preceding paragraph or clause (y) above shall be
received in trust for the benefit of Collateral Agent, shall be segregated from
other funds of such Grantor and shall forthwith be paid over to Collateral Agent
as Securities Collateral in the same form as so received (with any necessary
endorsements).

               In order to permit Collateral Agent to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant hereto and
to receive all dividends and other distributions which it may be entitled to
receive hereunder, (I) upon the occurrence and during the existence of an Event
of Default, each Grantor shall promptly execute and deliver (or cause to be
executed and delivered) to Collateral Agent all such proxies, dividend payment
orders and other instruments as Collateral Agent may from time to time
reasonably request, and (II) without limiting the effect of CLAUSE (I) above,
each Grantor hereby grants to Collateral Agent an irrevocable proxy to vote the
Pledged Shares and to exercise all other rights, powers, privileges and remedies
to which a holder of the Pledged Shares would be entitled (including giving or
withholding written consents of shareholders or other holders of equity
interests, calling special meetings of shareholders or other holders of equity
interests and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of
any Pledged Shares on the record books of the issuer thereof) by any other
Person (including the issuer of the Pledged Shares or any officer or agent
thereof), upon the occurrence and during the existence of an Event of Default
and which proxy shall only terminate upon the

                                       14


payment in full of the Secured Obligations and the termination of the related
agreements and the cancellation of any outstanding Letters of Credit or the cure
of the Event of Default.

SECTION 10.    SPECIAL COVENANTS WITH RESPECT TO THE INTELLECTUAL PROPERTY
               COLLATERAL.

          (a)  Except as otherwise provided in this SECTION 10, each Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor in respect of the Intellectual Property Collateral or any
portion thereof. In connection with such collections, each Grantor may take
(and, after the occurrence and during the continuance of any Event of Default at
Collateral Agent's reasonable direction, shall take) such action as such Grantor
or Collateral Agent may deem reasonably necessary or advisable to enforce
collection of such amounts; provided, Collateral Agent shall have the right at
any time, upon the occurrence and during the continuation of an Event of Default
and upon written notice to such Grantor of its intention to do so, to notify the
obligors with respect to any such amounts of the existence of the security
interest created hereby and to direct such obligors to make payment of all such
amounts directly to Collateral Agent, and, upon such notification and at the
expense of such Grantor, to enforce collection of any such amounts and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Grantor might have done. After receipt by any
Grantor of the notice from Collateral Agent referred to in the proviso to the
preceding sentence and during the continuation of any Event of Default, (i) all
amounts and proceeds (including checks and other instruments) received by each
Grantor in respect of amounts due to such Grantor in respect of the Intellectual
Property Collateral or any portion thereof shall be received in trust for the
benefit of Collateral Agent hereunder, shall be segregated from other funds of
such Grantor and shall be forthwith paid over or delivered to Collateral Agent
in the same form as so received (with any necessary endorsement) to be held as
cash Collateral and applied as provided by SECTION 18, and (ii) such Grantor
shall not, without the consent of the Collateral Agent, adjust, settle or
compromise the amount or payment of any such amount or release wholly or partly
any obligor with respect thereto or allow any credit or discount thereon.

          (b)  In addition to, and not by way of limitation of, the granting of
a security interest in the Collateral pursuant hereto, each Grantor, effective
upon the occurrence and during the continuation of an Event of Default (but only
to the extent to do so would not breach a contract existing on the date hereof
and binding on such Grantor), hereby assigns, transfers and conveys to
Collateral Agent the nonexclusive right and license to use all trademarks,
tradenames, copyrights, patents or technical processes (including, without
limitation, the Intellectual Property Collateral) owned or used by such Grantor
that relate to the Collateral and any other collateral granted by such Grantor
as security for the Secured Obligations, together with any goodwill associated
therewith, all to the extent necessary to enable Collateral Agent to realize on
the Collateral in accordance with this Agreement and to enable any transferee or
assignee of the Collateral to enjoy the benefits of the Collateral. This right
shall inure to the benefit of all successors, assigns and transferees of
Collateral Agent and its successors, assigns and transferees, whether by
voluntary conveyance, operation of law, assignment, transfer, foreclosure, deed
in lieu of foreclosure or otherwise. Such right and license shall be granted
free of charge, without requirement that any monetary payment whatsoever be made
to such Grantor. If and to the extent that any Grantor licenses the Intellectual
Property Collateral, upon such

                                       15


Grantor's request and provided no Event of Default then exists, Collateral Agent
shall promptly enter into a non-disturbance agreement or other similar
arrangement, at such Grantor's request and expense, with such Grantor and any
licensee of any Intellectual Property Collateral permitted hereunder in form and
substance reasonably satisfactory to Collateral Agent pursuant to which (i)
Collateral Agent shall agree not to disturb or interfere with such licensee's
rights under its license agreement with such Grantor so long as such licensee is
not in default thereunder, and (ii) such licensee shall acknowledge and agree
that the Intellectual Property Collateral licensed to it is subject to the
security interest created in favor of Collateral Agent and the other terms of
this Agreement.

SECTION 11.    OMITTED.

SECTION 12.    COLLATERAL ACCOUNTS.

          Collateral Agent is hereby authorized to establish and maintain at its
office at One Bankers Trust Plaza, New York, New York, two blocked accounts in
the name of the Grantors and under the sole dominion and control of Collateral
Agent, one, a restricted deposit account designated as "OI GRANTOR COLLATERAL
ACCOUNT" and the second, a restricted deposit account designated "OI L/C
COLLATERAL ACCOUNT". The "OI GRANTOR COLLATERAL ACCOUNT" is referred to herein
as the "GENERAL COLLATERAL ACCOUNT", the "OI L/C COLLATERAL ACCOUNT" is referred
to herein as the "L/C COLLATERAL ACCOUNT" and General Collateral Account and L/C
Collateral Account, collectively, are referred to herein as the "COLLATERAL
ACCOUNTS". All amounts at any time held in the Collateral Accounts shall be
beneficially owned by Grantors but shall be held in the name of Collateral Agent
hereunder, for the benefit of Secured Parties, as collateral security for the
Secured Obligations upon the terms and conditions set forth herein and as
provided in the Intercreditor Agreement. Grantors shall have no right to
withdraw, transfer or, except as expressly set forth herein or in SECTION 5.4b
of the Credit Agreement with respect to the General Collateral Account,
otherwise receive any funds deposited into the Collateral Accounts. Anything
contained herein to the contrary notwithstanding, the Collateral Accounts shall
be subject to such applicable laws, and such applicable regulations of the Board
of Governors of the Federal Reserve System and of any other appropriate banking
or Governmental Authority, as may now or hereafter be in effect. All deposits of
funds in the Collateral Accounts shall be made by wire transfer (or, if
applicable, by intra-bank transfer from another account of a Grantor) of
immediately available funds, in each case addressed in accordance with
instructions of Collateral Agent. Each Grantor shall, promptly after initiating
a transfer of funds to the Collateral Accounts, give notice to Collateral Agent
by telefacsimile of the date, amount and method of delivery of such deposit.
Cash held by Collateral Agent in the Collateral Accounts shall not be invested
by Collateral Agent but instead shall be maintained as a cash deposit in the
Collateral Accounts pending application thereof as elsewhere provided in this
Agreement. To the extent permitted under Regulation Q of the Board of Governors
of the Federal Reserve System, any cash held in the Collateral Accounts shall
bear interest at the standard rate paid by Collateral Agent to its customers for
deposits of like amounts and terms. Subject to Collateral Agent's rights
hereunder, any interest earned on deposits of cash in the Collateral Accounts
shall be deposited directly in, and held in the Collateral Accounts.

                                       16


SECTION 13.    SECURED PARTY APPOINTED ATTORNEY-IN-FACT.

          Each Grantor hereby irrevocably appoints Collateral Agent as such
Grantor's attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor, Collateral Agent or otherwise, from
time to time in Collateral Agent's discretion to take any action and to execute
any instrument that Collateral Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including without limitation:

          (a)  upon the occurrence and during the continuance of an Event of
Default, to obtain and adjust insurance required to be maintained by such
Grantor or paid to Collateral Agent pursuant to the Credit Agreement;

          (b)  upon the occurrence and during the continuance of an Event of
Default, to ask for, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;

          (c)  upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clauses (a) and (b) above;

          (d)  upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any proceedings that
Collateral Agent may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce the rights of Collateral Agent with
respect to any of the Collateral;

          (e)  upon the occurrence and during the continuance of an Event of
Default, to pay or discharge taxes or Liens (other than Liens permitted under
this Agreement or the Credit Agreement) levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by Collateral Agent in its sole
discretion, any such payments made by Collateral Agent to become obligations of
such Grantor to Collateral Agent, due and payable immediately without demand;

          (f)  upon the occurrence and during the continuance of an Event of
Default, to sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other documents
relating to the Collateral; and

          (g)  upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
Collateral Agent were the absolute owner thereof for all purposes, and to do, at
Collateral Agent's option and Grantors' expense, at any time or from time to
time, all acts and things that Collateral Agent deems necessary to protect,
preserve or realize upon the Collateral and Collateral Agent's security interest
therein in order to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.

                                       17


SECTION 14.    COLLATERAL AGENT MAY PERFORM.

          If any Grantor fails to perform any agreement contained herein, upon
the occurrence and during the continuance of an Event of Default, Collateral
Agent may itself perform, or cause performance of, such agreement, and the
expenses of Collateral Agent incurred in connection therewith shall be payable
by Grantors under SECTION 19(b).

SECTION 15.    STANDARD OF CARE.

          The powers conferred on Collateral Agent hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Collateral Agent shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. Collateral Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Collateral Agent accords its own
property.

SECTION 16.    REMEDIES.

          (a)  GENERALLY. If (i) any "Event of Default" under and as defined in
the Credit Agreement, or (ii) after such time as all Obligations shall have been
indefeasibly paid in full, and PROVIDED that the Collateral then secures the
payment and performance of any obligations under any New Senior Debt Documents,
any Other Permitted Credit Exposure Documents, any Interest Rate Obligations or
any Currency Obligations, if any event of default under (A) any Interest Rate
Agreement or Currency Agreement which is secured by Collateral, (B) any
obligations under any New Senior Debt Documents which are secured by Collateral,
or (C) any obligations under any Other Permitted Credit Exposure Documents which
are secured by Collateral, as the case may be (either such occurrence being an
"EVENT OF DEFAULT" for purposes of this Agreement) shall have occurred and be
continuing, Collateral Agent may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default under
the UCC (whether or not the UCC applies to the affected Collateral), and also
may (i) require each Grantor to, and each Grantor hereby agrees that it will at
its expense and upon request of Collateral Agent forthwith, assemble such of the
Collateral as may reasonably be assembled as directed by Collateral Agent and
make it available to Collateral Agent at a place or places to be designated by
Collateral Agent and reasonably convenient to both parties, (ii) enter onto the
property where any Collateral is located and take possession thereof with or
without judicial process, (iii) prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Collateral Agent deems
appropriate, (iv) take possession of any Grantor's premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of such Grantor's equipment for the purpose of completing any work in process,
taking any actions described in the preceding clause (iii) and collecting any
Secured Obligation, (v) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at Collateral Agent's offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as Collateral

                                       18


Agent may deem commercially reasonable, (vi) exercise dominion and control over
and refuse to permit further withdrawals from any Deposit Account maintained
with Collateral Agent or any Lender constituting a part of the Collateral and
(vii) without notice to any Grantor, transfer to or to register in the name of
Collateral Agent or any of its nominees any or all of the Securities Collateral.
The Collateral Agent or any other Secured Party may be the purchaser of any or
all of the Collateral at any such sale but shall not be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at such sale, to use and apply any of
the Secured Obligations owed to such Person as a credit on account of the
purchase price of any Collateral payable by such Person at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of any Grantor, and each Grantor hereby waives (to
the extent permitted by applicable law) all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted. Each Grantor agrees that,
to the extent notice of sale shall be required by law, at least ten days' notice
to such Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification.
Collateral Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Collateral Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. Each Grantor hereby waives any claims
against Collateral Agent arising by reason of the fact that the price at which
any Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Collateral Agent
accepts the first offer received and does not offer such Collateral to more than
one offeree. Each Grantor further agrees that a breach of any of the covenants
contained in this Section will cause irreparable injury to Collateral Agent,
that Collateral Agent has no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this Section
shall be specifically enforceable against such Grantor, and each Grantor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no default has occurred
or is continuing giving rise to the Secured Obligations becoming due and payable
prior to their stated maturities.

          (b)  SECURITIES COLLATERAL. Each Grantor recognizes that, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws, Collateral Agent may be compelled, with respect to any sale of
all or any part of the Securities Collateral conducted without prior
registration or qualification of such Securities Collateral under the Securities
Act and/or such state securities laws, to limit purchasers to those who will
agree, among other things, to acquire the Securities Collateral for their own
account, for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges that any such private sales may be at prices
and on terms less favorable than those obtainable through a public sale without
such restrictions (including a public offering made pursuant to a registration
statement under the Securities Act) and, notwithstanding such circumstances,
each Grantor agrees that any such private sale shall be deemed to have been made
in a commercially reasonable manner and that Collateral Agent shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Securities Collateral for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
issuer would, or should, agree to so register it. If Collateral Agent determines
to exercise its right to sell any or all of the

                                       19


Securities Collateral, upon written request, each Grantor shall and shall cause
each issuer of any Pledged Shares to be sold hereunder from time to time to
furnish to Collateral Agent all such information as Collateral Agent may request
in order to determine the number of shares and other instruments included in the
Securities Collateral which may be sold by Collateral Agent in exempt
transactions under the Securities Act and the rules and regulations of the
Securities and Exchange Commission thereunder, as the same are from time to time
in effect.

          (c)  L/C COLLATERAL ACCOUNT. (i) If an Event of Default has occurred
and is continuing and, in accordance with SECTION 7 of the Credit Agreement, or
(ii) if any Proceeds (as defined in the Intercreditor Agreement) derived from
the Collateral and after application thereof to prepayment of the Loans as
required under the Credit Agreement and as provided in the Intercreditor
Agreement, Borrowers must pay to Collateral Agent an amount (the "AGGREGATE
AVAILABLE AMOUNT") equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding, Borrowers shall deliver funds in
such an amount for deposit in the L/C Collateral Account. If for any reason the
aggregate amount delivered by Borrowers for deposit in the L/C Collateral
Account as aforesaid is less than the Aggregate Available Amount, the aggregate
amount so delivered by Borrowers shall be apportioned among all outstanding
Letters of Credit for purposes of this Section in accordance with the ratio of
the maximum amount available for drawing under each such Letter of Credit (as to
such Letter of Credit, the "MAXIMUM AVAILABLE AMOUNT") to the Aggregate
Available Amount. Upon any drawing under any outstanding Letter of Credit in
respect of which Borrowers have deposited in the L/C Collateral Account any
amounts described above, Collateral Agent shall apply such amounts to reimburse
the Issuing Lender for the amount of such drawing. In the event of cancellation
or expiration of any Letter of Credit in respect of which Company has deposited
in the L/C Collateral Account any amounts described above, or in the event of
any reduction in the Maximum Available Amount under such Letter of Credit,
Collateral Agent shall apply the amount then on deposit in the L/C Collateral
Account in respect of such Letter of Credit (less, in the case of such a
reduction, the Maximum Available Amount under such Letter of Credit immediately
after such reduction) (A) first, to the payment of any amounts payable to
Collateral Agent pursuant to SECTION 18 hereof, (B) second, to the extent of any
excess, to the cash collateralization pursuant to the terms of this Agreement of
any outstanding Letters of Credit in respect of which Borrowers have failed to
pay all or a portion of the amounts described above (such cash collateralization
to be apportioned among all such Letters of Credit in the manner described
above), (C) third, to the extent of any further excess, as provided in SECTION
3(a)(ii) of the Intercreditor Agreement.

SECTION 17.    ADDITIONAL REMEDIES FOR INTELLECTUAL PROPERTY COLLATERAL.

          (a)  Anything contained herein to the contrary notwithstanding, upon
the occurrence and during the continuation of an Event of Default, (i)
Collateral Agent shall have the right (but not the obligation) to bring suit, in
the name of any Grantor, Collateral Agent or otherwise, to enforce its rights
with respect to any Intellectual Property Collateral, in which event each
Grantor shall, at the request of Collateral Agent, do any and all lawful acts
and execute any and all documents required by Collateral Agent in aid of such
enforcement and each Grantor shall promptly, upon demand, reimburse and
indemnify Collateral Agent as provided in SECTIONS 10.3 and 10.4 of the Credit
Agreement and SECTION 19 hereof, as applicable, in connection with the exercise
of its rights under this Section, and, to the extent that Collateral Agent shall
elect not

                                       20


to bring suit to enforce any Intellectual Property Collateral as provided in
this Section, each Grantor agrees to use all commercially reasonable measures,
whether by action, suit, proceeding or otherwise, to prevent the infringement of
any material Intellectual Property Collateral by others and for that purpose
agrees to use its commercially reasonable judgment in maintaining any action,
suit or proceeding against any Person so infringing reasonably necessary to
prevent such infringement; (ii) upon written demand from Collateral Agent, each
Grantor shall execute and deliver to Collateral Agent an assignment or
assignments of the Intellectual Property Collateral and such other documents as
are necessary or appropriate to carry out the intent and purposes of this
Agreement; (iii) each Grantor agrees that such an assignment and/or recording
shall be applied to reduce the Secured Obligations outstanding only to the
extent that Collateral Agent (or any Lender) receives cash proceeds in respect
of the sale of, or other realization upon, the Intellectual Property Collateral;
and (iv) within five Business Days after written notice from Collateral Agent,
each Grantor shall make available to Collateral Agent, to the extent within such
Grantor's power and authority, such personnel in such Grantor's employ on the
date of such Event of Default as Collateral Agent may reasonably designate, by
name, title or job responsibility, to permit such Grantor to continue, directly
or indirectly, to produce, advertise and sell the products and services sold or
delivered by such Grantor under or in connection with the Trademarks, Trademark
Registrations and Trademark Rights, such persons to be available to perform
their prior functions on Collateral Agent's behalf and to be compensated by
Collateral Agent at such Grantor's expense on a per diem, pro-rata basis
consistent with the salary and benefit structure applicable to each as of the
date of such Event of Default.

          (b)  If (i) an Event of Default shall have occurred and, by reason of
cure, waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have occurred and be continuing, (iii) an
assignment to Collateral Agent of any rights, title and interests in and to the
Intellectual Property Collateral shall have been previously made, and (iv) the
Secured Obligations shall not have become immediately due and payable, upon the
written request of any Grantor on behalf of itself and/or any other Grantor,
Collateral Agent shall promptly execute and deliver to each such Grantor such
assignments as may be necessary to reassign to each such Grantor any such
rights, title and interests as may have been assigned to Collateral Agent as
aforesaid, subject to any disposition thereof that may have been made by
Collateral Agent; provided, after giving effect to such reassignment, Collateral
Agent's security interest granted pursuant hereto, as well as all other rights
and remedies of Collateral Agent granted hereunder, shall continue to be in full
force and effect; and provided further, the rights, title and interests so
reassigned shall be free and clear of all Liens other than Liens (if any)
encumbering such rights, title and interest at the time of their assignment to
Collateral Agent and Permitted Encumbrances.

SECTION 18.    APPLICATION OF PROCEEDS.

          Except as expressly provided elsewhere in this Agreement, all Proceeds
received by Collateral Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral shall be applied in the
following order of priority; provided, that, Net Asset Sale Proceeds, Net
Insurance/Condemnation Proceeds arising from destruction, damage or condemnation
of Collateral and Net Debt Securities Proceeds arising from issuance of
Receivables Sales Indebtedness shall be applied as provided in the Credit
Agreement and the Intercreditor Agreement:

                                       21


          FIRST: To the payment of all costs and expenses of such sale,
     collection or other realization, including reasonable compensation to
     Collateral Agent and its agents and counsel, and all other expenses,
     liabilities and advances made or incurred by Collateral Agent in connection
     therewith, and all amounts for which Collateral Agent is entitled to
     indemnification hereunder and all advances made by Collateral Agent
     hereunder for the account of Grantors, and to the payment of all costs and
     expenses paid or incurred by Collateral Agent in connection with the
     exercise of any right or remedy hereunder;

          SECOND: To the payment of all other Secured Obligations (including any
     Aggregate Available Amount deposited into the L/C Collateral Account for
     outstanding Letters of Credit, provided that if such Letters of Credit
     expire without being fully drawn, then at that time, such excess amounts
     shall be applied as provided in this SECTION 18 to then outstanding Secured
     Obligations) (for the ratable benefit of the holders thereof) and, as to
     obligations arising under the Credit Agreement, as provided in the Credit
     Agreement PROVIDED that in making such application in respect of
     outstanding obligations under New Senior Debt Documents, the Collateral
     Agent shall be entitled to deduct from the share of such Proceeds otherwise
     payable to the New Senior Debt Representatives the New Senior Debt holders'
     pro rata share of all amounts that the Collateral Agent has been paid by
     the Paying Indemnifying Parties (such term being used in this SECTION 18 as
     defined in Section 7(c) of the Intercreditor Agreement) pursuant to Section
     7(c) of the Intercreditor Agreement; and

          THIRD: To the payment to or upon the order of the applicable Grantor,
     or to whosoever may be lawfully entitled to receive the same or as a court
     of competent jurisdiction may direct, of any surplus then remaining from
     such proceeds.

SECTION 19.    INDEMNITY AND EXPENSES.

          (a)  Grantors jointly and severally agree to indemnify Collateral
Agent, each Secured Party, including each Lender, each Interest Rate Exchanger,
each Currency Exchanger, each other Permitted Credit Exposure Holder, each
holder of New Senior Debt and each New Senior Debt Representative from and
against any and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the transactions
contemplated hereby (including without limitation enforcement of this
Agreement), except to the extent such claims, losses or liabilities result
solely from Collateral Agent's or such Secured Party's, Lender's Interest Rate
Exchanger's Currency Exchanger's, Other Permitted Credit Exposure Holder's or
New Senior Debt Representative's or holder's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction or from
any failure on the part of Collateral Agent to file any continuation statements
with respect to the Collateral.

          (b)  Grantors jointly and severally agree to pay to Collateral Agent
upon demand the amount of any and all costs and expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, that
Secured Party may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the rights of Secured Party hereunder, or (iv)
the failure by any Grantor to perform or observe any of the provisions hereof.

                                       22


          (c)  The obligations of Grantors in this SECTION 19 shall (i) survive
the termination of this Agreement and the discharge of Grantors' other
obligations under this Agreement, Interest Rate Agreements, the Currency
Agreement, the Other Permitted Credit Exposure Documents, the Credit Agreement
and the other Loan Documents and (ii), as to any Grantor that is a party to the
Subsidiary Guaranty, be subject to the provisions of SECTION 1(b) thereof.

SECTION 20.    CONTINUING SECURITY INTEREST; TRANSFER OF LOANS; TERMINATION AND
             RELEASE.

          (a)  This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the earlier to
occur of (A) termination of the security interest granted hereby pursuant to
SECTION 20(b), and (B) the payment in full of the Secured Obligations (excluding
the Other Permitted Credit Exposure, Interest Rate Obligations and Currency
Obligations and obligations under or in respect of the New Senior Debt
Documents); the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, (ii) be binding
upon Grantors and their respective successors and assigns, and (iii) inure,
together with the rights and remedies of Collateral Agent hereunder, to the
benefit of Collateral Agent and its successors, and permitted transferees and
assigns. Without limiting the generality of the foregoing clause (iii), (A) but
subject to the provisions of SUBSECTION 10.2 of the Credit Agreement, any Lender
may assign or otherwise transfer any Loans held by it to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to Lenders as Secured Parties herein or otherwise, (B) any
Interest Rate Exchanger or Currency Exchanger may assign or otherwise transfer
any Interest Rate Agreement or Currency Agreement to which it is a party to any
other Lender or Affiliate of a Lender in accordance with the terms of such
Interest Rate Agreement or Currency Agreement, and such other permitted assignee
shall thereupon become vested with all the benefits in respect thereof granted
to Interest Rate Exchangers and/or Currency Exchanger as Secured Parties herein
or otherwise, (C) any Other Permitted Credit Exposure Holder may assign or
otherwise transfer any Other Permitted Credit Exposure to any other Lender or
Affiliate of Lender in accordance with the applicable Other Permitted Credit
Exposure Documents and such other permitted assignee shall thereupon become
vested with all the benefits in respect thereof granted to such Other Permitted
Credit Exposure Holder as a Secured Party herein or otherwise and (D) any holder
of any New Senior Debt may assign or otherwise transfer any New Senior Debt to
any other Person in accordance with the applicable New Senior Debt Documents and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to such holder (or its representative) as a Secured Party herein
or otherwise.

          (b)  Upon the earlier to occur of (i) payment in full of all Secured
Obligations (excluding the Other Permitted Credit Exposure, Interest Rate
Obligations and Currency Obligations and obligations under or in respect of the
New Senior Debt Documents), the cancellation or termination of the Commitments
and the cancellation or expiration of all outstanding Letters of Credit, (ii)
the first date on which the Collateral no longer secures the Obligations and
upon election of Grantors, and (iii) the achievement of the Threshold Debt
Rating and acknowledgement of such ratings by Collateral Agent, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the applicable Grantors. Upon any such termination Collateral Agent
will, at Grantors' expense, execute and deliver to

                                       23


Grantors such documents as Grantors shall reasonably request to evidence such
termination. Upon the proposed sale, transfer or other disposition of any
Collateral by a Grantor or of a Grantor in accordance with the Credit Agreement
for which such Grantor desires to obtain a security interest release from
Collateral Agent, such Grantor shall deliver an Officer's Certificate (x)
stating that the Collateral subject to such disposition is being sold,
transferred or otherwise disposed of in compliance with the terms of the Credit
Agreement and (y) specifying the Collateral being sold, transferred or otherwise
disposed of in the proposed transaction. Upon the receipt of such Officer's
Certificate, Collateral Agent shall, at Grantor's expense, so long as Collateral
Agent has no reason to believe that the Officer's Certificate delivered by such
Grantor with respect to such sale is not true and correct, execute and deliver
such releases of its security interest in such Collateral which is to be so
sold, transferred or disposed of, as may be reasonably requested by such
Grantor. If Requisite Lenders under the Credit Agreement, or if required, all
Lenders, consent to the release or reconveyance of any of the Collateral,
Collateral Agent shall at Grantors' expense execute and deliver any necessary
releases of its security interest in such Collateral in connection therewith and
all such reconveyances or transfers shall be without recourse to the Collateral
Agent or the Secured Parties and without representation or warranty of any kind.

SECTION 21.    COLLATERAL AGENT AS AGENT.

          (a)  Pursuant to the Intercreditor Agreement, Collateral Agent has
been appointed to act as Collateral Agent hereunder by the Secured Parties and,
by their acceptance of the benefits hereof, Lenders, Interest Rate Exchangers,
Currency Exchangers, Other Permitted Credit Exposure Holders and New Senior Debt
Representatives shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking any action (including without limitation the
release or substitution of Collateral), solely in accordance with this Agreement
and the Intercreditor Agreement; provided that Collateral Agent shall exercise,
or refrain from exercising, any remedies provided for in SECTION 16 in
accordance with the instructions of Requisite Obligees (as defined in the
Intercreditor Agreement). In furtherance of the foregoing provisions of this
SECTION 21(a), each Lender, Interest Rate Exchanger, Currency Exchanger, Other
Permitted Credit Exposure Holder and New Senior Debt Representative, by its
acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Collateral hereunder, it being
understood and agreed by each such Lender, Interest Rate Exchanger, Currency
Exchanger, Other Permitted Credit Exposure Holder and New Senior Debt
Representative that all rights and remedies hereunder may be exercised solely by
Collateral Agent for the benefit of Secured Parties, in accordance with the
terms of this SECTION 21(a).

          (b)  Collateral Agent shall not be deemed to have any duty whatsoever
with respect to any Interest Rate Exchanger, Currency Exchanger, Other Permitted
Credit Exposure Holder or New Senior Debt Representative until it shall have
received written notice in form and substance satisfactory to Collateral Agent
from a Grantor, or such Interest Rate Exchanger, Currency Exchanger, Other
Permitted Credit Exposure Holder or New Senior Debt Representative as to the
existence and terms of the applicable Interest Rate, Currency Agreement, Other
Permitted Credit Exposure or New Senior Debt Documents, as the case may be.

                                       24


SECTION 22.    ADDITIONAL GRANTORS.

          The initial Subsidiary Grantors hereunder shall be such of the
Subsidiaries of Company as are signatories hereto on the date hereof. From time
to time subsequent to the date hereof, additional Subsidiaries of Company may
become parties hereto as additional Grantors (each an "ADDITIONAL GRANTOR"), by
executing a Counterpart substantially in the form of EXHIBIT I annexed hereto.
Upon delivery of any such Counterpart to Collateral Agent, notice of which is
hereby waived by Grantors, each such Additional Grantor shall be a Grantor and
shall be as fully a party hereto as if such Additional Grantor were an original
signatory hereto. Each Grantor expressly agrees that its obligations arising
hereunder shall not be affected or diminished by the addition or release of any
other Grantor hereunder, nor by any election of Collateral Agent not to cause
any Subsidiary of Company to become an Additional Grantor hereunder. This
Agreement shall be fully effective as to any Grantor that is or becomes a party
hereto regardless of whether any other Person becomes or fails to become or
ceases to be a Grantor hereunder.

SECTION 23.    AMENDMENTS; ETC.

          No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by any Grantor therefrom, shall
in any event be effective unless the same shall be in writing and signed by
Collateral Agent and, in the case of any such amendment or modification, by
Grantors; PROVIDED this Agreement may be modified by the execution of a
Counterpart by an Additional Grantor in accordance with SECTION 22 and Grantors
hereby waive any requirement of notice of or consent to any such amendment. Any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given.

SECTION 24.    NOTICES.

          Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile, or three Business Days after depositing it in the United States
mail with postage prepaid and properly addressed; PROVIDED that notices to
Collateral Agent shall not be effective until received. For the purposes hereof,
the address of each party hereto shall be as provided in the Credit Agreement or
as set forth under such party's name on the signature pages hereof or such other
address as shall be designated by such party in a written notice delivered to
the other parties hereto.

SECTION 25.    FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.

          No failure or delay on the part of Collateral Agent in the exercise
of any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.

                                       25


SECTION 26.    SEVERABILITY.

          In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

SECTION 27.    HEADINGS.

          Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.

SECTION 28.    GOVERNING LAW; TERMS; RULES OF CONSTRUCTION.

          THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT
THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein or in the
Credit Agreement, terms used in Articles 8 and 9 of the UCC are used herein as
therein defined. The rules of construction set forth in SUBSECTION 1.3 of the
Credit Agreement shall be applicable to this Agreement MUTATIS MUTANDIS.

SECTION 29.    CONSENT TO JURISDICTION AND SERVICE OF PROCESS.

          ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF
OR RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND
CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY
AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SECTION 24; (IV) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH
GRANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT COLLATERAL AGENT
RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST SUCH GRANTOR IN THE COURTS OF ANY OTHER

                                       26


JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF THIS SECTION 29 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT
PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.

SECTION 30.    WAIVER OF JURY TRIAL.

          EACH GRANTOR AND COLLATERAL AGENT HEREBY AGREE TO WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT. The scope of this waiver is intended to be all
encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims. Each Grantor and Collateral Agent acknowledge that this
waiver is a material inducement for each Grantor and Collateral Agent to enter
into a business relationship, that each Grantor and Collateral Agent have
already relied on this waiver in entering into this Agreement and that each will
continue to rely on this waiver in their related future dealings. Each Grantor
and Collateral Agent further warrant and represent that each has reviewed this
waiver with its legal counsel, and that each knowingly and voluntarily waives
its jury trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 30
AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
In the event of litigation, this Agreement may be filed as a written consent to
a trial by the court.

SECTION 31.    COUNTERPARTS.

          This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.

                                       27


       IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.

                               EACH OF THE ENTITIES LISTED ON SCHEDULE A ANNEXED
                               HERETO

                               By:           /s/ Jeffrey A. Denker
                                     ----------------------------------------
                                     on behalf of each of the entities listed on
                                     SCHEDULE A annexed hereto

                                     Name:           Jeffrey A. Denker
                                          -----------------------------------

                                       S-1


                                   SCHEDULE A

 NAME                                       NOTICE ADDRESS FOR EACH GRANTOR

                                       A-1


                                       BANKERS TRUST COMPANY
                                       as Collateral Agent

                                       By:       /s/ Mary Jo Jolly
                                              --------------------------------
                                        Name:    Mary Jo Jolly
                                              --------------------------------
                                        Title:   Assistant Vice President
                                              --------------------------------

                                       NOTICE ADDRESS:

                                              Bankers Trust Company
                                              130 Liberty Street, 14th Floor
                                              New York, New York
                                              Attention: Mary Jo Jolly

                                       WITH A COPY TO:

                                              Bankers Trust Company
                                              300 South Grand Avenue, 41st floor
                                              Los Angeles, CA 90071
                                              Attention: Robert G. Kolb



                               SCHEDULE 1(e)(i)TO
                               SECURITY AGREEMENT


- ---------------------------------------------------------------------------------------------------------------------
                               CLASS                                                                  PERCENTAGE OF
                                 OF               STOCK                PAR          NUMBER OF          OUTSTANDING
      STOCK ISSUER*            STOCK         CERTIFICATE NOS.         VALUE           SHARES         SHARES PLEDGED
=====================================================================================================================
                                                                                      

- ---------------------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------------------


* Indicate if stock constitutes Foreign Pledged Shares.

                                    1(e)(i)-1


                               SCHEDULE 1(e)(ii)TO
                               SECURITY AGREEMENT



- --------------------------------------------------------------------------------
                                                         AMOUNT OF
                   DEBT ISSUER                         INDEBTEDNESS
================================================================================
                                                    

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------


                                   1(e)(ii)-1


                               SCHEDULE 1(f)(iii)
                                       TO
                               SECURITY AGREEMENT

                                   1(f)(iii)-1


                               SCHEDULE 1(f)(iii)
                              TO SECURITY AGREEMENT

                                    4(b) - 1


                                  SCHEDULE 4(d)
                                       TO
                               SECURITY AGREEMENT

                                     4(d)-1


                                  SCHEDULE 4(e)
                                       TO
                               SECURITY AGREEMENT

                                   OTHER NAMES

                                     4(e)-1


                                  SCHEDULE 4(i)
                                       TO
                               SECURITY AGREEMENT

                                 FILING OFFICES

     GRANTOR                                             FILING OFFICES

                                     4(i)-1


                                                                    EXHIBIT I TO
                                                              SECURITY AGREEMENT

                              [FORM OF COUNTERPART]

     COUNTERPART (this "COUNTERPART"), dated _______, is delivered pursuant to
SECTION 22 of the Security Agreement referred to below. The undersigned hereby
agrees that this Counterpart may be attached to the Security Agreement, dated as
of _____________, _____ (as it may be from time to time amended, modified or
supplemented, the "SECURITY AGREEMENT"; capitalized terms used herein not
otherwise defined herein shall have the meanings ascribed therein), among
[Insert Company Name], the other Grantors named therein, and Bankers Trust
Company, as Collateral Agent. The undersigned by executing and delivering this
Counterpart hereby becomes a Grantor under the Security Agreement in accordance
with SECTION 22 thereof and agrees to be bound by all of the terms thereof.
[Without limiting the generality of the foregoing, the undersigned hereby:

          (i)   authorizes the Collateral Agent to add the information set forth
     on the Schedules to this Agreement to the correlative Schedules attached to
     the Security Agreement;

          (ii)  agrees that all Collateral of the undersigned, including the
     items of property described on the Schedules hereto, shall become part of
     the Collateral and shall secure all Secured Obligations; and

          (iii) makes the representations and warranties set forth in the
     Security Agreement, as amended hereby, to the extent relating to the
     undersigned.]

                                             [NAME OF ADDITIONAL GRANTOR]

                                             By:
                                                ---------------------------
                                             Name:
                                             Title:

                                       I-1


                                                                  EXHIBIT II TO
                                                             SECURITY AGREEMENT

                 [FORM OF GRANT OF COPYRIGHT SECURITY INTEREST]

                     GRANT OF COPYRIGHT SECURITY INTEREST

                  WHEREAS, [NAME OF GRANTOR], a ___________ corporation
("GRANTOR"), owns and uses in its business, and will in the future adopt and so
use, various intangible assets, including the Copyright Collateral (as defined
below); and

                  WHEREAS, [certain affiliates of Grantor][Grantor] [has/have]
entered into a Secured Credit Agreement dated as of _____________, _____ (said
Credit Agreement, as it may heretofore have been and as it may hereafter be
amended, supplemented, restated or otherwise modified from time to time, being
the "CREDIT AGREEMENT") with the financial institutions named therein
(collectively, together with their respective successors and assigns party to
the Credit Agreement from time to time, the "LENDERS"), and, _________________,
as Collateral Agent for the Lenders (in such capacity, "LENDERS"), Bankers Trust
Company, as Collateral Agent for the Lenders (in such capacity, and Bankers
Trust Company, as Collateral Agent for the Lenders (in such capacity,
"COLLATERAL AGENT"); and

                  WHEREAS, Grantor [has guaranteed the obligations under the
Credit Agreement pursuant to a certain ___________ Guaranty and] may from time
to time enter or guaranty, or may from time to time have entered or guarantied,
into one or more Interest Rate Agreements, Currency Agreements, Other Permitted
Credit Exposure Documents and/or New Senior Debt Documents (each as defined in
the Credit Agreement); and

                  WHEREAS, pursuant to the terms of a Security Agreement dated
as of ___________, _____ (as amended, supplemented or otherwise modified from
time to time, the "SECURITY AGREEMENT"), among Grantor, Collateral Agent and the
other grantors named therein, Grantor has agreed to create in favor of
Collateral Agent for the benefit of certain Secured Parties named therein a
secured and protected interest in, and Collateral Agent has agreed to become a
secured creditor with respect to, the Copyright Collateral;

                  NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, subject to the terms and
conditions of the Security Agreement, Grantor hereby grants to Collateral Agent
a security interest in all of Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in which Grantor
now has or hereafter acquires an interest and wherever the same may be located
(the "COPYRIGHT COLLATERAL"):

          (i)     all rights, title and interest (including rights acquired
          pursuant to a license or otherwise but only to the extent permitted by
          agreements governing such license or other use) under copyright in
          various published and unpublished works of authorship including,
          without limitation, computer programs, computer data bases, other
          computer software layouts, trade dress, drawings, designs, writings,
          and formulas (including, without limitation, the works listed on
          SCHEDULE A, as the same may be amended pursuant hereto from time to
          time) (collectively, the "COPYRIGHTS"), all copyright registrations
          issued to

                                      II-1


          Grantor and applications for copyright registration that have been or
          may hereafter be issued or applied for thereon in the United States
          and any state thereof and in foreign countries (including, without
          limitation, the registrations listed on SCHEDULE A, as the same may be
          amended pursuant hereto from time to time) (collectively, the
          "COPYRIGHT REGISTRATIONS"), all common law and other rights in and to
          the Copyrights in the United States and any state thereof and in
          foreign countries including all copyright licenses (but with respect
          to such copyright licenses, only to the extent permitted by such
          licensing arrangements) (the "COPYRIGHT RIGHTS"), including, without
          limitation, each of the Copyrights, rights, titles and interests in
          and to the Copyrights, all derivative works and other works
          protectable by copyright, which are presently, or in the future may
          be, owned, created (as a work for hire for the benefit of Grantor),
          authored (as a work for hire for the benefit of Grantor), or acquired
          by Grantor, in whole or in part, and all Copyright Rights with respect
          thereto and all Copyright Registrations therefor, heretofore or
          hereafter granted or applied for, and all renewals and extensions
          thereof, throughout the world, including all proceeds thereof (such
          as, by way of example and not by limitation, license royalties and
          proceeds of infringement suits), the right (but not the obligation) to
          renew and extend such Copyright Registrations and Copyright Rights and
          to register works protectable by copyright and the right (but not the
          obligation) to sue in the name of such Grantor or in the name of
          Collateral Agent or Lenders for past, present and future infringements
          of the Copyrights and Copyright Rights; and

          (ii) all proceeds, products, rents and profits of or from any and all
          of the foregoing Copyright Collateral and, to the extent not otherwise
          included, all payments under insurance (whether or not Collateral
          Agent is the loss payee thereof), or any indemnity, warranty or
          guaranty, payable by reason of loss or damage to or otherwise with
          respect to any of the foregoing Copyright Collateral. For purposes of
          this Grant of Copyright Security Interest, the term "PROCEEDS"
          includes whatever is receivable or received when Copyright Collateral
          or proceeds are sold, exchanged, collected or otherwise disposed of,
          whether such disposition is voluntary or involuntary.

               Notwithstanding anything herein to the contrary, in no event
shall the Copyright Collateral include, and Grantor shall be not deemed to have
granted a security interest in, any of Grantor's rights or interests in any
license, contract or agreement to which Grantor is a party or any of its rights
or interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which Grantor is a party (other than to the extent that
any such term would be rendered ineffective pursuant to the UCC or any other
applicable law (including the Bankruptcy Code) or principles of equity);
PROVIDED, that immediately upon the ineffectiveness, lapse or termination of any
such provision, the Copyright Collateral shall include, and Grantor shall be
deemed to have granted a security interest in, all such rights and interests as
if such provision had never been in effect.

                                      II-2


               Grantor does hereby further acknowledge and affirm that the
rights and remedies of Collateral Agent with respect to the security interest in
the Copyright Collateral granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.

                  [The remainder of this page intentionally left blank.]

                                      II-3


     IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ___ day of ___________, _____.

                                             [NAME OF GRANTOR]

                                             By:
                                                --------------------------
                                             Name:
                                                  ------------------------
                                             Title:
                                                   -----------------------

                                      II-4


                                   SCHEDULE A
                                       TO
                      GRANT OF COPYRIGHT SECURITY INTEREST

                                      A-1


                                                                 EXHIBIT III TO
                                                             SECURITY AGREEMENT

                                PLEDGE AMENDMENT

          This Pledge Amendment, dated __________________, is delivered pursuant
to the Security Agreement, dated _______________ between _____________, a
_______________ ("GRANTOR"), the other Grantors named therein, and
__________________ (as it may be from time to time amended, modified or
supplemented, the "SECURITY AGREEMENT"). Capitalized terms used herein not
otherwise defined herein shall have the meanings ascribed thereto in the
Security Agreement.

          Grantor hereby agrees that the [Pledged Shares] [Pledged Debt] listed
on the schedule attached hereto shall be deemed to be part of the [Pledged
Shares] [Pledged Debt] and shall become part of the Securities Collateral and
shall secure all Secured Obligations.

          IN WITNESS WHEREOF, Grantor has caused this Pledge Amendment to be
duly executed and delivered by its duly authorized officer as of ____________.

                                             [GRANTOR]

                                             By:
                                                --------------------------
                                             Title:

                                     III-1

EX-4.20

                                                                    EXHIBIT 4.20

                                 FIRST AMENDMENT
                              TO SECURITY AGREEMENT
                          DATED AS OF JANUARY 24, 2002

               This FIRST AMENDMENT TO SECURITY AGREEMENT (this "AMENDMENT")
is dated as of January 24, 2002 and entered into by and among OWENS-ILLINOIS
GROUP, INC., a Delaware corporation ("COMPANY"), each of THE UNDERSIGNED DIRECT
AND INDIRECT SUBSIDIARIES of Company (each of such undersigned Subsidiaries
being a "SUBSIDIARY GRANTOR" and collectively with the Company, the "GRANTORS"),
and BANKERS TRUST COMPANY, as Collateral Agent for and representative of the
Lenders, the Interest Rate Exchangers, the Currency Exchangers, the Other
Permitted Credit Exposure Holders and the New Senior Debt Representatives (in
such capacity herein called the "COLLATERAL AGENT"), and is made with reference
to that certain Security Agreement dated as of April 23, 2001 (the "SECURITY
Agreement"), by and among the foregoing parties. Capitalized terms used herein
without definition shall have the same meanings herein as set forth in the
Security Agreement, and, if not defined herein or in the Security Agreement, as
defined in the Credit Agreement (defined below).

                                    RECITALS

               WHEREAS, the Lenders have entered into a Secured Credit
Agreement dated as of April 23, 2001 (the "SECURED CREDIT AGREEMENT"), as
amended by that certain First Amendment to Secured Credit Agreement and Consent
dated as of December 31, 2001 (the "FIRST AMENDMENT AND CONSENT") with certain
subsidiaries of Company as Borrowers and with Company as guarantor pursuant to
Section 9 thereof and Owens-Illinois General, Inc., as Borrowers' Agent (the
Secured Credit Agreement, as so amended and as more particularly defined in the
Security Agreement, is referred to herein as the "CREDIT AGREEMENT");

               WHEREAS, the Subsidiary Guarantors entered into a Subsidiary
Guaranty of all Obligations as defined in and now or hereafter existing under or
in respect of the Credit Agreement;

               WHEREAS, the Domestic Borrowers entered into a Domestic
Borrowers' Guaranty under which each Domestic Borrower guaranteed (i) all
Revolving Loans made to, and related Obligations of, each other Domestic
Borrower; (ii) all Offshore Loans made to, and all other Obligations of, the
Offshore Borrowers; (iii) the Other Lender Guarantied Obligations; and (iv) all
Term Loans made to, and related Obligations of, each other Domestic Borrower;

               WHEREAS, the Credit Agreement permits Indebtedness from time
to time issued constituting New Senior Debt to be secured by the Domestic
Collateral (as defined in the Intercreditor Agreement) under the Domestic
Collateral Documents, including the Security Agreement;

               WHEREAS, concurrently herewith, Owens Brockway is issuing
certain 8 7/8% Senior Secured Notes due 2009 in the aggregate principal amount
of $1,000,000,000 (together with any subsequent issuance of notes consituting
the same series of notes as the 8 7/8% Senior Secured Notes due 2009 pursuant to
the same indenture on substantially identical terms the Net

                                        1


Debt Securities Proceeds of which are applied to repay the Term Loans pursuant
to Section 2.4A(ii)(e) of the Credit Agreement or as otherwise required thereby,
in each case together with any guarantees thereof and any notes and guarantees
issued in exchange therefor or replacement thereof containing substantially
identical terms, the "NEW 2002 SENIOR NOTES") which New 2002 Senior Notes
constitute New Senior Debt (subject, with respect to any subsequent issuance of
notes (but not any exchange notes) described above, to Administrative Agent's
determination in its reasonable judgment that the terms and conditions of such
notes are substantially comparable to those prevailing in the market place for
comparable debt issuances) and desires to have such New 2002 Senior Notes
constitute Senior Secured Obligations under the Intercreditor Agreement and to
secure the obligations in respect of such New 2002 Senior Notes by certain of
the Domestic Collateral;

               WHEREAS, in order to facilitate the issuance of the New 2002
Senior Notes, Owens Brockway has obtained, pursuant to the First Amendment and
Consent, the consent of the Requisite Lenders and Requisite Obligees, as
applicable, to the Collateral Agent's amendment of the Security Agreement to
eliminate the provision of certain Securities Collateral as security for the New
2002 Senior Notes, which Securities Collateral would otherwise secure the
obligations in respect of such New 2002 Senior Notes upon their issuance and the
execution of a counterpart to the Intercreditor Agreement by the New Senior Debt
Representative and Borrower's Agent and the application of the Net Debt
Securities Proceeds arising from the issuance of the New 2002 Senior Notes to
repay the Term Loans pursuant to Section 2.4A(ii)(e) of the Credit Agreement;
and

               WHEREAS, the parties desire to amend the Security Agreement as
set forth herein to implement the provisions of the First Amendment and Consent.

               NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:

                                   SECTION 1.
                        AMENDMENTS TO SECURITY AGREEMENT

          1.1  RECITALS.

          (a)  Recital 5 of the Security Agreement is hereby amended by adding
the phrase "acting in such capacity for the benefit of the holders of New Senior
Debt" after the words "New Senior Debt" in the last sentence thereof.

          1.2  GRANT OF SECURITY.

          (a)  The initial paragraph of Section 1 of the Security Agreement is
hereby amended by adding the following parenthetical after the words "Secured
Parties": "(subject to Section 2 below with respect to the New 2002 Senior
Notes)".

          (b)  The last sentence of Section 1(e)(i) is replaced in its entirety
by the following: "As used herein, "DOMESTIC OBLIGATIONS" means the obligations
of the Domestic Borrowers consisting of Term Loans, Revolving Loans, Letters of
Credit for the account of Domestic Borrowers, the Domestic Overdraft Agreement,
any obligations of any Loan Party under other Loan Documents,

                                        2


Other Permitted Credit Exposure Documents and New Senior Debt Documents, and
Interest Rate Obligations and Currency Obligations, in each case which are not
obligations of Offshore Borrowers or any Foreign Subsidiary, and "FOREIGN
OBLIGATIONS" means the obligations of the Offshore Borrowers and their Foreign
Subsidiaries consisting of Offshore Loans, Letters of Credit for the account of
Offshore Borrowers, the Offshore Overdraft Agreements and any obligations under
the other Loan Documents which are not obligations of a domestic entity,
including Grantors (it being understood that the intent of the foregoing
definitions and provisos is to avoid a situation in which a pledge of Foreign
Pledged Shares and a realization on, foreclosure against or recourse to such
Foreign Pledged Shares would constitute an investment of earnings in United
States property under Section 956 (or a successor provision) of the Internal
Revenue Code which would trigger an increase in the gross income of a United
States shareholder of any issuer of Foreign Pledged Shares pursuant to Section
951 (or a successor provision) of the Internal Revenue Code)."

          1.3  SECURITY FOR OBLIGATIONS. Section 2 of the Security Agreement is
hereby amended by (i) adding the following after the words "Section 1(e)" in the
first sentence thereof: "and the exclusion set forth below with respect to the
New 2002 Senior Notes"; (ii) adding the following to the end of the first
sentence thereof: "and PROVIDED, FURTHER, THAT, the Securities Collateral
described in clauses (e)(i) and (e)(ii) of the definition thereof (other than
any such Securities Collateral directly owned by or owed to Company or
Packaging)(such Securities Collateral, including, for the avoidance of doubt,
any documents, instruments or certificates evidencing same and any proceeds of
such Securities Collateral being the "EXCLUDED SECURITIES COLLATERAL") shall not
be security for or be assigned or pledged on account of the New 2002 Senior
Notes and such Excluded Securities Collateral shall not be held by Collateral
Agent for the benefit of any holder of, or New Senior Debt Representative with
respect to, such New 2002 Senior Notes"; and (iii) deleting the proviso in the
penultimate sentence thereof in its entirety and replacing it with the
following: "PROVIDED, HOWEVER, that the pledge made and security interest
granted in SECTION 1 and any other provisions of this Agreement shall be
effective as to any obligations in respect of any New Senior Debt or Other
Lender Guarantied Obligations only if the holders of such obligations or their
representatives (A) shall have executed and delivered to the Collateral Agent a
counterpart of the Intercreditor Agreement or an acknowledgment to the
Intercreditor Agreement (in the form attached thereto) and the Borrowers' Agent
has duly executed and delivered an acknowledgement to such acknowledgement and
(B) in the case of Other Lender Guarantied Obligations shall have released, in
form and substance satisfactory to Collateral Agent and Borrowers' Agent,
Holdings from any pre-existing guaranty obligations in connection with such
Other Lender Guaranteed Obligations."

          1.4  REMEDIES. The second sentence of Section 16(a) of the Security
Agreement is hereby amended by adding the following to the end thereof: "(the
foregoing limitation, however, shall not apply to Collateral Agent acting in
such capacity)".

          1.5  APPLICATION OF PROCEEDS. Clause "SECOND" of Section 18 of the
Security Agreement is hereby amended by adding the word "ratable" before the
phrase "payment of all other Secured Obligations" and striking the words
"PROVIDED that" and adding the following in their place: "PROVIDED, THAT, no
Proceeds received by Collateral Agent in respect of any sale of, collection from
or other realization upon all or any part of the Excluded Securities Collateral
shall be applied toward payment of obligations in respect of the New 2002 Senior
Notes (and

                                        3


neither the holders of nor representatives for such New 2002 Senior Notes
shall be entitled to any increased portion of any Proceeds of any other
Collateral due to such exclusion); PROVIDED, FURTHER, THAT,"

                                   SECTION 2.
                           CONDITIONS TO EFFECTIVENESS

          2.1  This Amendment shall become effective only upon the satisfaction

of all of
the following conditions precedent (the date of satisfaction of such conditions
being referred to herein as the "FIRST AMENDMENT EFFECTIVE DATE"):

               (a) On or before the First Amendment Effective Date, each of the
Grantors shall deliver to Administrative Agent sufficient originally executed
copies, where appropriate, for each Lender and its counsel) the following, each,
unless otherwise noted, dated the First Amendment Effective Date:

                   (i)  Resolutions of its Board of Directors approving and
          authorizing the execution, delivery, and performance of this
          Amendment, certified as of the First Amendment Effective Date by its
          corporate secretary or an assistant secretary as being in full force
          and effect without modification or amendment;

                   (ii)  Signature and incumbency certificates of its officers
          executing this Amendment; and

                   (iii) Executed copies of this Amendment.

               (b) On or before the First Amendment Effective Date, all
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto not
previously found acceptable by Administrative Agent, acting on behalf of
Lenders, and its counsel shall be satisfactory in form and substance to
Administrative Agent and such counsel, and Administrative Agent and such counsel
shall have received all such counterpart originals or certified copies of such
documents as Administrative Agent may reasonably request.

                                   SECTION 3.
                         REPRESENTATIONS AND WARRANTIES

               In order to induce Collateral Agent to enter into this
Amendment and to amend the Security Agreement in the manner provided herein,
each of the Grantors represents and warrants to Collateral Agent and each
Secured Party that the following statements are true, correct and complete:

          3.1  CORPORATE POWER AND AUTHORITY. Company and each Subsidiary
Grantor has all requisite corporate power and authority to enter into this
Amendment and to carry out the transactions contemplated by, and perform its
obligations under, the Security Agreement as amended by this Amendment (the
"AMENDED AGREEMENT").

                                        4


          3.2  AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment and the performance of the Amended Agreement have been duly authorized
by all necessary corporate action on the part of each Grantor.

          3.3  NO CONFLICT. The execution and delivery by Company and each
Subsidiary Grantor of this Amendment and the performance by same of the Amended
Agreement do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to Company or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of Company
or any of its Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on Company or any of its Subsidiaries, (ii)
conflict with, result in a material breach of or constitute (with due notice or
lapse of time or both) a material default under any Contractual Obligation of
Company or any of its Subsidiaries, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Company or any of
its Subsidiaries (other than Liens in favor of the Collateral Agent), or (iv)
require any approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of Company or any of its Subsidiaries, other
than those approvals and consents which have been obtained.

          3.4  GOVERNMENTAL CONSENTS. The execution and delivery by each Grantor
of this Amendment and the performance by each Grantor of the Amended Agreement
do not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body, except for filings, consents or
notices that have been or will be made or obtained during the period in which
they are required to be obtained or made.

          3.5  BINDING OBLIGATION. This Amendment and the Amended Agreement have
been duly executed and delivered by each Grantor and are the legally valid and
binding obligations of each Grantor, enforceable against each Grantor in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.

          3.6  INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM SECURITY
AGREEMENT. The representations and warranties contained in Section 4 of the
Security Agreement are and will be true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.

          3.7  ABSENCE OF DEFAULT. No event has occurred and is continuing or
will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.

                                   SECTION 4.
                                  MISCELLANEOUS

          4.1  REFERENCE TO AND EFFECT ON THE SECURITY AGREEMENT AND THE OTHER
               LOAN DOCUMENTS.

                                        5


               (a)  On and after the First Amendment Effective Date, each
reference in the Security Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Security Agreement, and each
reference in the other Loan Documents to the "Security Agreement", "thereunder",
"thereof" or words of like import referring to the Security Agreement shall mean
and be a reference to the Amended Agreement.

               (b)  Except as specifically amended by this Amendment, the
Security Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.

               (c)  The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of
Administrative Agent, Collateral Agent or any other Agent or any Lender under,
the Security Agreement or any of the other Loan Documents.

          4.2  HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.

          4.3  APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK) WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT
THAT THE UCC PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST UNDER THE
SECURITY AGREEMENT, OR REMEDIES THEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.

          4.4  COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. Delivery of an executed counterpart of a signature page of
this amendment by telecopy shall be effective as delivery of a manually executed
counterpart of this Amendment.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                        6


               IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.

                                        ON BEHALF OF EACH ENTITY NAMED ON THE
                                        ATTACHED EXHIBIT A, IN THE CAPACITY SET
                                        FORTH FOR SUCH ENTITY ON SUCH EXHIBIT A

                                        By:        /s/ Jeffrey A. Denker
                                            -----------------------------------
                                                   Jeffrey A. Denker

                                        BANKERS TRUST COMPANY,
                                        AS COLLATERAL AGENT

                                        BY:        /s/ Mary Jo Jolly
                                            -----------------------------------
                                        NAME:      Mary Jo Jolly
                                        TITLE:     Assistant Vice President



                                    EXHIBIT A
                                       TO
                      FIRST AMENDMENT TO SECURITY AGREEMENT

                                                   TITLE OF OFFICER EXECUTING ON
                NAME OF ENTITY                       BEHALF OF SUCH ENTITY
               ----------------                    -----------------------------

Owens-Illinois Group, Inc.                       Assistant Treasurer

Owens-Brockway Glass Container Inc.              Treasurer

OI General FTS Inc.                              Treasurer

OI Plastic Products FTS Inc.                     Treasurer

O-I Health Care Holding Corp.                    Treasurer

OI General Finance Inc.                          Treasurer

Specialty Packaging Licensing Company            Treasurer

Owens-Illinois Closure Inc.                      Treasurer

Product Design & Engineering, Inc.               Treasurer

OI Brazil Closure Inc.                           Treasurer

Owens-Illinois Prescription Products Inc.        Treasurer

OI Medical Inc.                                  Treasurer

MARC Industries, Inc.                            Treasurer

OI Medical Holdings Inc.                         Treasurer

Anamed International, Inc.                       Treasurer

Martell Medical Products, Incorporated           Treasurer

Owens-BriGam Medical Company                     Treasurer of each
                                                 general partner

BriGam, Inc.                                     Treasurer

BriGam Medical, Inc.                             Treasurer



                                                   TITLE OF OFFICER EXECUTING ON
                NAME OF ENTITY                       BEHALF OF SUCH ENTITY
               ----------------                    -----------------------------

BriGam Ventures, Inc.                            Treasurer

Owens-Brockway Plastic Products Inc.             Treasurer

Owens-Illinois Specialty Products Puerto
Rico, Inc.                                       Treasurer

OI Regioplast STS Inc.                           Treasurer

OI Australia Inc.                                Treasurer

ACI America Holdings Inc.                        Treasurer

Continental PET Technologies, Inc.               Treasurer

OI Venezuela Plastic Products Inc.               Treasurer

OI Castalia STS Inc.                             Treasurer

OI Levis Park STS Inc.                           Treasurer

OI AID STS Inc.                                  Treasurer

Owens-Illinois General Inc.                      Treasurer

O-I Holding Company, Inc.                        Treasurer

Universal Materials, Inc.                        Treasurer

Owens-Brockway Packaging, Inc.                   Treasurer

Brockway Realty Corporation                      Treasurer

Brockway Research, Inc.                          Treasurer

NHW Auburn, LLC                                  Treasurer of its
                                                 sole member

OI Auburn Inc.                                   Treasurer

SeaGate, Inc.                                    Treasurer

SeaGate II, Inc.                                 Treasurer

SeaGate III, Inc.                                Treasurer

Owens-Brockway Glass Container Trading
Company                                          Treasurer



                                                   TITLE OF OFFICER EXECUTING ON
                NAME OF ENTITY                       BEHALF OF SUCH ENTITY
               ----------------                    -----------------------------

OB Cal South Inc.                                Treasurer

Overseas Finance Company                         Treasurer

OIB Produvisa Inc.                               Treasurer

OI Consol STS Inc.                               Treasurer

OI California Containers Inc.                    Treasurer

OI Puerto Rico STS Inc.                          Treasurer

OI Ecuador STS Inc.                              Treasurer

OI Europe & Asia Inc.                            Treasurer

OI Peru STS Inc.                                 Treasurer

OI Poland Inc.                                   Treasurer

OI Hungary Inc.                                  Treasurer

OI International Holdings Inc.                   Treasurer

EX-4.21

                                                               Exhibit 4.21
                          REGISTRATION RIGHTS AGREEMENT

                                  BY AND AMONG

                       OWENS-BROCKWAY GLASS CONTAINER INC.

                                       AND

                                 THE GUARANTORS
                                  LISTED HEREIN

                                       AND

                         BANC OF AMERICA SECURITIES LLC
                              GOLDMAN, SACHS & CO.
                         DEUTSCHE BANC ALEX. BROWN INC.
                        MORGAN STANLEY & CO. INCORPORATED
                            SCOTIA CAPITAL (USA) INC.

                          DATED AS OF JANUARY 24, 2002



                          REGISTRATION RIGHTS AGREEMENT

          This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of January 24, 2002, by and among Owens-Brockway Glass Container
Inc., a Delaware corporation (the "COMPANY"), the Guarantors listed on the
signature pages hereof (each individually a "GUARANTOR" and collectively,
"GUARANTORS") and Banc of America Securities LLC, Goldman, Sachs & Co., Deutsche
Banc Alex. Brown Inc., Morgan Stanley & Co. Incorporated and Scotia Capital
(USA) Inc. (each an "INITIAL PURCHASER" and, collectively, the "INITIAL
PURCHASERS"), each of whom has agreed to purchase the Company's 8?% Senior
Secured Notes due 2009 (the "INITIAL NOTES") pursuant to the Purchase Agreement
(as defined below).

          This Agreement is made pursuant to the Purchase Agreement, dated as of
January 16, 2002 (the "PURCHASE AGREEMENT"), by and among the Company, the
Guarantors and the Initial Purchasers. In order to induce the Initial Purchasers
to purchase the Initial Notes, the Company and the Guarantors have agreed to
provide the registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the obligations of the Initial
Purchasers set forth in Section 5(h) of the Purchase Agreement.

          The parties hereby agree as follows:

SECTION 1. DEFINITIONS

          As used in this Agreement, the following capitalized terms shall have
the following meanings:

          AFFILIATE: With respect to any specified person, "Affiliate" shall
mean 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 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 "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.

          BROKER-DEALER: Any broker or dealer registered under the Exchange Act.

          BROKER-DEALER TRANSFER RESTRICTED SECURITIES: Exchange Notes that are
acquired by a Broker-Dealer in the Exchange Offer in exchange for Initial Notes
that such Broker-Dealer acquired for its own account as a result of
market-making activities or other trading activities (other than Initial Notes
acquired directly from the Company or any of its Affiliates).

          BUSINESS DAY: Any day except a Saturday, Sunday or other day in the
City of New York, or in the city of the corporate trust office of the Trustee,
on which banks are authorized to close.

          CLOSING DATE: The date of this Agreement.

          COMMISSION: The Securities and Exchange Commission.



          CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Securities Act of the Exchange Offer Registration
Statement relating to the Exchange Notes to be issued in the Exchange Offer,
(ii) the maintenance of such Registration Statement continuously effective and
the keeping of the Exchange Offer open for a period not less than the minimum
period required pursuant to Section 3(b) hereof, and (iii) the delivery by the
Company to the Registrar under the Indenture of Exchange Notes in the same
aggregate principal amount as the aggregate principal amount of Initial Notes
that were tendered by Holders thereof pursuant to the Exchange Offer.

          EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.

          EXCHANGE NOTES: The 8 7/8% Senior Secured Notes due 2009, of the same
series under the Indenture as the Initial Notes, to be issued to Holders in
exchange for Transfer Restricted Securities pursuant to this Agreement.

          EXCHANGE OFFER: The registration by the Company and the Guarantors
under the Securities Act of the Exchange Notes and the related guarantees
pursuant to a Registration Statement pursuant to which the Company offers the
Holders of all outstanding Transfer Restricted Securities the opportunity to
exchange all such outstanding Transfer Restricted Securities held by such
Holders for Exchange Notes in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities tendered in
such exchange offer by such Holders.

          EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.

          HOLDERS: As defined in Section 2(b) hereof.

          INDEMNIFIED PARTY: As defined in Section 8(c) hereof.

          INDEMNIFYING PARTY: As defined in Section 8(c) hereof.

          INDENTURE: The Indenture, dated as of January 24, 2002, among the
Company, the Guarantors and U.S. Bank, N.A., as trustee (the "TRUSTEE"), as
supplemented by the First Supplemental Indenture, dated as of January 24, 2002,
among the Company, the Guarantors and the Trustee, pursuant to which the Notes
are to be issued, as such Indenture and First Supplemental Indenture are amended
or supplemented from time to time in accordance with the terms thereof.

          INITIAL NOTES: The 8 7/8% Senior Secured Notes due 2009, of the same
series under the Indenture as the Exchange Notes, for so long as such securities
constitute Transfer Restricted Securities.

          INITIAL PLACEMENT: The issuance and sale by the Company of the Initial
Notes to the Initial Purchasers pursuant to the Purchase Agreement.

          INITIAL PURCHASER: As defined in the preamble hereto.

                                        2


          INTEREST PAYMENT DATE: As defined in the Indenture and the Notes.

          LIQUIDATED DAMAGES: As defined in Section 5 hereof.

          NASD: National Association of Securities Dealers, Inc.

          NOTES: The Initial Notes and the Exchange Notes.

          PERSON: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.

          PROSPECTUS: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.

          REGISTRATION DEFAULT: As defined in Section 5 hereof.

          REGISTRATION STATEMENT: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Exchange Notes and the related
guarantees pursuant to an Exchange Offer or (b) the registration for resale of
Transfer Restricted Securities pursuant to the Shelf Registration Statement,
which is filed pursuant to the provisions of this Agreement, in each case,
including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.

          SECURITIES ACT: The Securities Act of 1933, as amended.

          SHELF FILING DEADLINE: As defined in Section 4 hereof.

          SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.

          TRUST INDENTURE ACT: The Trust Indenture Act of 1939 (15 U.S.C.
Section 77aaa-77bbbb) as in effect on the date of the Indenture.

          TRANSFER RESTRICTED SECURITIES: Each Initial Note, until the earliest
to occur of (a) the date on which such Note has been exchanged by a Person other
than a broker-dealer for an Exchange Note in the Exchange Offer, (b) following
the exchange by a broker-dealer in the Exchange Offer of an Initial Note for an
Exchange Note, the date on which such Exchange Note is sold to a purchaser who
receives from such broker-dealer on or prior to the date of such sale a copy of
the Prospectus contained in the Exchange Offer Registration Statement, (c) the
date on which such Initial Note has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement; or (d) the date on which such Initial Note is distributed to the
public pursuant to Rule 144 under the Securities Act.

          UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.

                                        3


SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT

     (a) TRANSFER RESTRICTED SECURITIES. The securities entitled to the benefits
of this Agreement are the Transfer Restricted Securities.

     (b) HOLDERS OF TRANSFER RESTRICTED SECURITIES. A Person is deemed to be a
holder of Transfer Restricted Securities (each, a "HOLDER") whenever such Person
owns Transfer Restricted Securities.

SECTION 3. REGISTERED EXCHANGE OFFER

     (a) Unless the Exchange Offer shall not be permissible under applicable law
or Commission policy (after the procedures set forth in Section 6(a) below have
been complied with), the Company and the Guarantors shall (i) use their best
efforts to cause to be filed with the Commission on or prior to 120 days after
the Closing Date, a Registration Statement under the Securities Act relating to
the Exchange Notes and the Exchange Offer, (ii) use their commercially
reasonable efforts to cause such Registration Statement to become effective on
or prior to 200 days after the Closing Date, (iii) in connection with the
foregoing, file (A) all pre-effective amendments to such Registration Statement
as may be necessary in order to cause such Registration Statement to become
effective, (B) if applicable, a post-effective amendment to such Registration
Statement pursuant to Rule 430A under the Securities Act and (C) cause all
necessary filings in connection with the registration and qualification of the
Exchange Notes to be made under the Blue Sky laws of such jurisdictions as are
necessary to permit Consummation of the Exchange Offer, and (iv) upon the
effectiveness of such Registration Statement, commence the Exchange Offer. The
Exchange Offer shall be on the appropriate form permitting registration of the
Exchange Notes to be offered in exchange for the Transfer Restricted Securities
and to permit resales of Broker-Dealer Transfer Restricted Securities by
Broker-Dealers as contemplated by Section 3(c) below.

     (b) The Company and the Guarantors shall cause the Exchange Offer
Registration Statement to be effective continuously and shall keep the Exchange
Offer open for a period of not less than the minimum period required under
applicable federal and state securities laws to Consummate the Exchange Offer;
provided, however, that in no event shall such period be less than 20 Business
Days. The Company and the Guarantors shall cause the Exchange Offer to comply
with all applicable federal and state securities laws. No securities other than
the Notes shall be included in the Exchange Offer Registration Statement. The
Company and the Guarantors shall use their commercially reasonable efforts to
cause the Exchange Offer to be Consummated within 40 days after the Exchange
Offer Registration Statement has become effective

     (c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus forming a part of the Exchange Offer Registration
Statement that any Broker-Dealer who holds Initial Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company or one of its
Affiliates), may exchange such Initial Notes pursuant to the Exchange Offer;
however, such Broker-Dealer may be deemed to be an "underwriter" within the
meaning of the Securities Act and must, therefore, deliver a prospectus meeting
the requirements of the Securities Act in connection with any resales of the

                                        4


Exchange Notes received by such Broker-Dealer in the Exchange Offer, which
prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement. Such "Plan of Distribution" section shall also contain all other
information with respect to such resales by Broker-Dealers that the Commission
may require in order to permit such resales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the amount of
Notes held by any such Broker-Dealer except to the extent required by the
Commission as a result of a change in policy after the date of this Agreement.

          The Company and the Guarantors shall use their commercially reasonable
efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
6(c) below to the extent necessary to ensure that it is available for resales of
Broker-Dealer Transfer Restricted Securities acquired by Broker-Dealers, and to
ensure that it conforms with the requirements of this Agreement, the Securities
Act and the policies, rules and regulations of the Commission as announced from
time to time, for a period ending on the earlier of (i) 90 days from the date on
which the Exchange Offer Registration Statement is declared effective and (ii)
the date on which a Broker-Dealer is no longer required to deliver a prospectus
in connection with market-making or other trading activities.

          The Company shall provide sufficient copies of the latest version of
such Prospectus to such Broker-Dealers promptly upon request at any time during
such 90-day (or shorter as provided in the foregoing sentence) period in order
to facilitate such resales.

SECTION 4. SHELF REGISTRATION

     (a) SHELF REGISTRATION. If (i) the Company and the Guarantors are not
permitted to consummate the Exchange Offer because the Exchange Offer is not
permitted by applicable law or Commission policy (after the procedures set forth
in Section 6(a) below have been complied with), or (ii) any Holder of Transfer
Restricted Securities shall notify the Company on or prior to the 20th day
following the Consummation of the Exchange Offer that (A) such Holder is
prohibited by applicable law or Commission policy from participating in the
Exchange Offer, (B) such Holder may not resell the Exchange Notes acquired by it
in the Exchange Offer to the public without delivering a prospectus and that the
Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such Holder, or (C) such Holder is
a Broker-Dealer and owns Notes acquired directly from the Company or an
affiliate of the Company, then, the Company and the Guarantors shall:

          (x) use their best efforts to cause to be filed a shelf registration
     statement pursuant to Rule 415 under the Securities Act, which may be an
     amendment to the Exchange Offer Registration Statement (in either event,
     the "SHELF REGISTRATION STATEMENT") on or prior to 60 days after such
     filing obligation arises pursuant to this paragraph 4(a), (such date being
     the "SHELF FILING DEADLINE"), which Shelf Registration Statement shall
     provide for resales of all Transfer Restricted Securities the Holders of
     which shall have provided the information required pursuant to Section 4(b)
     hereof; and

                                        5


          (y) use their commercially reasonable efforts to cause such Shelf
     Registration Statement to be declared effective by the Commission on or
     prior to 120 days after such filing obligation arises pursuant to paragraph
     4(a) above.

The Company and the Guarantors shall use their commercially reasonable efforts
to keep such Shelf Registration Statement continuously effective, supplemented
and amended as required by the provisions of Sections 6(b) and (c) hereof to the
extent necessary to ensure that it is available for resales of Notes by the
Holders of Transfer Restricted Securities entitled to the benefit of this
Section 4(a), and to ensure that it conforms with the requirements of this
Agreement, the Securities Act and the policies, rules and regulations of the
Commission as announced from time to time, for a period of at least two years
following the effective date of such Shelf Registration Statement (or shorter
period that will terminate when all the Notes covered by such Shelf Registration
Statement have been sold pursuant to such Shelf Registration Statement).

     (b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH THE
SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, such
information as the Company may reasonably request for use in connection with any
Shelf Registration Statement or Prospectus or preliminary Prospectus included
therein. Each Holder as to which any Shelf Registration Statement is being
effected agrees to furnish promptly to the Company all information required to
be disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading.

SECTION 5. LIQUIDATED DAMAGES

           If (i) any of the Registration Statements required by this Agreement
is not filed with the Commission on or prior to the date specified for such
filing in this Agreement, (ii) any of such Registration Statements has not been
declared effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement, (iii) the Exchange Offer has not been
Consummated within 40 days after the Exchange Offer Registration Statement is
declared effective or (iv) any Registration Statement required by this Agreement
is filed and declared effective but shall thereafter cease to be effective or
fail to be usable for its intended purpose without being succeeded immediately
by a post-effective amendment to such Registration Statement that cures such
failure and that is itself immediately declared effective (each such event
referred to in clauses (i) through (iv), a "REGISTRATION DEFAULT"), the Company
and the Guarantors hereby agree to pay liquidated dames to each Holder of
outstanding Notes ("LIQUIDATED DAMAGES") during the period of one or more
Registration Defaults, with respect to the first 90-day period immediately
following the occurrence of the first Registration Default in an amount equal to
0.25% per annum (which amount will be increased by an additional 0.25% per annum
for each subsequent 90-day period that any liquidated damages continue to
accrue; provided that the amounts at which liquidated damages accrue may in no
event exceed 1.0% per annum) in respect of the Transfer Restricted Securities
held by such Holder until the applicable Registration Statement is filed, the
Exchange Offer Registration Statement is declared effective and the Exchange
Offer is Consummated or the Shelf Registration Statement is declared effective
or again becomes effective, as the case may be. All accrued Liquidated Damages
will be paid by the Company and the Guarantors on each Interest Payment Date to
Holders of global

                                       6


Notes by wire transfer of immediately available funds or by federal funds check
and to holders of certificated Notes by wire transfer to the accounts specified
by them or by mailing checks to their registered addresses if no such accounts
have been specified. Following the cure of all Registration Defaults, the
accrual of Liquidated Damages will cease; provided, however, that, if after the
cessation of the accrual of Liquidated Damages, a different Registration Default
occurs, Liquidated Damages shall again accrue pursuant to the foregoing
provisions.

           All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such Note
shall have been satisfied in full.

SECTION 6. REGISTRATION PROCEDURES

     (a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the Exchange
Offer, the Company and the Guarantors shall comply with the applicable
provisions of Section 6(c) below, shall use their commercially reasonable
efforts to effect such exchange to permit the sale of Broker-Dealer Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof (which shall be in a manner consistent with the
terms of this Agreement), and shall comply with all of the following provisions:

          (i) If in the reasonable opinion of counsel to the Company there is a
question as to whether the Exchange Offer is permitted by applicable law, the
Company and the Guarantors hereby agree to seek a no-action letter or other
favorable decision from the Commission allowing the Company and the Guarantors
to Consummate an Exchange Offer for such Initial Notes. The Company and the
Guarantors each hereby agree to pursue the issuance of such a decision to the
Commission staff level but shall not be required to take commercially
unreasonable action to effect a change of Commission policy. The Company and the
Guarantors each hereby agree, however, to (A) participate in telephonic
conferences with the staff of Commission, (B) deliver to the Commission staff an
analysis prepared by counsel to the Company setting forth the legal bases, if
any, upon which such counsel has concluded that such an Exchange Offer should be
permitted and (C) use commercially reasonable efforts to diligently pursue a
favorable resolution by the Commission staff of such submission.

          (ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Company, prior to the
Consummation thereof, a written representation to the Company (which may be
contained in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an affiliate of the
Company, (B) it is not engaged in, and does not intend to engage in, and has no
arrangement or understanding with any person to participate in, a distribution
of the Exchange Notes to be issued in the Exchange Offer and (C) it is acquiring
the Exchange Notes in its ordinary course of business. In addition, all such
Holders of Transfer Restricted Securities shall otherwise cooperate in the
Company's and the Guarantor's preparations for the Exchange Offer. Each Holder
hereby acknowledges and agrees that any Broker-Dealer and any such Holder using
the Exchange Offer to participate in a distribution of the securities to be
acquired in the Exchange Offer (1) could not under Commission policy as in
effect on the date of this Agreement rely on the position of the Commission

                                        7


enunciated in MORGAN STANLEY AND CO., INC. (available June 5, 1991) and EXXON
CAPITAL HOLDINGS CORPORATION (available May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993, and similar
no-action letters (which may include any no-action letter obtained pursuant to
clause (i) above), and (2) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with a secondary
resale transaction and that such a secondary resale transaction should be
covered by an effective registration statement containing the selling security
holder information required by Item 507 or 508, as applicable, of Regulation S-K
if the resales are of Exchange Notes obtained by such Holder in exchange for
Initial Notes acquired by such Holder directly from the Company.

          (iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental letter to
the Commission (A) stating that the Company and the Guarantors are registering
the Exchange Offer in reliance on the position of the Commission enunciated in
Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley and
Co., Inc. (available June 5, 1991) and, if applicable, any no-action letter
obtained pursuant to clause (i) above, (B) including a representation that
neither the Company nor any Guarantor has entered into any arrangement or
understanding with any Person to distribute the Initial Notes to be received in
the Exchange Offer and that, to the best of the Company's information and
belief, each Holder participating in the Exchange Offer is acquiring the Initial
Notes in its ordinary course of business and has no arrangement or understanding
with any Person to participate in the distribution of the Initial Notes received
in the Exchange Offer and (C) any other undertaking or representation required
by the Commission as set forth in any no-action letter obtained pursuant to
clause (i) above.

     (b) SHELF REGISTRATION STATEMENT. In connection with the Shelf Registration
Statement, the Company and the Guarantors shall comply with all the provisions
of Section 6(c) below and shall use their commercially reasonable efforts to
effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and pursuant thereto the Company will as expeditiously as
possible prepare and file with the Commission a Registration Statement relating
to the registration on any appropriate form under the Securities Act, which form
shall be available for the sale of the Transfer Restricted Securities in
accordance with the intended method or methods of distribution thereof.

     (c) GENERAL PROVISIONS. In connection with any Registration Statement and
any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Securities (including, without limitation, any Exchange
Offer Registration Statement and the related Prospectus required to permit
resales of Broker-Dealer Transfer Restricted Securities by Broker-Dealers), the
Company and the Guarantors shall:

          (i) use their commercially reasonable efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements (including, if required by the Securities Act or any
regulation thereunder, financial statements of the Guarantors) for the period
specified in Section 3 or 4 of this Agreement, as applicable; upon the
occurrence of any event that would cause any such Registration Statement or the
Prospectus contained therein (A) to contain a material misstatement or omission
or (B) not to be effective and usable for resale of Transfer Restricted
Securities during the period required by this Agreement, the Company shall

                                        8


file promptly an appropriate amendment to such Registration Statement, in the
case of clause (A), correcting any such misstatement or omission, and, in the
case of either clause (A) or (B), use their commercially reasonable efforts to
cause such amendment to be declared effective and such Registration Statement
and the related Prospectus to become usable for their intended purpose(s) as
soon as practicable thereafter;

          (ii) use commercially reasonable efforts to prepare and file with the
Commission such amendments and post-effective amendments to the Registration
Statement as may be necessary to keep the Registration Statement effective for
the applicable period set forth in Section 3 or 4 hereof, as applicable, or such
shorter period as will terminate when all Transfer Restricted Securities covered
by such Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Securities Act, and to comply fully with
the applicable provisions of Rules 424 and 430A under the Securities Act in a
timely manner; and comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such Registration Statement
during the applicable period in accordance with the intended method or methods
of distribution by the sellers thereof set forth in such Registration Statement
or supplement to the Prospectus;

          (iii) advise the underwriter(s), if any, and selling Holders promptly
and, if requested by such Persons, to confirm such advice in writing, (A) when
the Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to any Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating thereto,
(C) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Securities Act or of the
suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any statement of
a material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Company and
the Guarantors shall use their commercially reasonable efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;

          (iv) in the case of a Shelf Registration Statement, furnish without
charge to each of the Initial Purchasers, each selling Holder named in any
Registration Statement, and each of the underwriter(s), if any, before filing
with the Commission, copies of any Registration Statement or any Prospectus
included therein or any amendments or supplements to any such Registration
Statement or Prospectus (including all documents incorporated by reference after
the initial filing of such Registration Statement), which documents will be
subject to the review of such Holders and underwriter(s) in connection with such
sale, if any, for a period of at least three

                                        9


Business Days, and neither the Company nor the Guarantors will file any such
Registration Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents incorporated
by reference) to which an Initial Purchaser or the underwriter(s), if any, shall
reasonably object in writing within five Business Days after the receipt thereof
(such objection to be deemed timely made upon confirmation of telecopy
transmission within such period). The objection of an Initial Purchaser or
underwriter, if any, shall be deemed to be reasonable if such Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed to be
filed, contains a material misstatement or omission;

          (v) in connection with any underwritten offering pursuant to a Shelf
Registration Statement, promptly prior to the filing of any document that is to
be incorporated by reference into a Shelf Registration Statement or Prospectus,
provide copies of such document to the Initial Purchasers, each selling Holder
named in any Shelf Registration Statement, and to the underwriter(s), if any,
make the Company's representatives and representatives of the Guarantors
available for discussion of such document and other customary due diligence
matters, and include such information in such document prior to the filing
thereof as such selling Holders or underwriter(s), if any, reasonably may
request;

          (vi) in connection with any underwritten offering pursuant to a Shelf
Registration Statement, make available at reasonable times during normal
business hours for inspection by the Initial Purchasers, any managing
underwriter participating in any disposition pursuant to such Registration
Statement and any attorney or accountant retained by such Initial Purchasers or
any of the underwriter(s), all financial and other records, pertinent corporate
documents and properties of the Company and the Guarantors and cause the
Company's and the Guarantors' officers, directors and employees to supply all
information reasonably requested by any such Holder, underwriter, attorney or
accountant in connection with such Registration Statement subsequent to the
filing thereof and prior to its effectiveness;

          (vii) if requested by any selling Holders or the underwriter(s), if
any, promptly incorporate in any Registration Statement or Prospectus, pursuant
to a supplement or post-effective amendment if necessary, such information as
such selling Holders and underwriter(s), if any, may reasonably request to have
included therein, including, without limitation, information relating to the
"Plan of Distribution" of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities being sold to
such underwriter(s), the purchase price being paid therefor and any other terms
of the offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Company or a Guarantor
is notified of the matters to be incorporated in such Prospectus supplement or
post-effective amendment;

          (viii) furnish to each selling Holder and each of the underwriter(s),
if any, without charge, at least one copy of the Registration Statement, as
first filed with the Commission, and of each amendment thereto, including
financial statements and schedules, all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by reference);

                                       10


          (ix) deliver to each selling Holder and each of the underwriter(s), if
any, without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such Persons
reasonably may request; the Company and the Guarantors hereby consent to the use
of the Prospectus and any amendment or supplement thereto by each of the selling
Holders and each of the underwriter(s), if any, in connection with the offering
and the sale of the Transfer Restricted Securities covered by the Prospectus or
any amendment or supplement thereto;

          (x) in connection with any underwritten offering of Transfer
Restricted Securities pursuant to a Shelf Registration Statement, enter into,
and cause the Guarantors to enter into, such agreements (including an
underwriting agreement), and make, and cause the Guarantors to make, such
representations and warranties, and take all such other actions in connection
therewith reasonably necessary to expedite or facilitate the disposition of the
Transfer Restricted Securities, all to such extent as may be reasonably
requested by any Holder of Transfer Restricted Securities or underwriter in
connection with any sale or resale pursuant to underwritten offerings of
Transfer Restricted Securities pursuant to a Shelf Registration Statement
contemplated by this Agreement and shall:

        (A) furnish to each Initial Purchaser, each selling Holder and each
    underwriter, if any, in such substance and scope as they may reasonably
    request and as are customarily made by issuers to underwriters in primary
    underwritten offerings, upon the date of the Consummation of the Exchange
    Offer and, if applicable, the effectiveness of the Shelf Registration
    Statement:

            (1) a certificate, dated the date of effectiveness of the Shelf
        Registration Statement, signed by (y) the Chairman of the Board, the
        Chief Executive Officer, President, any Executive Vice President or any
        Vice President and (z) a principal financial or accounting officer of
        each of the Company and Owens-Illinois Group, Inc., confirming, as of
        the date thereof, the matters set forth in paragraphs (i), (ii) and
        (iii) of Section 5 (e) of the Purchase Agreement or such other matters
        as such parties may reasonably request;

            (2) opinions, dated the date of effectiveness of the Shelf
        Registration Statement of counsel for the Company and the Guarantors,
        covering the matters set forth in paragraph (c) of Section 5 of the
        Purchase Agreement and Exhibits B and C referred to therein and such
        other matters as such parties may reasonably request; and

            (3) a customary comfort letter, dated as of the date of
        effectiveness of the Shelf Registration Statement from the Company's
        independent accountants, in the customary form and covering matters of
        the type customarily covered in comfort letters by underwriters in
        connection with primary underwritten offerings, and affirming the
        matters set forth in the comfort letter delivered pursuant to Section
        5(a) of the Purchase Agreement;

        (B) set forth in full or incorporate by reference in the underwriting
    agreement, if any, indemnification provisions and procedures of Section 8
    hereof with respect to all

                                       11


    parties to be indemnified pursuant to said Section (or such other provisions
    or procedures acceptable to selling Holders representing a majority in
    aggregate principal amount of Transfer Restricted Securities covered by such
    Shelf Registration Statement and the Underwriters, if any); and

        (C) deliver such other documents and certificates as may be reasonably
    requested by such parties to evidence compliance with clause (A) above and
    with any customary conditions contained in the underwriting agreement or
    other agreement entered into by the Company or the Guarantors pursuant to
    this clause (xi), if any.

          If at any time the representations and warranties of the Company and
the Guarantors contemplated in clause (A)(1) above cease to be true and correct
in all material respects, the Company or the Guarantors shall so advise the
Initial Purchasers and the underwriter(s), if any, and each selling Holder
promptly and, if requested by such Persons, shall confirm such advice in
writing;

          (xi) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders, the underwriter(s), if any, and their
respective counsel in connection with the registration and qualification of the
Transfer Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders or underwriter(s) may request and do any
and all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Transfer Restricted Securities covered by the Shelf
Registration Statement; PROVIDED, HOWEVER, that neither the Company nor the
Guarantors shall be required to register or qualify as a foreign corporation
where it is not then so qualified or to take any action that would subject it to
the service of process in suits or to taxation, other than as to matters and
transactions relating to any Registration Statement, in any jurisdiction where
it is not then so subject;

          (xii) shall issue, upon the request of any Holder of Initial Notes
covered by the Shelf Registration Statement, Exchange Notes, having an aggregate
principal amount equal to the aggregate principal amount of Initial Notes
surrendered to the Company by such Holder in exchange therefor or being sold by
such Holder; such Exchange Notes to be registered in the name of such Holder or
in the name of the purchaser(s) of such Notes, as the case may be; in return,
the Initial Notes held by such Holder shall be surrendered to the Company for
cancellation;

          (xiii) cooperate with the selling Holders and the underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be in
such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two Business Days prior to any sale
of Transfer Restricted Securities made by such underwriter(s);

          (xiv) use their commercially reasonable efforts to cause the Transfer
Restricted Securities covered by the Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter(s), if any,
to consummate the disposition of such Transfer Restricted Securities, subject to
the proviso contained in clause (xii) above;

                                       12


          (xv) if any fact or event contemplated by clause (c)(iii)(D) above
shall exist or have occurred, prepare a supplement or post-effective amendment
to the Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading;

          (xvi) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of the Registration Statement and provide the
Trustee under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with the
Depositary Trust Company;

          (xvii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is required
to be retained in accordance with the rules and regulations of the NASD, and use
their commercially reasonable efforts to cause such Registration Statement to
become effective and approved by such governmental agencies or authorities as
may be necessary to enable the Holders selling Transfer Restricted Securities to
consummate the disposition of such Transfer Restricted Securities;

          (xviii) otherwise use their commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission, and make generally
available to the Company's security holders, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158 (which need
not be audited) for the twelve-month period (A) commencing at the end of any
fiscal quarter in which Transfer Restricted Securities are sold to underwriters
in a firm or best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
Registration Statement;

          (xix) cause the Indenture to be qualified under the Trust Indenture
Act not later than the effective date of the first Registration Statement
required by this Agreement, and, in connection therewith, cooperate, and cause
the Guarantors to cooperate with, with the Trustee and the Holders of Notes to
effect such changes to the Indenture as may be required for such Indenture to be
so qualified in accordance with the terms of the Trust Indenture Act; and to
execute, and use their commercially reasonable efforts to cause the Trustee to
execute, all documents that may be required to effect such changes and all other
forms and documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner; and

          (xx) provide promptly to each Holder upon request each document filed
with the Commission pursuant to the requirements of Section 13 and Section 15 of
the Exchange Act or provide each such requesting Holder the location where such
Holder can obtain such information without charge.

          Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company or any Guarantor of the
existence of any fact of the kind described in Section 6(c)(iii)(D) hereof, such
Holder will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement until such

                                       13


Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 6(c)(xvi) hereof, or until it is advised in writing (the
"ADVICE") by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings that are incorporated
by reference in the Prospectus. If so directed by the Company, each Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of such notice. In the event the Company or any Guarantor shall give any
such notice, the time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to Section 6(c)(iii)(D) hereof to and including
the date when each selling Holder covered by such Registration Statement shall
have received the copies of the supplemented or amended Prospectus contemplated
by Section 6(c)(xvi) hereof or shall have received the Advice; however, no such
extension shall be taken into account in determining whether Liquidated Damages
are due pursuant to Section 5 hereof or the amount of such Liquidated Damages,
it being agreed that the Company's and the Guarantor's option to suspend use of
a Registration Statement pursuant to this paragraph shall be treated as a
Registration Default for purposes of Section 5.

SECTION 7. REGISTRATION EXPENSES

     (a) All expenses incident to the Company's or the Guarantors' performance
of or compliance with this Agreement will be borne by the Company or the
Guarantors, regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and expenses
(including filings made by any Initial Purchaser or Holder with the NASD (and,
if applicable, the fees and expenses of any "qualified independent underwriter"
and its counsel that may be required by the rules and regulations of the NASD));
(ii) all fees and expenses of compliance with federal securities and state Blue
Sky or securities laws; (iii) all expenses of printing (including printing
certificates for the Exchange Notes to be issued in the Exchange Offer and
printing of Prospectuses), messenger and delivery services and telephone; (iv)
all fees and disbursements of counsel for the Company, the Guarantors and,
subject to Section 7(b) below, the Holders of Transfer Restricted Securities;
(v) all application and filing fees in connection with listing the Exchange
Notes on a national securities exchange or automated quotation system pursuant
to the requirements thereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company and the Guarantors (including the
expenses of any special audit and comfort letters required by or incident to
such performance).

          The Company and the Guarantors will, in any event, bear their internal
expenses (including, without limitation, all salaries and expenses of their
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.

     (b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities being tendered in the Exchange Offer and/or resold pursuant to the
"Plan of Distribution" contained in the Exchange Offer Registration

                                       14


Statement or registered pursuant to the Shelf Registration Statement, as
applicable, for the reasonable fees and disbursements of not more than one
counsel, who shall be Simpson Thacher & Bartlett or such other counsel as may be
chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared.

SECTION 8. INDEMNIFICATION.

     (a) INDEMNIFICATION OF THE HOLDERS. The Company and each Guarantor, jointly
and severally, agree to indemnify and hold harmless each Holder, its directors,
officers and employees, and each person, if any, who controls any Holder within
the meaning of the Securities Act and the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which such Holder or such
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company or Owens-Illinois Group, Inc.),
insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof as contemplated below) arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or Prospectus, or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that the foregoing indemnity agreement shall not apply to any
loss, claim, damage, liability or expense to the extent, but only to the extent,
arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by the Holders expressly for use in
any Registration Statement or Prospectus; PROVIDED, FURTHER, that the foregoing
indemnity agreement shall not inure to the benefit of any Holder, its directors,
officers and employees, and each person, if any, who controls such Holder within
the meaning of the Securities Act and the Exchange Act, who, in contravention of
a requirement of applicable law, failed to deliver, or otherwise convey the
information contained in, any Prospectus (as then amended or supplemented) to
the person asserting any losses, claims, damages, liabilities or expenses,
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such material
misstatement or omission or alleged material misstatement or omission was cured
in the Prospectus (as then amended or supplemented) and such Prospectus was
required by law to be delivered at or prior to the written confirmation of sale
to such person and the Prospectus and any amendment or supplement thereto was
provided by the Company to the Holder in the requisite quantity and on a timely
basis to permit proper delivery on or prior to the closing of such sale by such
Holder. The indemnity agreement set forth in this Section 8 shall be in addition
to any liabilities that the Company or any of the Guarantors may otherwise have.

     (b) INDEMNIFICATION OF THE COMPANY, THE GUARANTORS AND THEIR DIRECTORS AND
OFFICERS. Each Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company and the Guarantors and each of their respective directors,
and each person, if any, who controls the Company or the Guarantors, as the case
may be, within the meaning of the Securities Act or the Exchange Act, against
any loss, claim, damage, liability or expense, as incurred, to which the

                                       15


Company or such Guarantor or any such director, or controlling person may become
subject, under the Securities Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Holder), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or Prospectus, or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Registration Statement or Prospectus, in reliance upon
and in conformity with written information furnished to the Company by the
Holders expressly for use therein; and to reimburse the Company and the
Guarantors, or any such director or controlling person for any legal and other
expenses reasonably incurred by the Company and the Guarantors, or any such
director or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action. The indemnity agreement set forth in this Section 8 shall be
in addition to any liabilities that each Holder may otherwise have. In no event
shall the liability of any selling Holder hereunder be greater in amount than
the dollar amount of proceeds received by such Holder upon the sale of the
Securities giving rise to such indemnification obligation.

     (c) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES. Promptly after
receipt by any person in respect of which indemnity may be sought pursuant to
Section 8(a) or 8(b) (the "INDEMNIFIED PARTY") of notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against any person against whom indemnity may be sought pursuant to Section
8(a) or 8(b) (the "INDEMNIFYING PARTY"), notify the indemnifying party in
writing of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party for contribution or otherwise than under the indemnity
agreement contained in this Section 8 or to the extent it is not prejudiced as a
proximate result of such failure. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party shall be entitled to
participate in and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; PROVIDED, HOWEVER, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded, based on the advice
of legal counsel, that a conflict may arise between the positions of the
indemnifying party and the indemnified party in conducting the defense of any
such action or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
shall not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such

                                       16


indemnified party in connection with the defense thereof unless the indemnified
party shall have employed separate counsel in accordance with the proviso to the
next preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate counsel
(together with local counsel), approved by the indemnifying party, representing
the indemnified parties who are parties to such action) or (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.

     (d) SETTLEMENTS. The indemnifying party under this Section 8 shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by this
Section 8, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.

     (e) CONTRIBUTION. If the indemnification provided for in this Section 8 is
for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party under Section 8(a) or Section 8(b) hereof (other
than by reason of exceptions provided in those Sections) in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party, as incurred, as a result of any losses, claims, damages,
liabilities or expenses referred to therein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors, on the one hand, and the Holders, on the other hand, from the
Initial Placement (which, in the case of the Company and the Guarantors shall be
deemed to be equal to the total gross proceeds from the Initial Placement as set
forth on the cover page to the Offering Memorandum), the amount of Liquidated
Damages which did not become payable as a result of the filing of the
Registration Statement resulting in such losses, claims, damages, liabilities,
judgments actions or expenses, and such Registration Statement, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Guarantors, on the one hand, and the Holders, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Guarantors, on the one hand, and the Holders,

                                       17


on the other, with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from Initial Placement (before deducting
expenses) received by the Company and the Guarantors, on the one hand, and the
total net proceeds received by such Holder upon its resale of Notes less the
amount paid by such Holder for such Notes, on the other hand, bear to the total
sum of such amounts. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company and the Guarantors or such Holder, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. For the purposes
of the preceding two sentences, the net proceeds deemed to be received by the
Company shall be deemed to be also for the benefit of the Guarantors and the
information supplied by the Company shall also be deemed to have been supplied
by the Guarantors.

          The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(a), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in this
Section 8 with respect to notice of commencement of any action shall apply if a
claim for contribution is to be made under this Section 8(e); PROVIDED, HOWEVER,
that no additional notice shall be required with respect to any action for which
notice has been given under this Section 8 for purposes of indemnification.

          The Company, the Guarantors and the Holders agree that it would not be
just and equitable if contribution pursuant to this Section 8(e) were determined
by pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 8(e). Notwithstanding the
provisions of this Section 8(e), no Holder shall be required to contribute any
amount in excess of the amount by which the total net proceeds received by such
Holder upon its resale of Initial Notes exceeds the sum of the amount paid by
such Holder for such Initial Notes (or, if such Initial Notes have not been sold
by such Holder, the total discount received by such Holder with respect to such
Initial Notes) and the amount of any damages which such Holder has otherwise
paid or become liable to pay by reason of any untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11 of the Securities Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute pursuant to
this Section 8(e) are several, and not joint, in proportion to the respective
principal amount of Initial Notes held by each of the Holders hereunder. For
purposes of this Section 8(e), each director, officer and employee of an Holder
and each person, if any, who controls an Holder within the meaning of the
Securities Act and the Exchange Act shall have the same rights to contribution
as such Holder, and each director of the Company and the Guarantors, and each
person, if any, who controls the Company with the meaning of the Securities Act
and the Exchange Act shall have the same rights to contribution as the Company
and the Guarantors.

     (f) The remedies provided for in this Section 8 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.

                                       18


SECTION 9.  RULE 144A

            The Company and the Guarantors each hereby agree with each Holder,
for so long as any Transfer Restricted Securities remain outstanding, to make
available to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act in order to permit resales
of such Transfer Restricted Securities pursuant to Rule 144A.

SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS

            No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.

SECTION 11. SELECTION OF UNDERWRITERS

            The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering shall be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; PROVIDED, that such investment bankers and managers must be
reasonably satisfactory to the Company.

SECTION 12. MISCELLANEOUS

     (a) REMEDIES. The Company and the Guarantors each hereby agree that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby agree to
waive the defense in any action for specific performance that a remedy at law
would be adequate.

     (b) NO INCONSISTENT AGREEMENTS. The Company shall not, and shall cause the
Guarantors not to, on or after the date of this Agreement enter into any
agreement with respect to the Company's securities that would prevent the
Company or any Guarantor from satisfying its obligations hereunder or that would
otherwise conflict with the provisions hereof. Neither the Company nor any of
the Guarantors has entered into any agreement granting any registration rights
with respect to the Company's securities to any Person. The rights granted to
the Holders hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the holders of the Company's securities under any
agreement in effect on the date hereof.

     (c) ADJUSTMENTS AFFECTING THE NOTES. The Company shall not take any action,
or permit any change to occur, with respect to the Notes that would materially
and adversely affect the ability of the Holders to Consummate any Exchange
Offer.

                                       19


     (d) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered; provided that, with
respect to any matter that directly or indirectly affects the rights of any
Initial Purchaser hereunder, the Company shall obtain the written consent of
each such Initial Purchaser with respect to which such amendment, qualification,
supplement, waiver, consent or departure is to be effective.

     (e) NOTICES. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:

            (i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the Indenture;
and

            (ii) if to the Company:

                        Owen-Brockway Glass Container Inc.
                        One SeaGate Toledo,
                        OH 43666 Telecopier No.: 419-247-1218
                        Attention: Treasurer

                 With a copy to:

                        Latham & Watkins
                        505 Montgomery Street, Suite 1900
                        San Francisco, CA 94111
                        Telecopier No.: 415-395-8095
                        Attention:  Tracy K. Edmonson, Esq.

            All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.

            Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

                                       20


     (f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Transfer Restricted Securities; provided, however, that this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder.

     (g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

     (h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     (i) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

     (j) ENTIRE AGREEMENT. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company and the
Guarantors with respect to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

     (k) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. -

                                       21



            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.

                               OWENS-BROCKWAY GLASS CONTAINER INC.

                               By:   /s/ James W. Baehren
                                  -------------------------------------------
                                         Name:  James W. Baehren
                                         Title: Vice President

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

                               By:   /s/ James W. Baehren
                                  -------------------------------------------
                                         Name:  James W. Baehren

The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.

BANC OF AMERICA SECURITIES LLC
GOLDMAN, SACHS & CO.
DEUTSCHE BANC ALEX. BROWN INC.
MORGAN STANLEY & CO. INCORPORATED
SCOTIA CAPITAL (USA) INC.

By:  BANC OF AMERICA SECURITIES LLC

      By:  /s/ Stephan T. Jaeger
           -----------------------------------
           Name:  Stephan T. Jaeger
           Title: Vice President

                                       22


                                                                       EXHIBIT A

                                                TITLE OF OFFICER EXECUTING ON
                                                    BEHALF OF SUCH ENTITY
         NAME OF ENTITY

Owens-Illinois Group, Inc.                      Vice President, Director of
                                                Finance and Secretary

OI General FTS Inc.                             Vice President and Secretary

OI Plastic Products FTS Inc.                    Vice President and Secretary

O-I Health Care Holding Corp.                   Vice President and Secretary

OI General Finance Inc.                         Vice President and Secretary

Specialty Packaging Licensing Company           Vice President and Secretary

Owens-Illinois Closure Inc.                     Vice President and Secretary

Product Design & Engineering, Inc.              Vice President and Secretary

OI Brazil Closure Inc.                          Vice President and Secretary

Owens-Illinois Prescription Products Inc.       Vice President and Secretary

OI Medical Inc.                                 Vice President and Secretary

MARC Industries, Inc.                           Vice President and Secretary

OI Medical Holdings Inc.                        Vice President and Secretary

Anamed International, Inc.                      Vice President and Secretary

Martell Medical Products, Incorporated          Vice President and Secretary

Owens-BriGam Medical Company                    Vice President and Secretary
                                                of each general partner

BriGam, Inc.                                    Vice President and Secretary

BriGam Medical, Inc.                            Vice President and Secretary

BriGam Ventures, Inc.                           Vice President and Secretary

Owens-Brockway Plastic Products Inc.            Vice President and Secretary

Owens-Illinois Specialty Products Puerto        Vice President and Secretary
Rico, Inc.

                                      A-1


                                                TITLE OF OFFICER EXECUTING ON
                                                    BEHALF OF SUCH ENTITY
         NAME OF ENTITY

OI Regioplast STS Inc.                          Vice President and Secretary

OI Australia Inc.                               Vice President and Secretary

ACI America Holdings Inc.                       Vice President and Secretary

Continental PET Technologies, Inc.              Vice President and Secretary

OI Venezuela Plastic Products Inc.              Vice President and Secretary

OI Castalia STS Inc.                            Vice President and Secretary

OI Levis Park STS Inc.                          Vice President and Secretary

OI AID STS Inc.                                 Vice President and Secretary

Owens-Illinois General Inc.                     Vice President and Secretary

O-I Holding Company, Inc.                       Vice President and Secretary

Universal Materials, Inc.                       Vice President and Secretary

Owens-Brockway Packaging, Inc.                  Vice President and Secretary

Brockway Realty Corporation                     Vice President and Secretary

Brockway Research, Inc.                         Vice President and Secretary

NHW Auburn, LLC                                 Vice President and Secretary
                                                of its sole member

OI Auburn Inc.                                  Vice President and Secretary

Seagate, Inc.                                   Vice President and Secretary

Seagate II, Inc.                                Vice President and Secretary

Seagate III, Inc.                               Vice President and Secretary

Owens-Brockway Glass Container Trading          Vice President and Secretary
Company

OB Cal South Inc.                               Vice President and Secretary

Overseas Finance Company                        Vice President and Secretary

                                      A-2


                                                TITLE OF OFFICER EXECUTING ON
         NAME OF ENTITY                             BEHALF OF SUCH ENTITY

OIB Produvisa Inc.                              Vice President and Secretary

OI Consol STS Inc.                              Vice President and Secretary

OI California Containers Inc.                   Vice President and Secretary

OI Puerto Rico STS Inc.                         Vice President and Secretary

OI Ecuador STS Inc.                             Vice President and Secretary

OI Europe & Asia Inc.                           Vice President and Secretary

OI Peru STS Inc.                                Vice President and Secretary

OI Poland Inc.                                  Vice President and Secretary

OI Hungary Inc.                                 Vice President and Secretary

OI International Holdings Inc.                  Vice President and Secretary

                                      A-3

EX-5.1

                                                                     EXHIBIT 5.1


                         [LATHAM & WATKINS LETTERHEAD]


                                 April 5, 2002


Owens-Brockway Glass Container Inc.
One SeaGate
Toledo, Ohio 43666

            Re:   $1,000,000,000 Aggregate Principal Amount of
                  8 7/8% Senior Secured Notes due 2009
                  --------------------------------------------

Ladies and Gentlemen:

            In connection with the registration of $1,000,000,000 aggregate
principal amount of 8 7/8% Senior Secured Notes due 2009 (the "Securities") by
Owens-Brockway Glass Container Inc., a Delaware corporation (the "Company"), and
the guarantees of the Securities (the "Guarantees") by Owens-Illinois Group,
Inc. ("Group") and the domestic subsidiaries of Group listed on Schedule A
hereto (collectively, and together with Group, the "Guarantors"), under the
Securities Act of 1933, as amended, on Form S-4 filed with the Securities and
Exchange Commission on April 5, 2002 (the "Registration Statement"), you have
requested our opinion with respect to the matters set forth below. The
Securities and the Guarantees will be issued pursuant to an indenture dated as
of January 24, 2002, as supplemented by the First Supplemental Indenture, dated
January 24, 2002 (as supplemented, the "Indenture") by and among the Company,
the Guarantors and U.S. Bank National Association, as trustee (the "Trustee").
The Securities and the Guarantees will be issued in exchange for the Company's
outstanding 8 7/8% Senior Secured Notes due 2009 (the "Outstanding Notes") on
the terms set forth in the prospectus contained in the Registration Statement
and the Letter of Transmittal filed as an exhibit thereto. The Indenture, the
Securities and the Guarantees are sometimes referred to herein collectively
as the "Operative Documents." Capitalized terms used herein without
definition have the meanings assigned to them in the Indenture.

            In our capacity as your special counsel in connection with such
registration, we are familiar with the proceedings taken and proposed to be
taken by the Company and the Guarantors in connection with the authorization
and issuance of the Securities and the Guarantees, respectively. In addition,
we have made such legal and factual examinations and inquiries, including an
examination of originals or copies certified or otherwise identified to our
satisfaction of such documents, corporate records and instruments, as we have
deemed necessary or appropriate for purposes of this opinion.

            In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, and
the conformity to authentic original documents of all documents submitted to us
as copies.

- --------------------------------------------------------------------------------
    505 Montgomery Street, Suite 1900 o San Francisco, California 94111-2562
                 TELEPHONE: (415) 391-0600 o FAX: (415) 395-8095



            We are opining herein as to the effect on the subject transaction
only of the internal laws of the State of New York, and we express no opinion
with respect to the applicability thereto, or the effect thereon, of the laws of
any other jurisdiction or as to any matters of municipal law or the laws of any
local agencies within any state.

            Subject to the foregoing and the other matters set forth herein, it
is our opinion that as of the date hereof:

            1. The Securities, when executed, authenticated and delivered by or
on behalf of the Company against the due tender and delivery to the Trustee
of the Outstanding Notes in an aggregate principal amount equal to the
aggregate principal amount of the Securities, will be the legally valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms.

            2. Each of the Guarantees, when executed in accordance with the
terms of the Indenture and upon due execution, authentication and delivery of
the Securities against the due tender and delivery to the Trustee of the
Outstanding Notes in an aggregate principal amount equal to the aggregate
principal amount of the Securities, will be the legally valid and binding
obligation of the respective Guarantor, enforceable against such Guarantor in
accordance with its terms.

            The opinions rendered in paragraphs 1 and 2 above relating to the
enforceability of the Securities and the Guarantees are subject to the following
exceptions, limitations and qualifications: (i) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting the rights or remedies of creditors, (ii) the
effect of general principles of equity, whether enforcement is considered in a
proceeding in equity or at law, and the discretion of the court before which any
proceeding therefor may be brought; (iii) the unenforceability under certain
circumstances under law or court decisions of provisions providing for the
indemnification of or contribution to a party with respect to a liability where
such indemnification or contribution is contrary to public policy; (iv) the
unenforceability of any provision requiring the payment of attorney's fees,
except to the extent that a court determines such fees to be reasonable; and (v)
we express no opinion concerning the unenforceability of the waiver of rights
and defenses contained in Section 4.06 of the Indenture.

            We have not been requested to express, and with your knowledge and
consent, do not render any opinion as to the applicability to the obligations of
the Company under the Indenture and the Securities or the Guarantors under the
Indenture or the Guarantees of Sections 547 and 548 of the United States
Bankruptcy Code or applicable state law (including, without limitation, Article
10 of the New York Debtor and Creditor Law) relating to preferences and
fraudulent transfers and obligations.

            To the extent that the obligations of the Company and the Guarantors
under the Operative Documents to which each is a party may be dependent upon
such matters, we have assumed for purposes of this opinion that: (i) the
Company, each of the Guarantors and the Trustee (a) is duly organized, validly
existing and in good standing under the laws of its



jurisdiction of organization, (b) has the requisite organizational and legal
power and authority to perform its obligations under each Operative Document to
which it is a party, and (c) has duly authorized, executed and delivered the
Indenture; (ii) each of the Company and the Guarantors has duly authorized the
Securities and the Guarantees, as applicable; (iii) the Indenture constitutes
the legally valid and binding obligation of the Trustee, enforceable against
the Trustee in accordance with its terms; (iv) the Trustee is duly qualified
to engage in the activities contemplated by the Indenture; and (v) the
Trustee is in compliance, generally and with respect to acting as a trustee
under the Indenture, with all applicable laws and regulations.

            We consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm contained under the
heading "Legal Matters" in the prospectus contained therein.

                                       Very truly yours,

                                       /s/ Latham & Watkins

                                       Latham & Watkins






                                   SCHEDULE A


                  ACI America Holdings Inc.
                  Anamed International, Inc.
                  BriGam Medical, Inc.
                  BriGam Ventures, Inc.
                  BriGam, Inc.
                  Brockway Realty Corporation
                  Brockway Research, Inc.
                  Continental PET Technologies, Inc.
                  MARC Industries, Inc.
                  Martell Medical Products, Incorporated
                  NHW Auburn, LLC
                  OB Cal South Inc.
                  OI AID STS Inc.
                  OI Auburn Inc.
                  OI Australia Inc.
                  OI Brazil Closure Inc.
                  OI California Containers Inc.
                  OI Castalia STS Inc.
                  OI Consol STS Inc.
                  OI Ecuador STS Inc.
                  OI Europe & Asia Inc.
                  OI General Finance Inc.
                  OI General FTS Inc.
                  O-I Health Care Holding Corp.
                  O-I Holding Company, Inc.
                  OI Hungary Inc.
                  OI International Holdings Inc.
                  OI Levis Park STS Inc.
                  OI Medical Holdings Inc.
                  OI Medical Inc.
                  OI Peru STS Inc.
                  OI Plastic Products FTS Inc.
                  OI Poland Inc.
                  OI Puerto Rico STS Inc.



                  OI Regioplast STS Inc.
                  OI Venezuela Plastic Products Inc.
                  OIB Produvisa Inc.
                  Overseas Finance Company
                  Owens-BriGam Medical Company
                  Owens-Brockway Glass Container Trading Company
                  Owens-Brockway Packaging, Inc.
                  Owens-Brockway Plastic Products Inc.
                  Owens-Illinois Closure Inc.
                  Owens-Illinois General Inc.
                  Owens-Illinois Prescription Products Inc.
                  Owens-Illinois Specialty Products Puerto Rico, Inc.
                  Product Design & Engineering, Inc.
                  SeaGate II, Inc.
                  SeaGate III, Inc.
                  SeaGate, Inc.
                  Specialty Packaging Licensing Company
                  Universal Materials, Inc.

EX-5.2

                                                                     EXHIBIT 5.2


                        [Owens-Illinois Inc. Letterhead]


                                 April 5, 2002



Owens-Brockway Glass Container Inc.
One SeaGate
Toledo, Ohio  43666

            Re:   $1,000,000,000 Aggregate Principal Amount of
                  8 7/8% Senior Secured Notes due 2009
                  --------------------------------------------

Ladies and Gentlemen:

            I am Vice President and Secretary to Owens-Brockway Glass
Container Inc., a Delaware corporation (the "Company"), and have acted as
counsel to the Company in connection with the registration of $1,000,000,000
aggregate principal amount of the Company's 8 7/8% Senior Secured Notes due
2009 (the "Securities") and the guarantees of the Securities (the
"Guarantees") by Owens-Illinois Group, Inc. ("Group") and the domestic
subsidiaries of Group listed on Schedule A hereto (collectively, and together
with Group, the "Guarantors"), under the Securities Act of 1933, as amended,
on Form S-4 filed with the Securities and Exchange Commission on April 5,
2002 (the "Registration Statement"). You have requested my opinion with
respect to the matters set forth below. The Securities and the Guarantees
will be issued pursuant to an indenture, dated January 24, 2002, as
supplemented by the First Supplemental Indenture, dated January 24, 2002 (as
supplemented, the "Indenture") by and among the Company, the Guarantors and
U.S. Bank National Association, as trustee (the "Trustee"). The Securities
and the Guarantees will be issued in exchange for the Company's outstanding 8
7/8% Senior Secured Notes due 2009 on the terms set forth in the prospectus
contained in the Registration Statement and the Letter of Transmittal filed
as an exhibit thereto. Capitalized terms used herein without definition have
the meanings assigned to them in the Indenture.

            In my capacity as such counsel in connection with such registration,
I am familiar with the proceedings taken and proposed to be taken by the Company
and the Guarantors in connection with the authorization and issuance of the
Securities and the Guarantees, respectively. In addition, I have made such legal
and factual examinations and inquiries, including an examination of originals or
copies certified or otherwise identified to my satisfaction of such documents,
corporate records and instruments, as I have deemed necessary for purposes of
this opinion.

- --------------------------------------------------------------------------------
    505 Montgomery Street, Suite 1900 o San Francisco, California 94111-2562
                 TELEPHONE: (415) 391-0600 o FAX: (415) 395-8095



            In my examination, I have assumed the genuineness of all signatures,
the authenticity of all documents submitted to me as originals, and the
conformity to authentic original documents of all documents submitted to me as
copies.

            I am opining herein as to the effect on the subject transaction only
of the federal laws of the United States, the internal laws of the State of Ohio
and the Delaware General Corporation Law (the "DGCL"), and I express no opinion
with respect to the applicability thereto, or the effect thereon, of the laws of
any other jurisdiction or, in the case of Delaware, any other laws, or as to any
matters of municipal law or the laws of any local agencies within any state.

            Subject to the foregoing and the other matters set forth herein, it
is my opinion that as of the date hereof:

            1. The Securities have been duly authorized by all necessary
corporate action of the Company.

            2. Each of the Guarantees has been duly authorized by all necessary
corporate, limited liability company or partnership action of the respective
Guarantor.

            I consent to your filing this opinion as an exhibit to the above
mentioned Registration Statement.

                                       Very truly yours,

                                       /s/ James W. Baehren

                                       James W. Baehren








                                   SCHEDULE A


                  ACI America Holdings Inc.
                  Anamed International, Inc.
                  BriGam Medical, Inc.
                  BriGam Ventures, Inc.
                  BriGam, Inc.
                  Brockway Realty Corporation
                  Brockway Research, Inc.
                  Continental PET Technologies, Inc.
                  MARC Industries, Inc.
                  Martell Medical Products, Incorporated
                  NHW Auburn, LLC
                  OB Cal South Inc.
                  OI AID STS Inc.
                  OI Auburn Inc.
                  OI Australia Inc.
                  OI Brazil Closure Inc.
                  OI California Containers Inc.
                  OI Castalia STS Inc.
                  OI Consol STS Inc.
                  OI Ecuador STS Inc.
                  OI Europe & Asia Inc.
                  OI General Finance Inc.
                  OI General FTS Inc.
                  O-I Health Care Holding Corp.
                  O-I Holding Company, Inc.
                  OI Hungary Inc.
                  OI International Holdings Inc.
                  OI Levis Park STS Inc.
                  OI Medical Holdings Inc.
                  OI Medical Inc.
                  OI Peru STS Inc.
                  OI Plastic Products FTS Inc.
                  OI Poland Inc.
                  OI Puerto Rico STS Inc.



                  OI Regioplast STS Inc.
                  OI Venezuela Plastic Products Inc.
                  OIB Produvisa Inc.
                  Overseas Finance Company
                  Owens-BriGam Medical Company
                  Owens-Brockway Glass Container Trading Company
                  Owens-Brockway Packaging, Inc.
                  Owens-Brockway Plastic Products Inc.
                  Owens-Illinois Closure Inc.
                  Owens-Illinois General Inc.
                  Owens-Illinois Prescription Products Inc.
                  Owens-Illinois Specialty Products Puerto Rico, Inc.
                  Product Design & Engineering, Inc.
                  SeaGate II, Inc.
                  SeaGate III, Inc.
                  SeaGate, Inc.
                  Specialty Packaging Licensing Company
                  Universal Materials, Inc.

EX-12.1

                                                      EXHIBIT 12.1 - PAGE 1 OF 2


                           OWENS-ILLINOIS GROUP, INC.

                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

                      (Millions of dollars, except ratios)




                                                                                              Years ended December 31,
                                                                                        ----------------------------------
                                                                                           2001         2000        1999
                                                                                        ----------    --------    --------
                                                                                                         
Earnings before income taxes, minority share owners' interests, and
    extraordinary items ...........................................................     $    667.2    $  158.4    $  497.8
Less:  Equity earnings ............................................................          (19.4)      (19.8)      (22.3)
Add:  Total fixed charges deducted from earnings ..................................          448.4       499.2       452.4
      Proportional share of pre-tax earnings of 50% owned associates ..............           10.4        11.0        10.6
      Dividends received from less than 50% owned associates ......................            9.9        14.5         9.8
                                                                                        ----------    --------    --------
        Earnings available for payment of fixed charges ...........................     $  1,116.5    $  663.3    $  948.3
                                                                                        ==========    ========    ========
 Fixed charges (including the Company's proportional share of 50% owned associates):
      Interest expense ............................................................     $    414.2    $  476.6    $  417.0
      Portion of operating lease rental deemed to be interest .....................           14.3        12.5        26.5
      Amortization of deferred financing costs and debt discount expense ..........           19.9        10.1         8.9
                                                                                        ----------    --------    --------
 Total fixed charges deducted from earnings and total fixed charges ...............     $    448.4    $  499.2    $  452.4
                                                                                        ==========    ========    ========
 Ratio of earnings to fixed charges ...............................................            2.5         1.3         2.1







                                                      EXHIBIT 12.1 - PAGE 2 OF 2

                           OWENS-ILLINOIS GROUP, INC.

                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

                      (Millions of dollars, except ratios)




                                                                         Years ended December 31,
                                                                         ------------------------
                                                                             1998        1997
                                                                           --------    --------
                                                                                 
Earnings before income taxes, minority share owners' interests, and
   extraordinary items ...............................................     $  459.0    $  452.3
Less:  Equity earnings ...............................................        (16.0)      (17.9)
Add:  Total fixed charges deducted from earnings .....................        404.8       324.1
      Proportional share of pre-tax earnings of 50% owned associates .          7.2         2.8
      Dividends received from less than 50% owned associates .........          6.6         4.8
                                                                           --------    --------
         Earnings available for payment of fixed charges .............     $  861.1    $  766.1
                                                                           ========    ========
Fixed charges (including the Company's proportional share of 50% owned
   associates):
   Interest expense ..................................................     $  372.6    $  298.7
   Portion of operating lease rental deemed to be interest ...........         24.8        21.3
   Amortization of deferred financing costs and debt discount expense           7.4         4.1
                                                                           --------    --------
Total fixed charges deducted from earnings and total fixed charges ...     $  404.8    $  324.1
                                                                           ========    ========
Ratio of earning to fixed charges ....................................          2.1         2.4

EX-21.1

                                                                    EXHIBIT 21.1

                           OWENS-ILLINOIS GROUP, INC.
                       OWENS-BROCKWAY GLASS CONTAINER INC.
                         SUBSIDIARIES OF THE REGISTRANTS

         Owens-Illinois Group, Inc. had the following subsidiaries (including
Owens-Brockway Glass Container Inc.) at December 31, 2001. Subsidiaries are
indented following their respective parent companies:




                                                                                          STATE/COUNTRY OF INCORPORATION
NAME                                                                                      OR ORGANIZATION
- ----                                                                                      ---------------
                                                                                       
   OI Health Care Holding Corp.........................................................   Delaware
   OI General Finance Inc..............................................................   Delaware
   OI Plastic Products FTS Inc.........................................................   Delaware
      Specialty Packaging Licensing Company Limited....................................   Delaware
      Owens-Illinois Closure Inc.......................................................   Delaware
        Product Design & Engineering, Inc..............................................   Minnesota
        O-I Brazil Closure Inc.........................................................   Delaware
      Owens-Illinois Prescription Products Inc.........................................   Delaware
        OI Medical Inc.................................................................   Delaware
           MARC Industries, Inc........................................................   Delaware
              Specialty Packaging Products de Mexico, S.A. de C.V......................   Mexico
           OI Medical Holdings, Inc....................................................   Delaware
              Anamed International, Inc................................................   Nevada
                Owens-BriGam de Mexico.................................................   Mexico
              Martell Medical Products, Inc............................................   California
              Owens-BriGam Medical Company.............................................   Delaware
              BriGam, Inc..............................................................   North Carolina
                BriGam Medical Inc.....................................................   North Carolina
                BriGam Ventures, Inc...................................................   North Carolina
      Owens-Brockway Plastic Products, Inc.............................................   Delaware
        Owens-Illinois Specialty Products Puerto Rico, Inc.............................   New Jersey
        OI Regioplast STS Inc..........................................................   Delaware
           Regioplast S.A. de C.V......................................................   Mexico
        OI Australia Inc...............................................................   Delaware
           Owens-Illinois Plastics Ltd.................................................   Australia
              ACI America Holdings Inc.................................................   Delaware
                Continental PET Technologies Inc.......................................   Delaware
                   Continental PET Technologies de Mexico, S.A. de C. V................   Mexico
                   Continental PET Technologies Magyaoroszag Kft.......................   Hungary
                   Continental PET do Brasil Ltda......................................   Brazil
   OI Venezuela Plastic Products Inc...................................................   Delaware
      OI Plasticos de Venezuela C.A....................................................   Venezuela
      OI General FTS Inc...............................................................   Delaware








                                                                                          STATE/COUNTRY OF INCORPORATION
                                      NAME                                                       OR ORGANIZATION
- ---------------------------------------------------------------------------------------- --------------------------------
                                                                                       
        OI Castalia STS Inc............................................................   Delaware
        OI Levis Park STS Inc..........................................................   Delaware
        OI AID STS Inc.................................................................   Delaware
        Owens-Illinois General Inc.....................................................   Delaware
           Owens Insurance, Ltd........................................................   Bermuda
           OI Holding Company, Inc.....................................................   Ohio
           Owens-Illinois Foreign Sales Corp...........................................   Virgin Islands
           Universal Materials, Inc....................................................   Ohio
      Owens-Brockway Packaging, Inc....................................................   Delaware
        Owens-Brockway Glass Container, Inc............................................   Delaware
           Brockway Realty Inc.........................................................   Pennsylvania
           Brockway Research Inc.......................................................   Delaware
           NHW Auburn LLC..............................................................   Delaware
           OI Auburn Inc...............................................................   Delaware
           Seagate, Inc................................................................   Ohio
           OIB Produvisa Inc...........................................................   Delaware
           OI Consol STS Inc...........................................................   Delaware
           OI California Containers Inc................................................   Delaware
           OI Puerto Rico STS Inc......................................................   Delaware
              Owens-Illinois de Puerto Rico............................................   Ohio
           OI Eduador STS Inc..........................................................   Delaware
              Cristaleria del Ecuador, S. A............................................   Ecuador
           OI Peru STS Inc.............................................................   Delaware
              Vidrios Industriales S. A................................................   Peru
                Compania Manufactura De Vidrio Del Peru................................   Peru
           OI Poland, Inc..............................................................   Delaware
              Huta Szkla Jaroslaw S. A.................................................   Poland
              Huta Szkla Antoninek Sp.zo.o.............................................   Poland
           OI Hungary Inc..............................................................   Delaware
              United Hungarian Glass Containers Kft....................................   Hungary
           OI Thailand Inc.............................................................   Delaware
              OI Pacific (Machinery and Distribution) Limited..........................   Thailand
           OI International Holdings Inc...............................................   Delaware
              OI Global C.V............................................................   Netherlands
                Owens-Illinois (Australia) Pty. Ltd....................................   Australia
                   ACI Packaging Services Pty. Ltd.....................................   Australia
                      ACI Operations Pty. Ltd..........................................   Australia
                   ACI Plastics Packaging (Thailand) Ltd...............................   Thailand
                      ACI International ltd............................................   Australia
                        OI Andover Group Inc...........................................   Delaware
                          The Andover Group Inc........................................   Delaware
                        Breadalbane Shipping PTE Ltd...................................   Singapore
                        PT Kangar Consolidated Industries..............................   Indonesia
                        ACI India LLC..................................................   Delaware





                                                                                          STATE/COUNTRY OF INCORPORATION
                                      NAME                                                       OR ORGANIZATION
- ---------------------------------------------------------------------------------------- --------------------------------
                                                                                       
                          Owens-Brockway (India) Limited...............................   India
                        Owens-Illinois (NZ) Ltd........................................   New Zealand
                          ACI Operations New Zealand Ltd...............................   New Zealand
                        OI China LLC...................................................   Delaware
                          Wuhan Owens Glass Container Company Ltd......................   China
                        Owens-Illinois (HK) Ltd........................................   Hong Kong
                          ACI Guangdong Ltd............................................   Hong Kong
                            ACI Guangdong Glass Company Ltd............................   China
                          ACI Shanghai Ltd.............................................   Hong King
                            ACI Shanghai Glass Company Ltd.............................   China
                          ACI Tianjin Ltd..............................................   Hong Kong
                            ACI Tianjin Mould Company Ltd..............................   China
                OI European Group B.V..................................................   Netherlands
                   OI Europe (Machinery and Distribution) Limited......................   United Kingdom
                   Closure & Packaging Services, Ltd...................................   Guernsey
                      Closure & Packaging Services (U.K.) Ltd..........................   United Kingdom
                      Closure & Packaging Services (Antilles) N.V......................   Netherlands Antilles
                        Closure & Packaging Services (Netherlands) B.V.................   Netherlands
                   UGG Holdings Ltd....................................................   United Kingdom
                      OI Overseas Management Company LLC...............................   Delaware
                        United Glass Group Ltd.........................................   United Kingdom
                          United Glass, Limited........................................   United Kingdom
                   OI Glass Holdings B.V...............................................   Netherlands
                      Owens-Illinois International Management & Trading Kft............   Hungary
                      OI Italia S.r.l..................................................   Italy
                        AVIR S.p.A.....................................................   Italy
                          Avirunion, a.s...............................................   Czech Republic
                          Sonator Investments B.V......................................   Netherlands
                          Vetrerie Medid...............................................   Italy
                          San Domenico Vetraria S.r.l..................................   Italy
                          Nord Vetri S.p.A.............................................   Italy
                          Sicilvetro S.p.A.............................................   Italy
                            Vidrieria Rovira, S. A.....................................   Spain
                   Owens-Illinois International B. V...................................   Netherlands
                      PET Technologies Limited.........................................   United Kingdom
                      Owens-Illinois Canadian Holdings B.V.............................   Netherlands




                                                                                          STATE/COUNTRY OF INCORPORATION
                                      NAME                                                       OR ORGANIZATION
- ---------------------------------------------------------------------------------------- --------------------------------
                                                                                       
                        O-I Canada Corp................................................   Canada
                      Centro Vidriero de Venezuela, C.A................................   Venezuela
                      Manufacturera de Vidrios Planos, C.A.............................   Venezuela
                      OIV Holding, C.A.................................................   Venezuela
                        Owens-Illinois de Venezuela, C. A..............................   Venezuela
                          Fabrica de Vidrio Los Andes, C. A. ..........................   Venezuela
                      Cristaleria Peldar, S.A..........................................   Colombia
                      Compania Nacional De Vidrios S.A.................................   Colombia
                      Cristar S.A......................................................   Colombia
                        Vidrieria Fenicia..............................................   Colombia
                      Industria de Materias Primas Limitiada...........................   Colombia
                      Sao Raimundo Administracao, Participacoes e Representacoes,
                        Limitada.......................................................   Brazil
                        Companhia Industrial Sao Paulo e Rio...........................   Brazil
                      OI Finnish Holdings Oy...........................................   Finland
                        Ryttylan Muovi Oy..............................................   Finland
                        Karhulan Lasi Oy...............................................   Finland
                        A/S Jarvakandi Klaas...........................................   Estonia
                      PET Technologies B. V............................................   Netherlands

EX-23.3

                                                                    EXHIBIT 23.3

                        CONSENT OF INDEPENDENT AUDITORS

    We consent to the reference to our firm under the caption "Selected
Financial Data."

    We consent to the reference to our firm under the caption "Experts" and to
the use of the reports dated January 24, 2002 with respect to the consolidated
financial statements and schedule of Owens-Illinois Group, Inc. and with respect
to the consolidated financial statements of Owens-Brockway Packaging, Inc.,
Owens-Brockway Glass Container Inc., and OI Plastic Products FTS Inc., all of
which are included in this Registration Statement on Form S-4 and related
prospectus of Owens-Brockway Glass Container Inc. for the registration of
$1.0 billion of 8 7/8% Senior Secured Notes due 2009.

                                          /s/ ERNST & YOUNG LLP

Toledo, Ohio
April 5, 2002

EX-24.1

                                                                    Exhibit 24.1

                                POWER OF ATTORNEY

         KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint R. Scott Trumbull, James W.
Baehren, or either of them, individually, as his true and lawful
attorney-in-fact and agent, each acting alone, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign this registration statement and any and all amendments
thereto (including without limitation any post-effective amendments thereto and
any registration statement pursuant to Rule 462(b)), and to file each of the
same, with all exhibits thereto and all other documents in connection therewith,
with the Securities and Exchange Commission, and every act and thing necessary
or desirable to be done, as fully to all intents and purposes as he might or
could do in person, thereby ratifying and confirming all that said
attorney-in-fact and agent, each acting alone, or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.

         Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
Owens-Illinois Group, Inc. in the capacities and on the dates indicated.




SIGNATURE                                TITLE                                  DATE
- ---------                                -----                                  ----
                                                                          

/s/ Thomas L. Young                      President, Chairman of the Board of    April 5, 2002
- ------------------------------------     Directors and Chief Executive
Thomas L. Young                          Officer (Principal Executive
                                         Officer); Director

/s/ James W. Baehren                     Vice President and Secretary;          April 5, 2002
- ------------------------------------     Director
James W. Baehren

/s/ R. Scott Trumbull                    Vice President and Chief Financial     April 5, 2002
- ------------------------------------     Officer; Director
R. Scott Trumbull

/s/ Jeffrey A. Denker                    Treasurer                              April 5, 2002
- ------------------------------------     (Principal Financial Officer)
Jeffrey A. Denker

/s/ Edward C. White                      Controller and Chief Accounting        April 5, 2002
- ------------------------------------     Officer (Principal Accounting
Edward C. White                          Officer)










                                POWER OF ATTORNEY

         KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint R. Scott Trumbull, James W.
Baehren, or either of them, individually, as his true and lawful
attorney-in-fact and agent, each acting alone, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign this registration statement and any and all amendments
thereto (including without limitation any post-effective amendments thereto and
any registration statement pursuant to Rule 462(b)), and to file each of the
same, with all exhibits thereto and all other documents in connection therewith,
with the Securities and Exchange Commission, and every act and thing necessary
or desirable to be done, as fully to all intents and purposes as he might or
could do in person, thereby ratifying and confirming all that said
attorney-in-fact and agent, each acting alone, or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.

         Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of
Owens-Brockway Glass Container Inc. in the capacities and on the dates
indicated.




SIGNATURE                                TITLE                                  DATE
- ---------                                -----                                  ----
                                                                          

/s/ Joseph H. Lemieux                    Chairman of the Board of Directors     April 5, 2002
- ------------------------------------     and Chief Executive Officer
Joseph H. Lemieux                        (Principal Executive Officer);
                                         Director

/s/ Thomas L. Young                      Executive Vice President,              April 5, 2002
- ------------------------------------     Administration and General Counsel;
Thomas L. Young                          Director

/s/ Robert J. Dineen                     Director                               April 5, 2002
- ------------------------------------
Robert J. Dineen

/s/ Edward A. Gilhuly                    Director                               April 5, 2002
- ------------------------------------
Edward A. Gilhuly

/s/ James H. Greene, Jr.                 Director                               April 5, 2002
- ------------------------------------
James H. Greene, Jr.

                                         Director
- ------------------------------------
Anastasia D. Kelly

/s/ John J. McMackin, Jr.                Director                               April 5, 2002
- ------------------------------------
John J. McMackin, Jr.

                                         Director
- ------------------------------------
Michael W. Michelson





                                                                          

/s/ George R. Roberts                    Director                               April 5, 2002
- ------------------------------------
George R. Roberts

/s/ R. Scott Trumbull                    Executive Vice President and Chief     April 5, 2002
- ------------------------------------     Financial Officer (Principal
R. Scott Trumbull                        Financial Officer)

/s/ Edward C. White                      Vice President and Comptroller         April 5, 2002
- ------------------------------------     (Principal Accounting Officer)
Edward C. White

EX-25.1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                           --------------------------

                                    FORM T-1

                         STATEMENT OF ELIGIBILITY UNDER
                      THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE
               Check if an Application to Determine Eligibility of
                   a Trustee Pursuant to Section 305(b)(2)___
             -------------------------------------------------------

                         U.S. BANK NATIONAL ASSOCIATION
               (Exact name of Trustee as specified in its charter)

                                   31-0841368
                       I.R.S. Employer Identification No.


180 EAST FIFTH STREET
ST. PAUL, MN                                                  55101
  (Address of principal executive offices)                  (Zip Code)


                                 Julie Eddington
                         U.S. Bank National Association
                              180 East Fifth Street
                               St. Paul, MN 55101
            (Name, address and telephone number of agent for service)

                       OWENS-BROCKWAY GLASS CONTAINER INC.
             (Exact name of Registrant as specified in its charter)

DELAWARE
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)


One SeaGate
Toledo, Ohio                                                   43666
(Address of Principal Executive Offices)                     (Zip Code)

                      8 7/8% SENIOR SECURED NOTES DUE 2009
                       (TITLE OF THE INDENTURE SECURITIES)








                                    FORM T-1


ITEM 1.  GENERAL INFORMATION. Furnish the following information as to the
         Trustee.

         a)   NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
              WHICH IT IS SUBJECT.
                  Comptroller of the Currency

                                Washington, D.C.

         b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
                  Yes

ITEM 2.  AFFILIATIONS WITH OBLIGOR.  IF THE OBLIGOR IS AN AFFILIATE OF THE
         TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
            None

ITEMS 3-15  ITEMS 3-15 ARE NOT APPLICABLE BECAUSE TO THE BEST OF THE TRUSTEE'S
            KNOWLEDGE THE OBLIGOR IS NOT IN DEFAULT UNDER ANY INDENTURE FOR
            WHICH THE TRUSTEE ACTS AS TRUSTEE.

ITEM 16. LIST OF EXHIBITS: LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
         STATEMENT OF ELIGIBILITY AND QUALIFICATION.

         1. A copy of the Articles of Association of the Trustee.*

         2. A copy of the certificate of authority of the Trustee to commence
            business.*

         3. A copy of the certificate of authority of the Trustee to exercise
            corporate trust powers.*

         4. A copy of the existing bylaws of the Trustee.*

         5. A copy of each Indenture referred to in Item 4.  Not applicable.

         6. The consent of the Trustee required by Section 321(b) of the Trust
            Indenture Act of 1939, attached as Exhibit 6.

         7. Report of Condition of the Trustee as of September 30, 2001,
            published pursuant to law or the requirements of its supervising or
            examining authority, attached as Exhibit 7.

     * Incorporated by reference to Registration Number 333-67188.

                                       2





                                      NOTE

      The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligors, or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.

                                    SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of St.
Paul, State of Minnesota on the 22nd day of February, 2002.



                              U.S. BANK NATIONAL ASSOCIATION

                              By:   /s/ Julie Eddington
                                    ------------------------
                                    Julie Eddington
                                    Assistant Vice President




By:   /s/ Lori-Anne Rosenberg
      ------------------------
      Lori-Anne Rosenberg
      Assistant Vice President


                                       3





                                    EXHIBIT 6

                                     CONSENT

In accordance with Section 321(b) of the Trust Indenture Act of 1939, the
undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of
examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.


Dated:  February 22, 2002


                              U.S. BANK NATIONAL ASSOCIATION


                              By:   /S/ Julie Eddington
                                    ------------------------
                                    Julie Eddington
                                    Assistant Vice President




By:   /s/ Lori-Anne Rosenberg
      ------------------------
      Lori-Anne Rosenberg
      Assistant Vice President

                                       4






                                    EXHIBIT 7

                         U.S. BANK NATIONAL ASSOCIATION
                        STATEMENT OF FINANCIAL CONDITION
                                 AS OF 9/30/2001

                                    ($000'S)




                                                             9/30/2001
                                                          ------------
                                                       

ASSETS

     Cash and Due From Depository Institutions              $7,424,578
     Federal Reserve Stock                                           0
     Securities                                             25,107,852
     Federal Funds                                           1,509,608
     Loans & Lease Financing Receivables                   108,011,203
     Fixed Assets                                            1,455,348
     Intangible Assets                                       7,830,028
     Other Assets                                            6,597,674
                                                          ------------
         TOTAL ASSETS                                     $157,936,291

LIABILITIES

     Deposits                                             $101,929,065
     Fed Funds                                               3,823,703
     Treasury Demand Notes                                           0
     Trading Liabilities                                       168,430
     Other Borrowed Money                                   24,037,743
     Acceptances                                               184,931
     Subordinated Notes and Debentures                       5,477,870
     Other Liabilities                                       3,711,905
                                                          ------------
     TOTAL LIABILITIES                                    $139,333,647

EQUITY

     Minority Interest in Subsidiaries                        $943,906
     Common and Preferred Stock                                310,004
     Surplus                                                11,775,689
     Undivided Profits                                       5,573,045
                                                          ------------
         TOTAL EQUITY CAPITAL                              $18,602,644

TOTAL LIABILITIES AND EQUITY CAPITAL                      $157,936,291




To the best of the undersigned's determination, as of this date the above
financial information is true and correct.


U.S. Bank National Association

By:  /s/ Julie Eddington
     ------------------------
     Assistant Vice President

Date:  February 22, 2002

                                       5

EX-99.1

                             LETTER OF TRANSMITTAL
                             TO TENDER FOR EXCHANGE
                      8 7/8% SENIOR SECURED NOTES DUE 2009
                                       OF

                      OWENS-BROCKWAY GLASS CONTAINER INC.

                PURSUANT TO THE PROSPECTUS DATED         , 2002

- --------------------------------------------------------------------------------
    THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON       ,
2002, UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED FROM
   TIME TO TIME, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME
   PRIOR THE EXPIRATION DATE.
- --------------------------------------------------------------------------------

                             THE EXCHANGE AGENT IS:
                         U.S. BANK NATIONAL ASSOCIATION

                                                 
         BY REGISTERED OR CERTIFIED MAIL:                           BY HAND DELIVERY:

          U.S. Bank National Association                      U.S. Bank National Association
              180 East Fifth Street                               180 East Fifth Street
            St. Paul, Minnesota 55101                           St. Paul, Minnesota 55101
    Attention: Corporate Trust Administration           Attention: Corporate Trust Administration
            Telephone: (651) 244-8677                           Telephone: (651) 244-8677
            Facsimile: (651) 244-0711                           Facsimile: (651) 244-0711

              BY OVERNIGHT DELIVERY:                                  BY FACSIMILE:

          U.S. Bank National Association                              (651) 244-0711
              180 East Fifth Street                        Attn: Corporate Trust Administration
            St. Paul, Minnesota 55101                             CONFIRM BY TELEPHONE:
    Attention: Corporate Trust Administration                         (651) 244-8677
            Telephone: (651) 244-8677
            Facsimile: (651) 244-0711



    DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION TO A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY.

    The undersigned acknowledges receipt of the Prospectus dated         , 2002
(the "Prospectus"), of Owens-Brockway Glass Container Inc., a Delaware
corporation (the "Company"), and this Letter of Transmittal (the "Letter of
Transmittal"), which together with the Prospectus constitutes the Company's
offer (the "Exchange Offer") to exchange $1,000 principal amount of its 8 7/8%
Senior Secured Notes due 2009 (the "Exchange Notes") for each $1,000 principal
amount of its outstanding 8 7/8% Senior Secured Notes due 2009 (the "Private
Notes"). Recipients of the Prospectus should read the requirements described in
such Prospectus with respect to eligibility to participate in the Exchange
Offer. Capitalized terms used but not defined herein have the meaning given to
them in the Prospectus.

    The undersigned hereby tenders the Private Notes described in the box
entitled "Description of Private Notes" below pursuant to the terms and
conditions described in the Prospectus and this Letter of Transmittal. The
undersigned is the registered holder of all the Private Notes (the "Holder") and
the undersigned represents that it has received from each beneficial owner of
Private Notes (the "Beneficial Owners") a duly completed and executed form of
"Instruction to Registered Holder from Beneficial Owner" accompanying this
Letter of Transmittal, instructing the undersigned to take the action described
in this Letter of Transmittal.

PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL BEFORE CAREFULLY COMPLETING ANY
BOX BELOW.

    This Letter of Transmittal is to be used by a Holder if (i) certificates
representing Private Notes are to be forwarded herewith and (ii) a tender is
made pursuant to the guaranteed delivery procedures in the section of the
Prospectus entitled "The Exchange Offer--Guaranteed Delivery Procedures."

    Holders that are tendering by book-entry transfer to the Exchange Agent's
account at DTC can execute the tender through ATOP for which the Exchange Offer
will be eligible. DTC participants that are accepting the Exchange Offer must
transmit their acceptance to DTC which will verify the acceptance and execute a
book-entry delivery to the Exchange Agent's account at DTC. DTC will then send
an agent's message forming part of a book-entry transfer in which the
participant agrees to be bound by the terms of the Letter of Transmittal (an
"Agent's Message") to the Exchange Agent for its acceptance. Transmission of the
Agent's Message by DTC will satisfy the terms of the Exchange Offer as to
execution and delivery of a Letter of Transmittal by the participant identified
in the Agent's Message.

    Any Beneficial Owner whose Private Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such Holder promptly and instruct such Holder to tender
on behalf of the Beneficial Owner. If such Beneficial Owner wishes to tender on
its own behalf, such Beneficial Owner must, prior to completing and executing
this Letter of Transmittal and delivering its Private Notes, either make
appropriate arrangements to register ownership of the Private Notes in such
Beneficial Owner's name or obtain a properly completed bond power from the
Holder. The transfer of record ownership may take considerable time.

    In order to properly complete this Letter of Transmittal, a Holder must
(i) complete the box entitled "Description of Private Notes," (ii) if
appropriate, check and complete the boxes relating to book-entry transfer,
guaranteed delivery, Special Issuance Instructions and Special Delivery
Instructions, (iii) sign the Letter of Transmittal by completing the box
entitled "Sign Here To Tender Your Private Notes" and (iv) complete the
Substitute Form W-9. Each Holder should carefully read the detailed instructions
below prior to completing the Letter of Transmittal.

    Holders of Private Notes who desire to tender their Private Notes for
exchange and (i) whose Private Notes are not immediately available or (ii) who
cannot deliver their Private Notes, this Letter of Transmittal and all other
documents required hereby to the Exchange Agent on or prior to the Expiration
Date, must tender the Private Notes pursuant to the guaranteed delivery
procedures set forth in the section of the Prospectus entitled "The Exchange
Offer--Guaranteed Delivery Procedures." See Instruction 2.

    Holders of Private Notes who wish to tender their Private Notes for exchange
must complete columns (1) through (3) in the box below entitled "Description of
Private Notes," and sign the box below entitled "Sign Here To Tender Your
Private Notes." If only those columns are completed, such Holder will have
tendered for exchange all Private Notes listed in column (3) below. If the
Holder wishes to tender for exchange less than all of such Private Notes, column
(4) must be completed in full. In such case, such Holder should refer to
Instruction 5.

    The Exchange Offer may be extended, terminated or amended, as provided in
the Prospectus. During any such extension of the Exchange Offer, all Private
Notes previously tendered and not withdrawn pursuant to the Exchange Offer will
remain subject to such Exchange Offer.

    The undersigned hereby tenders for exchange the Private Notes described in
the box entitled "Description of Private Notes" below pursuant to the terms and
conditions described in the Prospectus and this Letter of Transmittal.

                                       2




- ------------------------------------------------------------------------------------------------------
                                     DESCRIPTION OF PRIVATE NOTES
- ------------------------------------------------------------------------------------------------------
                     (1)                              (2)                (3)                (4)
                                                                      AGGREGATE
           NAME(S) AND ADDRESS(ES)                                PRINCIPAL AMOUNT   PRINCIPAL AMOUNT
           OF REGISTERED HOLDER(S)                CERTIFICATE      REPRESENTED BY      TENDERED FOR
         (PLEASE FILL IN, IF BLANK)                NUMBER(S)      CERTIFICATE(S)(A)     EXCHANGE(B)
- ------------------------------------------------------------------------------------------------------
                                                                            
                                                    --------------------------------------------

                                                    --------------------------------------------

                                                    --------------------------------------------

                                                    --------------------------------------------

                                                    --------------------------------------------

                                                    --------------------------------------------

                                                    --------------------------------------------
                                                TOTAL PRINCIPAL
                                                AMOUNT TENDERED

- ------------------------------------------------------------------------------------------------------
 (A)  Unless indicated in this column, any tendering Holder will be deemed to have tendered the entire
      aggregate principal amount represented by the Private Notes indicated in the column labeled
      "Aggregate Principal Amount Represented by Certificate(s)." See Instruction 5.

  (B)  The minimum permitted tender is $1,000 in principal amount of Private Notes. All other tenders
       must be in integral multiples of $1,000.

- ------------------------------------------------------------------------------------------------------


                                       3

- --------------------------------------------------------------------------------

/ /  CHECK HERE IF TENDERED PRIVATE NOTES ARE ENCLOSED HEREWITH.

/ /  CHECK HERE IF TENDERED PRIVATE NOTES ARE BEING DELIVERED PURSUANT TO A
    NOTICE OF GUARANTEED DELIVERY ENCLOSED HEREWITH AND COMPLETE THE FOLLOWING
    (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):

    Name(s) of Registered Holder(s): ___________________________________________

    Date of Execution of Notice of Guaranteed Delivery: ________________________

    Window Ticket Number (if any): _____________________________________________

    Name of Institution that Guaranteed Delivery: ______________________________
- --------------------------------------------------------------------------------

    Only Holders are entitled to tender their Private Notes for exchange in the
Exchange Offer. Any financial institution that is a participant in DTC's system
and whose name appears on a security position listing as the record owner of the
Private Notes and who wishes to make book-entry delivery of Private Notes as
described above must complete and execute a participant's letter (which will be
distributed to participants by DTC) instructing DTC's nominee to tender such
Private Notes for exchange. Persons who are Beneficial Owners of Private Notes
but are not Holders and who seek to tender Private Notes should (i) contact the
Holder and instruct such Holder to tender on his or her behalf, (ii) obtain and
include with this Letter of Transmittal, Private Notes properly endorsed for
transfer by the Holder or accompanied by a properly completed bond power from
the Holder, with signatures on the endorsement or bond power guaranteed by a
firm that is an eligible guarantor institution within the meaning of
Rule 17Ad-5 under the Exchange Act, including a firm that is a member of a
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc., a commercial bank or trading company having an office
in the United States or certain other eligible guarantors (each, an "Eligible
Institution"), or (iii) effect a record transfer of such Private Notes from the
Holder to such Beneficial Owner and comply with the requirements applicable to
Holders for tendering Private Notes prior to the Expiration Date. See the
section of the Prospectus entitled "The Exchange Offer--Procedures for
Tendering."

                       SIGNATURES MUST BE PROVIDED BELOW.
              PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

                                       4

- -------------------------------------------

                         SPECIAL ISSUANCE INSTRUCTIONS
                        (SEE INSTRUCTIONS 1, 6, 7 AND 8)

      To be completed ONLY (i) if the Exchange Notes issued in exchange for
  the Private Notes, certificates for Private Notes in a principal amount not
  exchanged for Exchange Notes, or Private Notes (if any) not tendered for
  exchange, are to be issued in the name of someone other than the undersigned
  or (ii) if Private Notes tendered by book-entry transfer which are not
  exchanged are to be returned by credit to an account maintained at DTC.

  Issue to:

  Name _______________________________________________________________________
                             (PLEASE TYPE OR PRINT)

  Address ____________________________________________________________________

  ____________________________________________________________________________

  ____________________________________________________________________________
                               (INCLUDE ZIP CODE)

   __________________________________________________________________________
                  (TAX IDENTIFICATION OR SOCIAL SECURITY NO.)

      Credit Private Notes not exchanged and delivered by book-entry transfer
  to DTC account set forth below:

  ____________________________________________________________________________
                                (ACCOUNT NUMBER)

- ------------------------------------------------------
- ------------------------------------------------------

                         SPECIAL DELIVERY INSTRUCTIONS
                        (SEE INSTRUCTIONS 1, 6, 7 AND 8)

      To be completed ONLY (i) if the Exchange Notes issued in exchange for
  Private Notes, certificates for Private Notes in a principal amount not
  exchanged for Exchange Notes, or Private Notes (if any) not tendered for
  exchange, are to be mailed or delivered (i) to someone other than the
  undersigned or (ii) to the undersigned at an address other than the address
  shown below the undersigned's signature.

  Mail or deliver to:

  Name _______________________________________________________________________
                             (PLEASE TYPE OR PRINT)

  Address ____________________________________________________________________

  ____________________________________________________________________________

  ____________________________________________________________________________
                               (INCLUDE ZIP CODE)

   __________________________________________________________________________
                  (TAX IDENTIFICATION OR SOCIAL SECURITY NO.)

- -----------------------------------------------------

                                       5

Ladies and Gentlemen:

    Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company for exchange the Private Notes
indicated above. Subject to, and effective upon, acceptance for exchange of the
Private Notes tendered for exchange herewith, the undersigned will have
irrevocably sold, assigned, transferred and exchanged, to the Company, all
right, title and interest in, to and under all of the Private Notes tendered for
exchange hereby, and hereby will have appointed the Exchange Agent as the true
and lawful agent and attorney-in-fact (with full knowledge that the Exchange
Agent also acts as agent of the Company) of such Holder with respect to such
Private Notes, with full power of substitution to (i) deliver certificates
representing such Private Notes, or transfer ownership of such Private Notes on
the account books maintained by DTC (together, in any such case, with all
accompanying evidences of transfer and authenticity), to the Company,
(ii) present and deliver such Private Notes for transfer on the books of the
Company and (iii) receive all benefits and otherwise exercise all rights and
incidents of beneficial ownership with respect to such Private Notes, all in
accordance with the terms of the Exchange Offer. The power of attorney granted
in this paragraph shall be deemed to be irrevocable and coupled with an
interest.

    The undersigned hereby represents and warrants that it has full power and
authority to tender, exchange, assign and transfer the Private Notes; and that
when such Private Notes are accepted for exchange by the Company, the Company
will acquire good and marketable title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claims.
The undersigned further warrants that it will, upon request, execute and deliver
any additional documents deemed by the Exchange Agent or the Company to be
necessary or desirable to complete the exchange, assignment and transfer of the
Private Notes tendered for exchange hereby. The undersigned further agrees that
acceptance of any and all validly tendered Private Notes by the Company and the
issuance of Exchange Notes in exchange therefor shall constitute performance in
full by the Company of its obligations under the Registration Rights Agreement.

    By tendering, the undersigned hereby further represents to the Company that
(i) the Exchange Notes to be acquired by the undersigned in exchange for the
Private Notes tendered hereby and any Beneficial Owner(s) of such Private Notes
in connection with the Exchange Offer will be acquired by the undersigned and
such Beneficial Owner(s) in the ordinary course of their respective businesses,
(ii) the undersigned is not engaged in, and does not intend to engage in, a
distribution of the Exchange Notes, (iii) the undersigned and each Beneficial
Owner acknowledge and agree that any person who is a broker-dealer registered
under the Exchange Act or is participating in the Exchange Offer for the purpose
of distributing the Exchange Notes must comply with the registration and
prospectus delivery requirements of Section 10 of the Securities Act in
connection with a secondary resale transaction of the Exchange Notes acquired by
such person and cannot rely on the position of the staff of the Commission set
forth in certain no-action letters, (iv) the undersigned and each Beneficial
Owner understand that a secondary resale transaction described in clause (iii)
above and any resales of Exchange Notes obtained by the undersigned in exchange
for the Private Notes acquired by the undersigned directly from the Company
should be covered by an effective registration statement containing the selling
securityholder information required by Item 507 or Item 508, as applicable, of
Regulation S-K of the Commission and (v) neither the undersigned nor any
Beneficial Owner is an "affiliate," as defined under Rule 405 under the
Securities Act, of the Company.

    If the undersigned is a broker-dealer that will receive Exchange Notes for
its own account in exchange for Private Notes that were acquired as a result of
market-making activities or other trading activities, it acknowledges that it
will deliver a prospectus meeting the requirements of Section 10 of the
Securities Act in connection with any resale of such Exchange Notes; however, by
so acknowledging and by delivering such prospectus, the undersigned will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act. A broker-dealer may not participate in the Exchange Offer with respect to
the Private Notes acquired other than as a result of market-making

                                       6

activities or other trading activities.

    For purposes of the Exchange Offer, the Company will be deemed to have
accepted for exchange, and to have exchanged, validly tendered Private Notes,
if, as and when the Company gives oral or written notice thereof to the Exchange
Agent. Tenders of Private Notes for exchange may be withdrawn at any time prior
to 5:00 p.m., New York City time, on the Expiration Date. See "The Exchange
Offer--Withdrawal of Tenders" in the Prospectus. Any Private Notes tendered by
the undersigned and not accepted for exchange will be returned to the
undersigned at the address set forth above unless otherwise indicated in the box
above entitled "Special Delivery Instructions" as promptly as practicable after
the Expiration Date.

    The undersigned acknowledges that the Company's acceptance of Private Notes
validly tendered for exchange pursuant to any one of the procedures described in
the section of the Prospectus entitled "The Exchange Offer" and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Company upon the terms and subject to the conditions of the Exchange
Offer.

    Unless otherwise indicated in the box entitled "Special Issuance
Instructions," please return any Private Notes not tendered for exchange in the
name(s) of the undersigned. Similarly, unless otherwise indicated in the box
entitled "Special Delivery Instructions," please mail any certificates for
Private Notes not tendered or exchanged (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersigned's
signature(s). In the event that both "Special Issuance Instructions" and
"Special Delivery Instructions" are completed, please issue the certificates
representing the Exchange Notes issued in exchange for the Private Notes
accepted for exchange in the name(s) of, and return any Private Notes not
tendered for exchange or not exchanged to, the person(s) so indicated. The
undersigned recognizes that the Company has no obligation pursuant to the
"Special Issuance Instructions" and "Special Delivery Instructions" to transfer
any Private Notes from the name of the Holder(s) thereof if the Company does not
accept for exchange any of the Private Notes so tendered for exchange or if such
transfer would not be in compliance with any transfer restrictions applicable to
such Private Note(s).

    IN ORDER TO VALIDLY TENDER PRIVATE NOTES FOR EXCHANGE, HOLDERS MUST
COMPLETE, EXECUTE, AND DELIVER THIS LETTER OF TRANSMITTAL.

    Except as stated in the Prospectus, all authority herein conferred or agreed
to be conferred shall survive the death, incapacity or dissolution of the
undersigned, and any obligation of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as otherwise stated in the Prospectus, this tender for
exchange of Private Notes is irrevocable.

                                       7

- --------------------------------------------------------------------------------

                     SIGN HERE TO TENDER YOUR PRIVATE NOTES

  X __________________________________________________________________________

  X __________________________________________________________________________
                            SIGNATURE(S) OF OWNER(S)

  Dated: __________________, 2002

      Must be signed by the Holder(s) exactly as name(s) appear(s) on
  certificate(s) representing the Private Notes or on a security position
  listing or by person(s) authorized to become registered Private Note
  holder(s) by certificates and documents transmitted herewith. If signature
  is by trustees, executors, administrators, guardians, attorneys-in-fact,
  officers of corporations or others acting in a fiduciary or representative
  capacity, please provide the following information. (See Instruction 6.)

  Name(s) ____________________________________________________________________

  ____________________________________________________________________________
                             (PLEASE TYPE OR PRINT)

  Capacity (full title): _____________________________________________________

  ____________________________________________________________________________

  Address: ___________________________________________________________________

  ____________________________________________________________________________
                               (INCLUDE ZIP CODE)

  Principal place of business (if different from address listed above): ______

  ____________________________________________________________________________

  ____________________________________________________________________________

  Area Code and Telephone No.: (    ): _______________________________________

  Tax Identification or Social Security Nos.: ________________________________

                           GUARANTEE OF SIGNATURE(S)
         (SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 1)

  Authorized Signature: ______________________________________________________

  Name and Title: ____________________________________________________________

  ____________________________________________________________________________
                             (PLEASE TYPE OR PRINT)

  Name of Firm: ______________________________________________________________

  Address: ___________________________________________________________________

  Area Code and Telephone No.: _______________________________________________

  Dated: _____________________________________________________________________
  ----------------------------------------------------------------------------

            IMPORTANT: COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 IN
                          THIS LETTER OF TRANSMITTAL.

                                       8

                                  INSTRUCTIONS
         FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

    1.  GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by an institution
which is (1) a member of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., (2) a commercial bank or trust
company having an office or correspondent in the United States, or (3) an
Eligible Institution that is a member of one of the following recognized
Signature Guarantee Programs:

    (a) The Securities Transfer Agents Medallion Program (STAMP);

    (b) The New York Stock Exchange Medallion Signature Program (MSP); or

    (c) The Stock Exchange Medallion Program (SEMP).

    Signatures on this Letter of Transmittal need not be guaranteed (i) if this
Letter of Transmittal is signed by the Holder(s) of the Private Notes tendered
herewith and such Holder(s) have not completed the box entitled "Special
Issuance Instructions" or the box entitled "Special Delivery Instructions" on
this Letter of Transmittal or (ii) if such Private Notes are tendered for the
account of an Eligible Institution. In all other cases, all signatures must be
guaranteed by an Eligible Institution.

    2.  DELIVERY OF THIS LETTER OF TRANSMITTAL AND PRIVATE NOTES; GUARANTEED
DELIVERY PROCEDURES. This Letter of Transmittal is to be completed by Holders if
certificates representing Private Notes are to be forwarded herewith. All
physically delivered Private Notes, as well as a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile thereof) and any
other required documents, must be received by the Exchange Agent at its address
set forth herein prior to the Expiration Date or the tendering holder must
comply with the guaranteed delivery procedures set forth below. Delivery of the
documents to DTC does not constitute delivery to the Exchange Agent.

    The method of delivery of Private Notes, this Letter of Transmittal and all
other required documents to the Exchange Agent is at the election and risk of
the Holder. Except as otherwise provided below, the delivery will be deemed made
only when actually received or confirmed by the Exchange Agent. Instead of
delivery by mail, it is recommended that Holders use an overnight or hand
delivery service, properly insured. In all cases, sufficient time should be
allowed to assure delivery to the Exchange Agent before the Expiration Date.
Neither this Letter of Transmittal nor any Private Notes should be sent to the
Company. Holders may request their respective brokers, dealers, commercial
banks, trust companies or nominees to effect the above transactions for such
Holders.

    Holders of Private Notes who elect to tender Private Notes and (i) whose
Private Notes are not immediately available or (ii) who cannot deliver the
Private Notes, this Letter of Transmittal or other required documents to the
Exchange Agent prior the Expiration Date must tender their Private Notes
according to the guaranteed delivery procedures set forth in the Prospectus.
Holders may have such tender effected if:

    (a) such tender is made through an Eligible Institution;

    (b) prior to 5:00 p.m., New York City time, on the Expiration Date, the
       Exchange Agent has received from such Eligible Institution a properly
       completed and duly executed Notice of Guaranteed Delivery, setting forth
       the name and address of the Holder, the certificate number(s) of such
       Private Notes and the principal amount of Private Notes tendered for
       exchange, stating that tender is being made thereby and guaranteeing
       that, within three New York Stock Exchange trading days after the
       Expiration Date, this Letter of Transmittal (or facsimile thereof),
       together with the certificate(s) representing such Private Notes (or a
       Book-Entry Confirmation), in proper form for transfer, and any other
       documents required by

                                       9

       this Letter of Transmittal, will be deposited by such Eligible
       Institution with the Exchange Agent; and

    (c) a properly executed Letter of Transmittal (or facsimile thereof), as
       well as the certificate(s) for all tendered Private Notes in proper form
       for transfer or a Book-Entry Confirmation, together with any other
       documents required by this Letter of Transmittal, are received by the
       Exchange Agent within five New York Stock Exchange trading days after the
       Expiration Date.

    No alternative, conditional or contingent tenders will be accepted. All
tendering Holders, by execution of this Letter of Transmittal (or facsimile
thereof), waive any right to receive notice of the acceptance of their Private
Notes for exchange.

    3.  INADEQUATE SPACE. If the space provided in the box entitled "Description
of Private Notes" above is inadequate, the certificate numbers and principal
amounts of the Private Notes being tendered should be listed on a separate
signed schedule affixed hereto.

    4.  WITHDRAWALS. A tender of Private Notes may be withdrawn at any time
prior to the Expiration Date by delivery of written notice of withdrawal (or
facsimile thereof) to the Exchange Agent at the address set forth on the cover
of this Letter of Transmittal. To be effective, a notice of withdrawal of
Private Notes must (i) specify the name of the person who tendered the Private
Notes to be withdrawn (the "Depositor"), (ii) identify the Private Notes to be
withdrawn (including the certificate number(s) and aggregate principal amount of
such Private Notes), and (iii) be signed by the Holder in the same manner as the
original signature on the Letter of Transmittal by which such Private Notes were
tendered (including any required signature guarantees). All questions as to the
validity, form and eligibility (including time of receipt) of such notices will
be determined by the Company in its sole discretion, whose determination shall
be final and binding on all parties. Any Private Notes so withdrawn will
thereafter be deemed not validly tendered for purposes of the Exchange Offer and
no Exchange Notes will be issued with respect thereto unless the Private Notes
so withdrawn are validly retendered. Properly withdrawn Private Notes may be
retendered by following one of the procedures described in the section of the
Prospectus entitled "The Exchange Offer--Procedures for Tendering" at any time
prior to the Expiration Date.

    5.  PARTIAL TENDERS. Tenders of Private Notes will be accepted only in
integral multiples of $1,000 principal amount. If a tender for exchange is to be
made with respect to less than the entire principal amount of any Private Notes,
fill in the principal amount of Private Notes which are tendered for exchange in
column (4) of the box entitled "Description of Private Notes," as more fully
described in the footnotes thereto. In the case of a partial tender for
exchange, a new certificate, in fully registered form, for the remainder of the
principal amount of the Private Notes, will be sent to the Holders unless
otherwise indicated in the appropriate box on this Letter of Transmittal as
promptly as practicable after the expiration or termination of the Exchange
Offer.

    6.  SIGNATURES ON THIS LETTER OF TRANSMITTAL, POWERS OF ATTORNEY AND
ENDORSEMENTS.

    (a) The signature(s) of the Holder on this Letter of Transmittal must
       correspond with the name(s) as written on the face of the Private Notes
       without alternation, enlargement or any change whatsoever.

    (b) If tendered Private Notes are owned of record by two or more joint
       owners, all such owners must sign this Letter of Transmittal.

    (c) If any tendered Private Notes are registered in different names on
       several certificates, it will be necessary to complete, sign and submit
       as many separate copies of this Letter of Transmittal and any necessary
       or required documents as there are different registrations or
       certificates.

                                       10

    (d) When this Letter of Transmittal is signed by the Holder listed and
       transmitted hereby, no endorsements of Private Notes or bond powers are
       required. If, however, Private Notes not tendered or not accepted, are to
       be issued or returned in the name of a person other than the Holder, then
       the Private Notes transmitted hereby must be endorsed or accompanied by a
       properly completed bond power, in a form satisfactory to the Company, in
       either case signed exactly as the name(s) of the Holder(s) appear(s) on
       the Private Notes. Signatures on such Private Notes or bond powers must
       be guaranteed by an Eligible Institution (unless signed by an Eligible
       Institution). See Instruction 1.

    (e) If this Letter of Transmittal or Private Notes or bond powers are signed
       by trustees, executors, administrators, guardians, attorneys-in-fact,
       officers of corporations or others acting in a fiduciary or
       representative capacity, such persons should so indicate when signing,
       and unless waived by the Company, evidence satisfactory to the Company of
       their authority to so act must be submitted with this Letter of
       Transmittal.

    (f) If this Letter of Transmittal is signed by a person other than the
       Holder listed, the Private Notes must be endorsed or accompanied by a
       properly completed bond power, in either case signed by such Holder
       exactly as the name(s) of the Holder appear(s) on the certificates.
       Signatures on such Private Notes or bond powers must be guaranteed by an
       Eligible Institution (unless signed by an Eligible Institution).

    7.  TRANSFER TAXES. Except as set forth in this Instruction 7, the Company
will pay all transfer taxes, if any, applicable to the exchange of Private Notes
pursuant to the Exchange Offer. If, however, a transfer tax is imposed for any
reason other than the exchange of Private Notes pursuant to the Exchange Offer,
then the amount of such transfer taxes (whether imposed on the Holder or any
other persons) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemptions therefrom is not submitted with this
Letter of Transmittal, the amount of such transfer taxes will be billed directly
to such tendering holder.

    8.  SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If the Exchange Notes are to
be issued, or if any Private Notes not tendered for exchange are to be issued or
sent to someone other than the Holder or to an address other than that shown
above, the appropriate boxes on this Letter of Transmittal should be completed.
Holders of Private Notes tendering Private Notes by book-entry transfer may
request that Private Notes not accepted be credited to such account maintained
at DTC as such Holder may designate.

    9.  IRREGULARITIES. All questions as to the validity, form, eligibility
(including time of receipt), compliance with conditions, acceptance and
withdrawal of tendered Private Notes will be determined by the Company in its
sole discretion, which determination shall be final and binding. The Company
reserves the absolute right to reject any and all Private Notes not properly
tendered or any Private Notes the Company's acceptance of which would, in the
opinion of counsel for the Company, be unlawful. The Company also reserves the
right to waive any defects, irregularities or conditions of tender as to
particular Private Notes. The Company's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in this Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Private Notes must be
cured within such time as the Company shall determine. Although the Company
intends to notify Holders of defects or irregularities with respect to tenders
of Private Notes, neither the Company, the Exchange Agent nor any other person
shall incur any liability for failure to give such notification. Tenders of
Private Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Private Notes received by the
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering holders, unless otherwise provided in this Letter of
Transmittal, as soon as practicable following the Expiration Date.

                                       11

    10.  WAIVER OF CONDITIONS. The Company reserves the absolute right to waive,
amend or modify certain of the specified conditions as described under "The
Exchange Offer--Conditions to the Exchange Offer" in the Prospectus in the case
of any Private Notes tendered (except as otherwise provided in the Prospectus).

    11.  MUTILATED, LOST, STOLEN OR DESTROYED PRIVATE NOTES. Any tendering
Holder whose Private Notes have been mutilated, lost, stolen or destroyed,
should contact the Exchange Agent at the address indicated herein for further
instructions.

    12.  REQUESTS FOR INFORMATION OR ADDITIONAL COPIES. Requests for
information, questions related to the procedures for tendering or for additional
copies of the Prospectus and this Letter of Transmittal may be directed to the
Exchange Agent at the address or telephone number set forth on the cover of this
Letter of Transmittal.

    IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF) TOGETHER WITH
CERTIFICATES, OR CONFIRMATION OF BOOK-ENTRY OR THE NOTICE OF GUARANTEED
DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE
AGENT PRIOR THE EXPIRATION DATE.

                                       12

                             IMPORTANT INFORMATION

    Under current federal income tax law, a Holder whose tendered Private Notes
are accepted for exchange may be subject to backup withholding unless the Holder
provides the Company (as payor), through the Exchange Agent, with either
(i) such Holder's correct taxpayer identification number ("TIN") on Substitute
Form W-9 attached hereto, certifying that the TIN provided on Substitute
Form W-9 is correct (or that such Holder is awaiting a TIN) and that (A) the
Holder has not been notified by the Internal Revenue Service that he or she is
subject to backup withholding as a result of a failure to report all interest or
dividends or (B) the Internal Revenue Service has notified the Holder that he or
she is no longer subject to backup withholding; or (ii) an adequate basis for
exemption from backup withholding. If such Holder is an individual, the TIN is
such Holder's social security number. If the Exchange Agent is not provided with
the correct taxpayer identification number, the Holder may be subject to certain
penalties imposed by the Internal Revenue Service.

    Certain Holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. Exempt Holders should indicate their exempt status on Substitute
Form W-9. A foreign individual may qualify as an exempt recipient by submitting
to the Exchange Agent a properly completed Internal Revenue Service Form W-8
(which the Exchange Agent will provide upon request) signed under penalty of
perjury, attesting to the Holder's exempt status. See the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 (the
"Guidelines") for additional instructions.

    If backup withholding applies, the Company is required to withhold 31% of
any payment made to the Holder or other payee. Backup withholding is not an
additional federal income tax. Rather, the federal income tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the Internal Revenue Service.

    The Holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the record owner of the
Private Notes. If the Private Notes are held in more than one name or are not
held in the name of the actual owner, consult the enclosed Guidelines for
additional guidance regarding which number to report.

                                       13

                  PAYOR'S NAME: U.S. BANK NATIONAL ASSOCIATION

                                                                       
- ------------------------------------------------------------------------------------------------------------
          SUBSTITUTE               PART 1--PLEASE PROVIDE YOUR TIN IN            Social Security Number
           FORM W-9                THE BOX AT RIGHT AND CERTIFY BY                         OR
  DEPARTMENT OF THE TREASURY       SIGNING AND DATING BELOW                      ----------------------
   INTERNAL REVENUE SERVICE                                                  Employer Identification Number
                                   -------------------------------------------------------------------------
                                   PART 2--Certification Under                          PART 3--
                                   Penalties of Perjury, I certify                  Awaiting TIN  / /
      PAYER'S REQUEST FOR          that:
    TAXPAYER IDENTIFICATION        (1) The number shown on this form is
       NUMBER (TIN) AND            my current taxpayer identification
         CERTIFICATION                 number (or I am waiting for a
                                       number to be issued to me) and
                                      (2) I am not subject to backup
                                       withholding either because I
                                          have not been notified by the
                                          Internal Revenue Service (the
                                          "IRS") that I am subject to
                                          backup withholding as a
                                          result of failure to report
                                          all interest or dividends, or
                                          the IRS has notified me that
                                          I am no longer subject to
                                          backup withholding.
                                   -------------------------------------------------------------------------
                                    Certification instructions--You must cross out item (2) in Part 2 above
                                    if you have been notified by the IRS that you are subject to backup
                                    withholding because of underreporting interest or dividends on your tax
                                    return. However, if after being notified by the IRS that you are subject
                                    to backup withholding you receive another notification from the IRS
                                    stating that you are no longer subject to backup withholding, do not
                                    cross out item (2).

                                    Signature  Date

                                    Name

                                    Address

                                    City  State  Zip Code
- ------------------------------------------------------------------------------------------------------------



                 YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
                 CHECK THE BOX IN PART 3 OF SUBSTITUTE FORM W-9

                                            
- --------------------------------------------
                        PAYOR'S NAME: U.S. BANK NATIONAL ASSOCIATION

                   CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

    I certify under penalties of perjury that a taxpayer identification number has not been
issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer
identification number to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver an application in the near future.
I understand that if I do not provide a taxpayer identification number within sixty (60)
days, 31% of all reportable payments made to me thereafter will be withheld until I provide
such a number.

                  Signature                                        Date
- ---------------------------------------------



NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
      OF 31% OF ANY PAYMENT MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
      REVIEW THE ENCLOSED GUIDELINES FOR

                                       14

      CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR
      ADDITIONAL DETAILS.

                                       15

EX-99.2

                         NOTICE OF GUARANTEED DELIVERY
                           WITH RESPECT TO TENDER OF
          ANY AND ALL OUTSTANDING 8 7/8% SENIOR SECURED NOTES DUE 2009
                                IN EXCHANGE FOR
                      8 7/8% SENIOR SECURED NOTES DUE 2009
                                       OF
                      OWENS-BROCKWAY GLASS CONTAINER INC.

                PURSUANT TO THE PROSPECTUS DATED APRIL   , 2002
- --------------------------------------------------------------------------------
    THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON       ,
2002, UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED FROM
   TIME TO TIME, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME
   PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------

                             THE EXCHANGE AGENT IS:
                         U.S. BANK NATIONAL ASSOCIATION

                                            
      BY REGISTERED OR CERTIFIED MAIL:                       BY HAND DELIVERY:
       U.S. Bank National Association                 U.S. Bank National Association
            180 East Fifth Street                          180 East Fifth Street
          St. Paul, Minnesota 55101                      St. Paul, Minnesota 55101
  Attention: Corporate Trust Administration      Attention: Corporate Trust Administration
          Telephone: (651) 244-8677                      Telephone: (651) 244-8677
          Facsimile: (651) 244-0711                      Facsimile: (651) 244-0711

           BY OVERNIGHT DELIVERY:                              BY FACSIMILE:
       U.S. Bank National Association                         (651) 244-0711
            180 East Fifth Street                  Attn: Corporate Trust Administration
          St. Paul, Minnesota 55101                        CONFIRM BY TELEPHONE:
  Attention: Corporate Trust Administration                   (651) 244-8677
          Telephone: (651) 244-8677
          Facsimile: (651) 244-0711



    DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION TO A FACSIMILE NUMBER OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

    As set forth in the prospectus (the "Prospectus") dated April   , 2002 of
Owens-Brockway Glass Container Inc. (the "Company") and in the accompanying
Letter of Transmittal and instructions thereto (the "Letter of Transmittal"),
this form or one substantially equivalent thereto must be used to accept the
Company's offer (the "Exchange Offer") to exchange new 8 7/8% Senior Secured
Notes due 2009 (the "Exchange Notes") that have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), for all of its
outstanding 8 7/8% Senior Secured Notes due 2009 (the "Private Notes") if the
Letter of Transmittal or any other documents required thereby cannot be
delivered to the Exchange Agent, or Private Notes cannot be delivered or if the
procedures for book-entry transfer cannot be completed prior to the Expiration
Date. This form may be delivered by an Eligible Institution (as defined in the
Prospectus) by mail or hand delivery or transmitted via facsimile to the
Exchange Agent as set forth above. Capitalized terms used but not defined herein
shall have the meaning given to them in the Prospectus.

    This form is not to be used to guarantee signatures. If a signature on the
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the Letter of Transmittal.

              PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

    The undersigned hereby tenders to the Company upon the terms and subject to
the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Private Notes specified below pursuant to the guaranteed delivery procedures set
forth in the section of the Prospectus entitled "The Exchange Offer--Guaranteed
Delivery Procedures." By so tendering, the undersigned does hereby make, at and
as of the date hereof, the representations and warranties of a tendering Holder
of Private Notes set forth in the Letter of Transmittal.

    The undersigned understands that tenders of Private Notes may be withdrawn
if the Exchange Agent receives at one of its addresses specified on the cover of
this Notice of Guaranteed Delivery, prior to the Expiration Date, a facsimile
transmission or letter which specifies the name of the person who deposited the
Private Notes to be withdrawn and the aggregate principal amount of Private
Notes delivered for exchange, including the certificate number(s) (if any) of
the Private Notes, and which is signed in the same manner as the original
signature on the Letter of Transmittal by which the Private Notes were tendered,
including any signature guarantees, all in accordance with the procedures set
forth in the Prospectus.

    All authority herein conferred or agreed to be conferred shall survive the
death, incapacity, or dissolution of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.

                                       2

    The undersigned hereby tenders the Private Notes listed below:

                            PLEASE SIGN AND COMPLETE

                                            
- --------------------------------------------------------------------------------------------
    CERTIFICATE NUMBERS OF PRIVATE NOTES
               (IF AVAILABLE)                   PRINCIPAL AMOUNT OF PRIVATE NOTES TENDERED
- --------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------

- --------------------------------------------------------------------------------------------



- --------------------------------------------------------------------------------

   ___________________________________________________________________________
          SIGNATURE(S) OF REGISTERED HOLDER(S) OR AUTHORIZED SIGNATORY

  Name(s) ____________________________________________________________________
                             (PLEASE TYPE OR PRINT)

  Title ______________________________________________________________________

  Address ____________________________________________________________________

  Area Code and Telephone No. ________________________________________________

  Date _______________________________________________________________________

  If Private Notes will be tendered by book-entry transfer, check the trust
  company below:

  / / The Depository Trust Company

  Depository Account No.: ____________________________________________________
  ----------------------------------------------------------------------------

                                       3

- --------------------------------------------------------------------------------

                                   GUARANTEE

                      (NOT TO BE USED FOR SIGNATURE GUARANTEE)

      The undersigned, a participant in a recognized Signature Guarantee
  Medallion Program, guarantees deposit with the Exchange Agent of the Letter
  of Transmittal (or facsimile thereof), together with the Private Notes
  tendered hereby in proper form for transfer, or confirmation of the
  book-entry transfer of such Private Notes into the Exchange Agent's account
  at The Depository Trust Company, pursuant to the procedure for book-entry
  transfer set forth in the Prospectus, and any other required documents, all
  by 5:00 p.m., New York City time, on the third New York Stock Exchange
  trading day following the Expiration Date (as defined in the Prospectus).

                                   SIGN HERE

  Name of Firm: ______________________________________________________________

  Authorized Signature: ______________________________________________________

  Name (please type or print): _______________________________________________

  Address: ___________________________________________________________________

   ___________________________________________________________________________

   ___________________________________________________________________________

  Area Code and Telephone No.: _______________________________________________

  Date: ______________________________________________________________________

  ----------------------------------------------------------------------------

DO NOT SEND CERTIFICATES FOR PRIVATE NOTES WITH THIS FORM. ACTUAL SURRENDER OF
CERTIFICATES FOR PRIVATE NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY,
A COPY OF THE PREVIOUSLY EXECUTED LETTER OF TRANSMITTAL.

                                       4

                                  INSTRUCTIONS

    1.  DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY.  A properly completed
and duly executed copy of this Notice of Guaranteed Delivery and any other
documents required by this Notice of Guaranteed Delivery must be received by the
Exchange Agent at one of its addresses set forth on the cover hereof prior to
the Expiration Date. The method of delivery of this Notice of Guaranteed
Delivery and all other required documents to the Exchange Agent is at the
election and risk of the Holder but, except as otherwise provided below, the
delivery will be deemed made only when actually received by the Exchange Agent.
Instead of delivery by mail, it is recommended that Holders use an overnight or
hand delivery service, properly insured. If such delivery is by mail, it is
recommended that the Holder use properly insured, registered mail with return
receipt requested. For a full description of the guaranteed delivery procedures,
see the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery
Procedures." In all cases, sufficient time should be allowed to assure timely
delivery. No Notice of Guaranteed Delivery should be sent to the Company.

    2.  SIGNATURE ON THIS NOTICE OF GUARANTEED DELIVERY; GUARANTEE OF
SIGNATURES.  If this Notice of Guaranteed Delivery is signed by the Holder(s)
referred to herein, then the signature must correspond with the name(s) as
written on the face of the Private Notes without alteration, enlargement or any
change whatsoever. If this Notice of Guaranteed Delivery is signed by a person
other than the Holder(s) listed, this Notice of Guaranteed Delivery must be
accompanied by a properly completed bond power signed as the name of the
Holder(s) appear(s) on the face of the Private Notes without alteration,
enlargement or any change whatsoever. If this Notice of Guaranteed Delivery is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and, unless waived by the
Company, evidence satisfactory to the Company of their authority so to act must
be submitted with this Notice of Guaranteed Delivery.

    3.  REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.  Questions relating to the
Exchange Offer or the procedure for consenting and tendering as well as requests
for assistance or for additional copies of the Prospectus, the Letter of
Transmittal and this Notice of Guaranteed Delivery, may be directed to the
Exchange Agent at the address set forth on the cover hereof or to your broker,
dealer, commercial bank or trust company.

                                       5

EX-99.3

           LETTER TO DTC PARTICIPANTS REGARDING THE OFFER TO EXCHANGE
          ANY AND ALL OUTSTANDING 8 7/8% SENIOR SECURED NOTES DUE 2009
                                      FOR
                      8 7/8% SENIOR SECURED NOTES DUE 2009
                                       OF
                      OWENS-BROCKWAY GLASS CONTAINER INC.

                PURSUANT TO THE PROSPECTUS DATED APRIL   , 2002

- ----------------------------------------------------------------------
    THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON       ,
   2002, UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED FROM
   TIME TO TIME, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME
   PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------

                                                                  April   , 2002

To Securities Dealers, Commercial Banks
  Trust Companies and Other Nominees:

    Enclosed for your consideration is a Prospectus dated April   , 2002 (the
"Prospectus") and a Letter of Transmittal (the "Letter of Transmittal") that
together constitute the offer (the "Exchange Offer") by Owens-Brockway Glass
Container Inc., a Delaware corporation (the "Company"), to exchange up to
$1,000,000,000 in principal amount of its 8 7/8% Senior Secured Notes due 2009
(the "Exchange Notes"), which have been registered under the Securities Act of
1933, as amended (the "Securities Act"), for any and all outstanding 87/8]%
Senior Secured Notes due 2009, issued and sold in a transaction exempt from
registration under the Securities Act (the "Private Notes"), upon the terms and
conditions set forth in the Prospectus. The Prospectus and Letter of Transmittal
more fully describe the Exchange Offer. Capitalized terms used but not defined
herein have the meanings given to them in the Prospectus.

    We are asking you to contact your clients for whom you hold Private Notes
registered in your name or in the name of your nominee. In addition, we ask you
to contact your clients who, to your knowledge, hold Private Notes registered in
their own name.

    Enclosed are copies of the following documents:

    1.  The Prospectus;

    2.  The Letter of Transmittal for your use in connection with the tender of
       Private Notes and for the information of your clients;

    3.  The Notice of Guaranteed Delivery to be used to accept the Exchange
       Offer if the Private Notes and all other required documents cannot be
       delivered to the Exchange Agent prior to the Expiration Date;

    4.  A form of letter that may be sent to your clients for whose accounts you
       hold Private Notes registered in your name or the name of your nominee,
       with space provided for obtaining the clients' instructions with regard
       to the Exchange Offer; and

    5.  Guidelines for Certification of Taxpayer Identification Number on
       Substitute Form W-9.

    DTC participants will be able to execute tenders through the DTC Automated
Tender Offer Program.

    PLEASE NOTE THAT THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON             , 2002, UNLESS EXTENDED BY THE COMPANY. WE URGE YOU TO
CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.

    You will be reimbursed by the Company for customary mailing and handling
expenses incurred by you in forwarding any of the enclosed materials to your
clients.

    Additional copies of the enclosed material may be obtained from the Exchange
Agent, at the address and telephone numbers set forth below.

                                                   VERY TRULY YOURS,

                                             U.S. BANK NATIONAL ASSOCIATION
                                                 180 EAST FIFTH STREET
                                               ST. PAUL, MINNESOTA 55101
                                               ATTENTION: CORPORATE TRUST
                                                     ADMINISTRATION
                                                     (651) 244-8677

    NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM WITH RESPECT TO
THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS AND
THE LETTER OF TRANSMITTAL.

                                       2

EX-99.4

          LETTER TO BENEFICIAL HOLDERS REGARDING THE OFFER TO EXCHANGE

          ANY AND ALL OUTSTANDING 8 7/8% SENIOR SECURED NOTES DUE 2009
                                      FOR
                      8 7/8% SENIOR SECURED NOTES DUE 2009
                                       OF
                      OWENS-BROCKWAY GLASS CONTAINER INC.

                PURSUANT TO THE PROSPECTUS DATED APRIL   , 2002
- ----------------------------------------------------------------------
    THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON       ,
   2002, UNLESS EXTENDED (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED FROM
   TIME TO TIME, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME
   PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------

                                                                  April   , 2002

To Our Clients:

    Enclosed for your consideration is a Prospectus dated April   , 2002 (the
"Prospectus") and a Letter of Transmittal (the "Letter of Transmittal") that
together constitute the offer (the "Exchange Offer") by Owens-Brockway Glass
Container Inc., a Delaware corporation (the "Company"), to exchange up to
$1,000,000,000 in principal amount of its 8 7/8% Senior Secured Notes due 2009
(the "Exchange Notes"), which have been registered under the Securities Act of
1933, as amended (the "Securities Act"), for any and all outstanding 87/8]%
Senior Secured Notes due 2009, issued and sold in a transaction exempt from
registration under the Securities Act (the "Private Notes"), upon the terms and
conditions set forth in the Prospectus. The Prospectus and Letter of Transmittal
more fully describe the Exchange Offer. Capitalized terms used but not defined
herein have the meanings given to them in the Prospectus.

    These materials are being forwarded to you as the beneficial owner of
Private Notes carried by us for your account or benefit but not registered in
your name. A tender of any Private Notes may be made only by us as the
registered holder and pursuant to your instructions. Therefore, the Company
urges beneficial owners of Private Notes registered in the name of a broker,
dealer, commercial bank, trust company or other nominee to contact such
registered holder promptly if they wish to tender Private Notes in the Exchange
Offer.

    Accordingly, we request instructions as to whether you wish us to tender any
or all of your Private Notes, pursuant to the terms and conditions set forth in
the Prospectus and Letter of Transmittal. We urge you to read carefully the
Prospectus and Letter of Transmittal before instructing us to tender your
Private Notes.

    Your instructions to us should be forwarded as promptly as possible in order
to permit us to tender Private Notes on your behalf in accordance with the
provisions of the Exchange Offer. THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON             , 2002. Private Notes tendered pursuant to
the Exchange Offer may be withdrawn, subject to the procedures described in the
Prospectus, at any time prior to the Expiration Date.

    If you wish to have us tender any or all of your Private Notes held by us
for your account or benefit, please so instruct us by completing, executing and
returning to us the instruction form that appears below. The accompanying Letter
of Transmittal is furnished to you for informational purposes only and may not
be used by you to tender Private Notes held by us and registered in our name for
your account or benefit.

                        INSTRUCTION TO REGISTERED HOLDER
                             FROM BENEFICIAL OWNER
                    OF 8 7/8% SENIOR SECURED NOTES DUE 2009
                     OF OWENS-BROCKWAY GLASS CONTAINER INC.

    The undersigned acknowledge(s) receipt of your letter and the enclosed
materials referred to therein relating to the Exchange Offer of the Company.
Capitalized terms used but not defined herein have the meanings ascribed to them
in the Prospectus.

    This will instruct you to tender the principal amount of Private Notes
indicated below held by you for the account or benefit of the undersigned,
pursuant to the terms of and conditions set forth in the Prospectus and the
Letter of Transmittal.

    The aggregate face amount of the Private Notes held by you for the account
of the undersigned is (FILL IN AMOUNT):

    $            of the Private Notes.

    With respect to the Exchange Offer, the undersigned hereby instructs you
(check appropriate box):

    / / To TENDER the following Private Notes held by you for the account of the
undersigned (INSERT PRINCIPAL AMOUNT OF PRIVATE NOTES TO BE TENDERED, IF ANY):

    $            of the Private Notes.

    / / NOT to TENDER any Private Notes held by you for the account of the
undersigned.

    If the undersigned instructs you to tender the Private Notes held by you for
the account of the undersigned, it is understood that you are authorized (a) to
make, on behalf of the undersigned (and the undersigned, by its signature below,
hereby makes to you), the representations and warranties contained in the Letter
of Transmittal that are to be made with respect to the undersigned as a
beneficial owner of the Private Notes, including but not limited to the
representations that (i) the undersigned's principal residence is in the state
of (FILL IN STATE)             , (ii) the undersigned is acquiring the Exchange
Notes in the ordinary course of business of the undersigned, (iii) the
undersigned has no arrangement or understanding with any person to participate
in the distribution of Exchange Notes, (iv) the undersigned acknowledges that
any person who is a broker-dealer registered under the Exchange Act or is
participating in the Exchange Offer for the purpose of distributing the Exchange
Notes must comply with the registration and prospectus delivery requirements of
Section 10 of the Securities Act in connection with a secondary resale
transaction of the Exchange Notes acquired by such person and cannot rely on the
position of the Staff of the Securities and Exchange Commission set forth in
certain no action letters (See the section of the Prospectus entitled "The
Exchange Offer--Resale of the Exchange Notes"), (v) the undersigned understands
that a secondary resale transaction described in clause (iv) above and any
resales of Exchange Notes obtained by the undersigned in exchange for the
Private Notes acquired by the undersigned directly from the Company should be
covered by an effective registration statement containing the selling
securityholder information required by Item 507 or Item 508, if applicable, of
Regulation S-K of the Commission, (vi) the undersigned is not an "affiliate," as
defined in Rule 405 under the Securities Act, of the Company, and (vii) if the
undersigned is a broker-dealer that will receive Exchange Notes for its own
account in exchange for Private Notes that were acquired as a result of
market-making activities or other trading activities, it acknowledges that it
will deliver a prospectus meeting the requirements of Section 10 of the
Securities Act in connection with any resale of such Exchange Notes; however, by
so acknowledging and by delivering such prospectus, the undersigned will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act; (b) to agree, on behalf of the undersigned, as set forth in the Letter of
Transmittal; and (c) to take such other action as necessary under the Prospectus
or the Letter of Transmittal to effect the valid tender of Private Notes.

                                       2

    The purchaser status of the undersigned is (check the box that applies):

    / /  A "Qualified Institutional Buyer" (as defined in Rule 144A under the
       Securities Act)

    / /  An "Institutional Accredited Investor" (as defined in Rule 501(a)(1),
       (2), (3) or (7) under the Securities Act)

    / /  A non "U.S. person" (as defined in Regulation S under the Securities
       Act) that purchased the Private Notes outside the United States in
       accordance with Rule 904 under the Securities Act

    / /  Other (describe)
       -------------------------------------------------------------------------

                                   SIGN HERE

  Name of Beneficial Owner(s): _______________________________________________

  Signature(s): ______________________________________________________________

  Name(s) (PLEASE PRINT): ____________________________________________________

  Address: ___________________________________________________________________

  Principal place of business (if different from address listed above): ______

  Telephone Number(s): _______________________________________________________

  Taxpayer Identification or Social Security Number(s): ______________________

  Date: ______________________________________________________________________
  ----------------------------------------------------------------------------

                                       3

EX-99.5

            GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
                         NUMBER ON SUBSTITUTE FORM W-9

GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER--Social Security Numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer Identification Numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.



- --------------------------------------------------------  --------------------------------------------------------
                                GIVE THE SOCIAL                                           GIVE THE EMPLOYER
                                SECURITY NUMBER           FOR THIS TYPE OF ACCOUNT:       IDENTIFICATION
FOR THIS TYPE OF ACCOUNT:       OF --                                                     NUMBER OF --
- --------------------------------------------------------  --------------------------------------------------------
                                                                           
1.    An individual's account   The individual            8.    Sole proprietorship       The owner(4)
                                                                account

2.    Two or more individuals   The actual owner of the   9.    A valid trust, estate or  The legal entity (Do not
      (joint account)           account or, if combined         pension trust             furnish the identifying
                                funds, any one of the                                     number of the personal
                                individuals(1)                                            representative or
                                                                                          trustee unless the legal
                                                                                          entity itself is not
                                                                                          designated in the
                                                                                          account title)(5)

3.    Husband and wife (joint   The actual owner of the   10.   Corporate account         The corporation
      account)                  account or, if joint
                                funds, either person(1)

4.    Custodian account of a    The minor(2)              11.   Religious, charitable,    The organization
      minor (Uniform Gift to                                    or educational
      Minors Act)                                               organization account

5.    Adult and minor (joint    The adult or, if the      12.   Partnership account held  The partnership
      account)                  minor is the only               in the name of the
                                contributor, the                business
                                minor(1)

6.    Account in the name of    The ward, minor, or       13.   Association, club, or     The organization
      guardian or committee     incompetent person(3)           other tax-exempt
      for a designated ward,                                    organization
      minor, or incompetent
      person

7.    a. The usual revocable    The grantor-trustee(1)    14.   A broker or registered    The broker or nominee
      saving trust account                                      nominee
      (grantor is also
      trustee)

      b. So-called trust        The actual owner(1)       15.   Account with the          The public entity
      account that is not a                                     Department of
      legal or valid trust                                      Agriculture in the name
      under State law                                           of a public entity (such
                                                                as a State or local
                                                                government, school
                                                                district, or prison)
                                                                that receives
                                                                agricultural program
                                                                payments


- ------------------------------

(1) List first and circle the name of the person whose number you furnish.

(2) Circle the minor's name and furnish the minor's social security number.

(3) Circle the ward's, minor's or incompetent person's name and furnish such
    person's social security number.

(4) You must show your individual name, but you may also enter your business or
    "doing business" name. You may use either your Social Security Number or
    Employer Identification Number.

(5) List first and circle the name of the legal trust, estate, or pension trust.

NOTE: If no name is circled when there is more than one name, the number will be
    considered to be that of the first name listed.

            GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
                         NUMBER ON SUBSTITUTE FORM W-9
                                     PAGE 2

OBTAINING A NUMBER

    If you do not have a taxpayer identification number or if you do not know
your number, obtain Form SS-5, Application for Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service (the
"IRS") and apply for a number.

Payees specifically exempted from backup withholding on ALL payments by brokers
include the following:

    - A corporation.

    - A financial institution.

    - An organization exempt from a tax under Section 501(a), or an individual
      retirement plan or a custodial account under Section 403(b)(7) if the
      account satisfies the requirements of Section 401(F)(2).

    - The United States or any agency or instrumentality thereof.

    - A State, the District of Columbia, a possession of the United States, or
      any subdivision or instrumentality thereof.

    - A foreign government, a political subdivision of a foreign government, or
      any agency or instrumentality thereof.

    - An international organization or any agency or instrumentality thereof.

    - A registered dealer in securities or commodities registered in the U.S. or
      a possession of the U.S.

    - A real estate investment trust.

    - A common trust fund operated by a bank under Section 584(a).

    - An entity registered at all times under the Investment Company Act of
      1940.

    - A foreign central bank of issue.

    - A futures commission merchant registered with the Commodity Futures
      Trading Commission.

    - A person registered under the Investment Advisors Act of 1940 who
      regularly acts as a broker.

Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:

    - Payments to nonresident aliens subject to withholding under Section 1441.

    - Payments to partnerships not engaged in a trade or business in the U.S.
      and which have at least one nonresident partner.

    - Payments of patronage dividends where the amount received is not paid in
      money.

    - Payments made by certain foreign organizations.

    - Payments made to a nominee.

Payments of interest not generally subject to backup withholding include the
following:

    - Payments of interest on obligations issued by individuals. Note: You may
      be subject to backup withholding if this interest is $600 or more and is
      paid in the course of the payer's trade or business and you have not
      provided your correct taxpayer identification number to the payer.

    - Payments of tax-exempt interest (including exempt-interest dividends under
      Section 852).

    - Payments described in Section 6049(b)(5) to nonresident aliens.

    - Payments on tax-free covenant bonds under Section 1451.

    - Payments made by certain foreign corporations.

    - Payments made to a nominee.

Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, CHECK "EXEMPT" IN PART II OF THE FORM, SIGN AND DATE THE
FORM AND RETURN IT TO THE PAYER.

Certain payments other than interest, dividends, and patronage dividends, which
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under Section 6041, 6041(A)(a),
6045, and 6050A.

PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.

PENALTIES

(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.

(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.

(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.

(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE
INTERNAL REVENUE SERVICE.

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